How do you create a product vision? Part 4

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Creating the product vision using service dominant logic and an outcomes orientation

This post is the fourth part of describing how to create a product vision.

Getting to a product vision for an innovative product is a five step process:

Understanding what a good one looks like
Becoming an expert quickly in the knowledge domain of your product innovations
Using an influencer centered design process to collaborate with domain experts and customers on your product vision
Creating the product vision using service dominant logic and an outcomes orientation
Communicating the Product vision – to employees, to customers, to investors

Who is your customer’s customer? How is your product or service helping your customer better serve their customers?

These questions are among the most powerful facilitation questions I use to get product teams to build better products and innovative product visions.

These questions arose after facilitating hundreds of Technology and Organizational Performance (TOP) Mapping sessions while at Digital Equipment Corporation. While these sessions elicited useful representations of current and future state designs for organizations, I did not feel that we were getting the kinds of innovations that talented executives could create. We would get good information about the inside of the organization under study, but not very good information elsewhere in the map.

Out of frustration one day, I asked participants to include in their TOP Maps not just the relationship with their customers, but also with their customer’s customers.

Immediately we got better and more innovative actionable results. While we didn’t get much information about the customer’s customer, the extra level of abstraction helped participants do a better job of showing the relationships with their customers.

As part of the pre-merger meetings between Adobe and Aldus, we used TOP Mapping to depict the future possibilities for a merged entity.

The map helped the executive teams focus our discussions and actions on how we would create new customers that neither company was able to do alone.

Many years later I came across Mack Hanan’s description of growth partners:

“How can you grow your business?

“You cannot.

“You can only grow someone else’s business. His business growth will be the source of your growth. By growing, he will force growth back upon you because he will want you to grow him again.

“The businesses you can grow have a name. They are called your major customers. Their growth must be the objective of your business. The capabilities you require to grow them must be your asset base.

“Growth requires a partner. A growth partner is a special kind of customer. He is a customer whose costs you can significantly reduce or whose profitable sales volume you can significantly increase. In one or both of these ways, you can improve his profits. This is the basis for his growth. It is also the basis for his contribution to your own growth. As the two of you grow each other, you will become mutually indispensable.

“If you cannot grow a customer, you cannot partner him. You can continue to do business with him, buying and selling, but the maximized profits of growth will elude both of you. If all your cusotmers are buyers instead of growers, you will be a slow-growth or no-growth business. None of your customers will be growing you because you will not be growing them.”

It is a joy for me to see the “Ah Hah!” expression after a few moments of thought on the part of an entrepreneur. Until this moment of comprehension, I think most entrepreneurs believe they are in control of their own business. Hanan’s simple question “How can you grow your business?” with the counter-intuitive response “You cannot” is an eye opener for an entrepreneur.

More recently, Jim Spohrer of IBM during our participation in a Computing Research Association cybersocial learning systems visioning series of workshops introduced me to Service Science.

I had never heard of the discipline so I devoured everything that I could find. I was delighted to find a wealth of research and insights that helped resolve a fifty-year management dilemma of mine – how do you manage both professional services and product development at the same time? Over the years I’ve managed to do well with one or the other, but I’ve never been able to manage both simultaneously successfully. Jim’s research provided a wealth of answers and insights.

Value Co-Creation through Service Systems

Several key concepts from Service Science extended what I’d learned from Rob Bernshteyn’s Value as a Service with Value Co-Creation being an important synthesis.

“For conciseness, we think pay for performance is a reasonable definition of a service—in that this phrase captures the idea that what the provider does for the client is essential, as opposed to exchange of an artifact or a good being essential. However, combining Fitzsimmons and Fitzsimmons’s definition with Hill’s definition, a time-perishable, intangible experience performed for a client who is acting as a coproducer to transform a state of the client, reveals some other essential characteristics of services: namely, that the client plays a key role in coproduction activities (the client has responsibilities) and in the co-creation of value (transformed state of the client) (see also Sampson and Froehle 2006). To understand the notion of responsibility in a coproduction activity, consider a teacher telling a student to read a book and work a problem set (exercises) or a doctor instructing a patient to eat certain foods and exercise more. In both cases, the providers perform certain activities, but the clients must also perform activities that transform their own states or else the benefit or value of the service will not be fully attained. In business services, if the client does not install the new IT systems and train the necessary people in the reengineered process, the client will not receive the benefit of the service. Thus, the provider in many cases must negotiate to monitor and assess that the client is performing adequately on the client’s responsibilities, and, of course, the client needs to determine that the provider is likewise applying satisfactory effort and quality controls in the performance of the provider’s tasks. These issues become of paramount importance in outsourcing services, when a client may outsource a component of its business to a provider that is in a different country with different government regulations and national culture of the employees.”

The next key concept from Service Science was how work evolves and cycles between professional services and products. This diagram captures that sequence:

Work Evolution in Service Systems

The minute I saw this diagram was a head slapping moment. Throughout my professional life of creating software products, I stopped at the Augment stage. Then I went on to the next opportunity. I never realized that there was a larger process and that the process was a cycle. Creating a product vision is to take an important problem and go through the cycle, and then find the next important problem and repeat.

As part of trying to create Service Science, the authors articulate premises that would allow the development of a theory. While principles have not emerged yet, a series of premises have evolved over the last decade.

The key concept here is the customer must invest to gain benefit from the product that you offer. Your product vision must include all of the work that a customer has to do to make your generic product into a whole product that works for them.

The service science authors summarize their insights through a Value Cocreation narrative diagram:

At FTI Consulting with the eDiscovery Ringtail product, we invested a great deal in moving from a waterfall development model to an agile continuous delivery cloud based product. We invested in continuous integration, continuous testing, and continuous delivery devops infrastructure so that we could move from launching a product version once a year to launching every two weeks. Yet, we invested very little to ensure that the features we developed were so valuable that our customers would continuously ADOPT our expensive work as routinely as we delivered updates.

Fortunately, I came across the Outcomes orientation to driving product development. Joshua Seiden in Outcomes Over Outputs: Why Customer Behavior is the key metric for Business Success provides the rationale and examples for why outcomes have to drive a product vision and not features.

“So let’s start by defining the word in our context: an outcome is a change in human behavior that drives business results. Outcomes have nothing to do with making stuff—though they sometimes are created by making the right stuff. Instead, outcomes are the changes in customer, user, employee behavior that lead to good things for your company, your organization, or whomever is the focus of your work.”

Seiden, Joshua. Outcomes Over Output: Why customer behavior is the key metric for business success

If you are going to drive a business result, you must change human behavior. And not just for your customer. You also must change the behavior of your customer’s customer.

After trying many ways to get product managers and product development teams to switch from endless feature creation, I realized that to understand outcomes and behavior changes you first must understand how to do human centered design. You have to get good at observing users in the wild (where they actually do their work).

Fortunately, there are resources like Engaged: Designing for Behavior Change that ease the way into designing and building products that enable the behavior changes required to produce outcomes and business results.

As we learned with Hanan’s needing to create growth partners, it is not enough to look at creating outcomes for your customers, you must create systems of outcomes:

Recently, Brandon Fleming, CEO of Chimerocyte, suggested an image of the Tao to illustrate how a company’s vision needs to reside inside their customer and the customer’s requirements needs to be represented as in Service Dominant (SD) logic in the product development organization.

Now that we have looked at several aspects of creating a product vision, I recommend rewatching the Steve Jobs introduction of the iPhone in 2007. As you reflect on the evolution of the iPhone in the context of the vision Jobs laid out, identify all of the outcomes and behavior changes both of customers and of the application developers since the introduction of the iPhone and the iTunes App Store. Use the frameworks from these product vision posts to identify key aspects of the vision that were present in the 2007 presentation.

The five parts of this series on how to create a product vision are: