It is useful to revisit the early foundation on which Product Management is built to understand why so many organizations are embracing Product Management today – and how it can be beneficial to your organization. In the Gartner webinar, The Top Trends for Product Management in 2021, Sr. Director Analyst Clifton Gilley revisited the concept of the “Whole Product,” noting that while it has been around for nearly 40 years, it is still a challenge for many. The root of the concept, however, is even older and can be found more than 60 years ago in German American Economist and Professor at the Harvard Business School, Theodore Levitt’s 1960 Harvard Business Review article Marketing Myopia.
Defining the Customer’s Problem
Levitt used the railroads, which suffered a rapid decline in North America after World War II, as a prime example of how businesses need to reorient themselves toward a customer focus. According to Levitt: “The railroads didn’t stop growing because the need for passengers and freight declined. That grew. The railroads are in trouble today not because that need was filled by others (cars, trucks, airplanes and even telephones) but because it was not filled by the railroads themselves.”
Railroads failed to identify their customers’ Problem Space and to understand how they provided value. Rather than seeing themselves as being in the transportation business and focusing on how to better serve peoples’ transportation needs, they focused on providing railroad services as cheaply and efficiently as possible.
By contrast, Levitt pointed to the E.I. du Pont de Nemours and Company (nylon) and Corning Glass Works (glass) as two examples of technically-driven, customer-oriented companies who were successfully able to create numerous products and solutions to meet the need of customers in the emerging post-war consumer culture.
Levitt wrote about the two companies: “It is constant watchfulness for opportunities to apply their technical know-how to the creation of customer-satisfying uses that account for their prodigious output of successful new products. Without a very sophisticated eye on the customer, most of their new products might have been wrong, their sales methods useless.”
In today’s environment where many costly product launches fail, keeping a “sophisticated eye on the customer” is at the heart of Product Management and is a key step in ensuring your new Products successfully meet your customer needs.
The Danger of Technology-Driven Products
In addition, an observation Levitt made over 60 years ago applies directly to today’s technology driven business environment: “The irony of some industries oriented toward technical research and development is that the scientists who occupy the high executive positions are totally unscientific when it comes to defining their companies’ overall needs and purposes. They violate the first two rules of scientific method: being aware of and defining their companies’ problems and then developing testable hypotheses about solving them.”
Too often products are made because of producer’s ability to make them. Advanced features are added because, “why not?” Who wouldn’t want more? More features, more capabilities, more everything? But when more isn’t tethered to the customers’ problem and doesn’t make their lives easier, the Product misses the mark.
Product Management Today
Those familiar with current Product Management practices will recognize foundational elements of it in the Levitt quotes above. Customer orientation, defining customer problems and developing testable hypotheses around solving problems are all elements of Product Management frameworks including xScion’s Product Genome.
If the customer is left out of the loop and you focus on what you do, there is a good chance you’ll miss the mark by doing today’s equivalent of trying to better manage the railroad when customer needs lie elsewhere. You might release impressive, capable and elaborate technical solutions that fail to address problems and result in missed opportunities and wasted resources. To paraphrase Levitt’s key, revolutionary point, the solutions offered should be determined by the customer rather than the provider. Successful Products result from understanding the customer problem and learning from the customer continuously, which is the heart of Product Management.