Product thinking: More than just 'product'

Transcript

[00:00:00] Kimberly Boyd: Welcome to a special Pragmatism in Practice podcast takeover, The Power of Product Thinking. In this series, we'll speak to leaders who have adopted a product-thinking approach in their organizations with the aim of creating exceptional products that stand out and create value for customers, teams, and their businesses. We'll share the ideas and strategies they've leveraged so that you can do the same. I'm Kimberly Boyd, and I'm here with David Zimmer, Chief Product and Strategy Officer at Dunnhumby. David, thank you so much for joining us today on Pragmatism in Practice. It's great to have you here.

[00:00:30] David Zimmer: My pleasure. I'm actually thrilled to be here. This is my first podcast, which, in this day and age, I feel like I'm a little bit behind at the moment, so I'm glad I'll be able to tick--

[00:00:41] Kimberly: We'll get you up to speed. [chuckles]

[00:00:43] David: I'm glad to be able to tick the box finally.

[00:00:46] Kimberly: Wonderful. Glad that you're choosing us as your first one to get under your belt. I promise it's a very painless process, but perhaps before we dive in and start talking about all things product, you can kick us off and, tell us a little bit about yourself, who Dunnhumby is, and what you focus on there as their Chief Product and Strategy Officer.

[00:01:07] David: Sure. I'll start with Dunnhumby, and then I'll go into myself. Dunnhumby is a customer data science platform business. We are actually the first customer data science platform back in the '90s. What we do is we work with retailers and CPGs, consumer packaged goods manufacturers. We work with them to take the data that retailers get from their loyalty cards and from their points of sale, and we apply our leading-edge data science to that to understand a retailer's performance, to help retailers and CPGs get the right things on the right shelf at the right time. We help retailers and CPGs optimize their pricing, their promotions.

Really, we are ingrained in retailer and CPG businesses really helping embed data science in their operational and strategic decision-making every day. It's a very exciting industry, retail being such a fast-moving thing. It's a very exciting company for me, given its long history, but also its cutting-edge data science capabilities. It's on the front of everybody's tongue these days.

From my perspective, I joined about five months ago, and prior to that, my career was sort of one of three parts. I spent about 10 years as a product leader, mostly in the travel and travel technology space. Before that, I spent about 10 years at KPMG in London as a consultant, both on the strategy, but also on the M&A side. Before that, I had the usual, in my twenties, the bunch of random different experiences that all created the learning experiences that I probably still draw on today, but based in London, but originally from Pittsburgh. You can tell the accent hasn't gone away.

[00:03:20] Kimberly: Right. Yet you haven't adopted a faux British accent in your time in the UK. [chuckles]

[00:03:27] David: No. Every once in a while, the random word comes out that the family back home raises their eyebrows at, but no, by the time I moved here, it was pretty much set in stone. I maybe have probably dropped the decibels a few.

[00:03:40] Kimberly: Yes. We're a little louder here in the US. I'm always conscious of that anytime I'm abroad. Obviously, product, central to your role and what you're doing at Dunnhumby. As you mentioned, giving a bit of your background, played a big role in a number of experiences you've had in the past. Curious if you've noticed any differences in your experience being a product leader between what we call more traditional legacy organizations and those that are more digital natives. Do any particular challenges or differences stand out to you between the two when it comes to product?

[00:04:24] David: Absolutely. It's tough to say one the traditional business or the digital native is doing things right, but there's certainly some differences that I've noticed. I think, yes, digital native business often sees technology as a central part to their business strategy, not just an enabler of strategy. They don't really separate business strategy from technology strategy. They look at technology investments different.

I found in digital native businesses, CTOs and technology investments are usually measured on business contribution rather than just cost. In traditional orgs, platform investments and sometimes non-customer-facing investments struggle to see the light of day due to the challenge in articulating the external benefits or perception of a poor ROI. The creation often for a traditional business of a truly digital architecture, it often proceeds fairly piecemeal or at a pace that means you're not really getting the impact.

Traditional businesses need to think a little bit differently about how they judge investments in digital capabilities, especially where they're not just seen as customer-facing. I think native businesses also have the luxury often of working with a more future-proof technology stack. It's already been built from scratch, it's on flexible, scalable cloud platforms with less concerns about legacy technology.

Traditional companies usually have these large legacy technology challenges to resolve at the same time as actually trying to improve the customer experience. It makes prioritization a lot more complex. Digital native organizations don't have the challenge of trying to transition that scale from legacy systems and ways of working. I think what I've found in a few of the more traditional orgs I've worked with in the past, they often turn to these big digital transformation projects and programs, and everything becomes a change program. These companies end up trying to do digital rather than being digital. I think that's something-- I like that turn of phrase, I think E&Y had coined it.

You get caught in these continuous cycles of big change. You do six months of planning, six months of doing, six months of rethinking things based on things that didn't work. Where I think traditional orgs need to think differently is how do you create actual measurable change in your product-thinking approach as part of the day job rather than see it as part of an incremental set of projects.

[00:07:30] Kimberly: To you, like what is being digital versus doing digital look like?

[00:07:35] David: Part of it goes back to that point about trying to define everything in terms of change programs, what you have to do, and this might sound a little fluffy. You need to make that continuous improvement in the customer experience, that continuous improvement in the capabilities of your technology part of the day job. It's something that leaders, teams, and individuals need to take on board as a business-as-usual thing.

I think when companies carve digital transformation or however we want to call it, when they carve that out into big programs, they explicitly say to everybody in the business, "We're going to do digital here, but we're not going to do digital here." Part of it is, you got to go have that fanatical executive level sponsorship that, what we are trying to do isn't just about the business. It's about what our customers need and want.

If you can take that first step in product thinking by looking at what the customer wants, what does your target customer actually need? How do they want to digest whatever product or service that you're providing? You turn it into that, and then you can orient the whole business towards doing what the customer needs, as opposed to saying, "Hey, we're going to do this internally for the sake of doing it internally."

I think the other thing you need to do is you need to set horizons as a business and being, again, clear at the exec level on down about, horizon one might be, we're going to put some foundations in place that are going to allow us, to transform digitally, that are going to allow us to become more product led. Then we know what good looks like at the end of that horizon. When we get to that, horizon two is then talking about really accelerating capability, and horizon three is around really innovating at scale through your product.

At each horizon, you're focusing on different skills, different outcomes. You need to help people understand, in each of those horizons, what you're aiming for, and then it's easier to chart the course. A lot of that doesn't sound very practical, "Do A, do B, do C." A lot of this is, particularly when you talk about product-led, when you talk about digital transformation, it's about behaviors. It's about changing behaviors.

[00:10:29] Kimberly: It's the hardest thing to change.

[00:10:31] David: Exactly. Until you can get that behavioral change, all you'll be doing is getting the same results, maybe just on slightly newer technology.

[00:10:42] Kimberly: I think the point around, behavioral change is probably one for-- anyone listening to this is nodding their head, has gone through an experience of trying to drive widespread change in behaviors at scale in an organization is definitely one of the most challenging parts.

Reflecting on your experience as a product leader, what have you found to be most effective in changing behavior? Is it probably some of the things you've maybe already mentioned, centering on the customer, painting the picture of what horizons lie ahead, but is there anything else that perhaps not the silver bullet, but can unlock some of the doors to try to drive to more of those product-led and true digital, being digital behaviors versus just the doing digital behaviors?

[00:11:40] David: A few things, and some of it probably pulls on some lessons learned. I'll probably hop back and forth between some practical things and probably some battle scars. I think when we talk about behavioral change, transformation is always about people. One of the things I have learned is we always talk about needing to bring people along in a change program.

One of the things I found actually, sometimes you just need to be directive because a lot of times, particularly when you're talking about product-led approaches, when talking about digital technology, speed of execution and speed of decision-making are some of the biggest determinations of success. The challenge there sometimes is waiting for the entire team of organization to be ready to move. Sometimes--

[00:12:39] Kimberly: You'll be waiting forever, right?

[00:12:41] David: Exactly. Sometimes as a product leader, or just a business leader because I always say the best product leaders are great business leaders, you just need to say, "Hey, we're going." Do the work to set that horizon view, but say, "Hey, we're going and people need to come along for the ride." You'll find some people can do that. You'll find some people that can't, and that's always the challenge in a business. That's sometimes tough decisions about people on your team or in the business as a whole.

Sometimes thinking about being directive is an important part of getting people taking the first step towards changing behaviors or getting the product that-- I think using exemplars. When I was at Travelport, I had a fabulous chief technology officer who's my opposite, my partner in crime. Between the two of us, we literally had to rebuild the product and technology organization.

One of the things that we did was, Big Bang is tough. It's really tough. We used particular exemplars in our group. We created teams, squads of product and technology people that we knew were going to be the ones capable of making some of the transitions to acting and working differently. Really, we didn't have to do too much at that point to celebrate success because other teams saw how they were working. They said, "Actually, we'd like to do that too."

[00:14:23] Kimberly: We want to work like they do. We want to work like they do.

[00:14:25] David: Exactly. That whole idea of exemplars I think is hugely important in behavioral change and making it almost sort of self-evident that this is the way we need to go.

[00:14:41] Kimberly: I want to come back to two things I heard you mention. One was the speed around decision-making and action. The other was also a time component to it about clearly setting those horizons and making them clear to people. Knowing that, moving to this way of thinking and working and being is a process, so it doesn't happen overnight. Yet, you do want to see iterative change happening faster than it perhaps has previously. How do you determine, what are the right time scales for those horizons that you're setting for the organization to bring people along on that change?

[00:15:21] David: The first thing you need to do in terms of setting horizons is, you have to start outside in. Part of it is understanding what your customers are ready for and understanding how what you're trying to do is going to impact them. The first lens I always say is outside in. Set your horizons by what you think you can achieve with your customers.

Not all of us are going to come up with the iPhone. Not all of us are going to come up with something that nobody actually knew they needed before it arrived, and then as a whole, "Oh, of course." 80% of the time, 90% of the time, it's going to be setting your horizons based on what your customers are willing to do. I think the challenge today is, in an environment of huge technology saturation, customers are bringing their expectations to your business of what kind of experience they will adopt and not adopt.

The second point around your horizons is knowing your environment because your competition is the experience expectations that customers and users are bringing to your company from dozens of other experiences. When you're thinking, I have a big external focus when I'm thinking about setting those horizons.

Internally, there is absolutely that change management 101 view, which is, what's the capacity of the business to change? What's the capability of the business to change? Both of which, this day and age, it's really hard to find the spare capacity in somebody's day to do things differently, to try different things. It's hard to find somebody, even people who have a lot of adaptability. It's hard to find that capability across the board in teams and organizations to make large-scale change successful. There's that initial triage where you have to say, "Based on our capability and capacity, this is what we can probably get at the first stage."

[00:17:54] Kimberly: This is how much the system can bear.

[00:17:56] David: Yes. I think that horizon one, where I talk about triage and foundations, that's really important because what you don't want to necessarily do, you want to set ambitious goals, but what you don't want to necessarily do is set the whole system up for failure at the start.

I think the other thing that's really helpful when you're setting the horizons, don't try and do a whole lot of blank slate work. I come from a consulting background, I come from a science background when I was at university, I'm a big advocate of what I call the hypothesis-based approach. Get to a good enough answer and get to that quickly, and then work towards that and change and adapt along the way. Don't worry too much about setting your horizons for change, for transformation.

Don't get so caught up in setting them so explicitly that you spend so much time agonizing over the plan and so much time agonizing over the right things to do that you lose the impetus. Just sort of say, "Hey, we think the answer is X, looks like that's close enough. We're going to work towards X, and we'll course correct on the way." Everybody in the product world knows test-and-learn. Test-and-learn applies at the enterprise level as well.

[00:19:32] Kimberly: That resonates to me. The one that always sticks in my head is like, build the right thing and build the thing right. Don't focus so much upfront on the perfection of just how it should be, understand what it is you want to build and why, and the rest will follow.

[00:19:49] David: Exactly. It's just like the whole idea of getting to coding early. Give customers something, even if it's small, give them something that they can try and respond to. It's the same thing in digital transformation or moving towards more product-first approaches. Give people in the business something that they can see and try and say, "Oh, okay, that's different than what we're doing today. You know what? I like it." It's that same thing internally. Get to the crux of the change quickly. The more people can start to experience something different sooner rather than later, the more you'll get feedback, and the more you'll understand, "Okay, maybe they're not quite capable of that yet, we'll scale back." Or maybe, "Hey, they're jumping in with both feet. We're going to actually accelerate."

[00:20:50] Kimberly: To the point of understanding how ready the organization is, how much it can bear for changing some of these ways of working, I think one thing that's important to highlight, and I'd love to hear what your experience has been with it, when we're talking about product thinking, product mindset, people automatically think, "Well, obviously, that applies to the people who are intimately involved in the day-to-day of building, developing, evolving the products," but it actually is for everyone in the organization, not just within the purview of the product team.

How have you seen that play out in the past and how have you, as a business leader, been able to push those product practices and principles beyond just the walls of the product organization?

[00:21:42] David: Yes. That's a really good question because it speaks to how some of the common misconceptions about what product growth is or what thinking product first is. I think one of those challenges is we sometimes confuse product and proposition. That's very easy to do, particularly in a SaaS-dominated worlds these days. Don't always assume that the product is your proposition.

The proposition, going back to some of your 101 kind of definitions, your proposition is the why. Why should a customer buy from you? It's a view of value and includes elements including service, price, distribution, et cetera. The product at the end of the day is the what and how. You've got to make sure that you've got a clear view of the proposition and everything that surrounds it. The product is sometimes only going to be a small part of it, even in a SaaS business.

I think it's also very easy to become focused on the product and build for the sake of it without stepping back and asking yourself if you're still delivering against the proposition. You might find that you need to tweak the proposition, but always lift your head up as a product leader and check that you're delivering against it. In those two instances, there's a huge cross-functional element that needs to be part of product-led growth.

Otherwise, again, you have a very isolated product and probably the wrong proposition. I think the other thing is that a lot of people will assume that when you get product right, it should sell itself. One of the things I see a challenge with businesses, both digital and traditional, is the lack of focus and professionalism around go-to-market. Only a few companies really actually succeed through pure product-led growth, where literally--

[00:24:01] Kimberly: The iPhones of the world. [laughs]

[00:24:03] David: Exactly. Also, you look at what Apple puts into marketing and service.

[00:24:08] Kimberly: Yes. They have a great product and they don't rest on their laurels.

[00:24:12] David: Exactly. It's almost always a hybrid approach where, propositions and products still need to benefit from traditional sales and marketing for customer acquisition, for customer growth, things like that. Again, we always talk about-- in my company, we talk about four in the box. You have a data scientist, you have a product leader, you have an engineering leader, and you have a sales leader. Between them, you remove one of them from that equation and you're not going to get to a good customer outcome.

It's that cross-functional piece. Yes, I mentioned it before, one of the other myths is that product-led growth isn't about your organization, it is about your Product with a capital P and product with a little P, but actually product-led growth is 100% about your customers. Product-led growth can only work when it's the right thing for your target customers. It's your customer's preference that will determine if it's a success. It's always going back and testing, is this right for the customer?

[00:25:32] Kimberly: Product-led growth is actually a little bit of a misnomer. It's still fundamentally customer-led growth, but-- [chuckles]

[00:25:39] David: Absolutely. I think particularly in my sphere where I've been in B2B for, 10 years-plus and we always assume that product-led growth is a B2C thing, it's not a B2B phenomenon, but we're seeing a huge revolution in B2B buying and selling. Many B2B buyers. they're demanding almost a sure thing these days. They'll only commit when they're absolutely certain they're getting what they want and what they need.

A lot of customers are business customers, they're tired of long deployments. They're tired of the extensive customizations needed. They expect expert support and they expect guidance along their journey from trial to pilot to purchase, they want hands-on transparent collaboration when deciding to commit to a company or not. All of these things go way beyond how in the past we've defined product-led growth.

[00:26:49] Kimberly: We've talked about a number of the hot or well-known product phrases these days around product thinking and product-led growth, I'll throw another one at you, and I'm particularly curious given the business that Dunnhumby's in of, what your thoughts are on really moving and starting to treat data as a product?

[00:27:13] David: Absolutely. When I think about Dunnhumby, data sciences are our beating heart, and if that's the case, then data is essentially the lifeblood that both we and our clients live on. For me, when people talk about data as a product or data as a proposition, I think it's almost self-evident these days because anybody who's not treating data, whether it's customer data or anything else, anybody who's not treating it as the most valuable product that they have, then they are going to be quickly left behind by any number of traditional competitors or new competitors.

I think, by default, data is absolutely an essential product for anybody's business and it's exciting to see what we can do with data for big retailers, whether it's Tesco, Walmart, or others. I think where these organizations that are out in front in thinking of data as a product, either that they provide or that they buy, you're seeing a huge transformation in their capabilities.

If you think about these days, high inflationary environments, particularly for retailers, margins are squeezed. One of the biggest challenges is how do I find additional revenue streams outside my traditional grocery or retail business. Data is really one of the big fueling factors of those other revenue streams.

We do a lot of work with retailers to monetize their advertising inventory, whether that's in the store, whether that's on their websites and other digital platforms, or that could even be through other third parties like Pinterest or Facebook or whatever. Really what fuels a successful media proposition is data to make sure you're targeting your advertisements and your promotions at the right audience.

That is 100% down to data. In a lot of ways, you can talk about something like retail media, which is one of the big buzzwords, big business opportunities these days, you can almost call that data as a product in and of itself because you may be selling inventory, but you're only successful in selling that inventory if you can ensure that there's a very high return on your ad spend. That comes from using the data about who customers are, what they want, what they've bought before in a way that--

[00:30:15] Kimberly: Very much integrated to the entire value chain there. You have to get it right. Otherwise, it's like a domino effect.

[00:30:22] David: Exactly. I struggle these days to think about a particular success story that hasn't been founded on using data in a different or powerful way.

[00:30:33] Kimberly: Glad to hear it, especially coming from a company that's centered around all things data. I think we here at ThoughtWorks have a very similar mentality when it comes to data as a product. Maybe just one more question for you, David, I know we've talked about it a little implicitly in some of the other areas earlier, but what do you think really makes for a strong product leader/business leader? I think one of the things you already talked about is really having a product leader have that business acumen, that business mindset. That's probably one of the things, but would love to understand, what else is on your list?

[00:31:17] David: Yes. Just to go back to that point, when I say good product leaders first is a great business leader, at the end of the day, the important thing as a product leader is we're responsible for ROI, and that's making a good decision about where to invest. You can be the best agile guru out there. You can be the best product evangelist on Ted, but if you can't make good investment decisions, the rest doesn't matter.

[00:31:49] Kimberly: Your product won't exist after long. [chuckles]

[00:31:53] David: Exactly. As I've changed roles over the years and gone through interviews, I think I've found one of the other challenges is many companies over-index on domain experience in product leaders. You must have deep experience in this specific industry or with this specific product. You must have 15 years deep experience in underwriting products.

For me, actually gaining the understanding of an industry, it's consumers, that's part and parcel of being a great product leader. It partly comes from my consulting background as well, but really the more senior you are as a product leader, the more capable you need to be to really tackle a new industry, tackle a new concept, be able to quite quickly think strategically about a new area, particularly when we're talking more and more these days about innovation.

Innovation comes from not just thinking about something differently, but you're thinking better. You're thinking ahead. You're doing things that other people aren't doing or you're doing them better. I think a critical piece for a good product leader is that ability to quickly get into a topic, diagnose the problem, define the problem in a way that makes it easier to then solve. I always tell my team, a problem well-defined is a problem half solved.

I think those skillsets around being able to get to the nature of a problem, whether it's a customer problem, an industry problem, or what have you, is more and more critical every day, given that the pace of change, and given the fact that there's-- it feels like there's not a whole lot of white space left where you're entering an area that nobody else has thought about, and you have the benefit of first-mover advantage. There's very few places I can think about where there's not going to be somebody else in there thinking about the problem, as well as you.

[00:34:14] Kimberly: Yes. That blue ocean is pretty full. [chuckles] We have to look for those spaces.

[00:34:21] David: Yes. More and more, those kinds of concepts like blue ocean thinking, the things you apply to what you know today as opposed to being ways to think about something fundamentally new and different. It's getting harder and harder, and the businesses that succeed are the ones who have really the internal tooling set up to take big bets and to ship big bets.

In product, we always talk about agile development and delivering small increments rapidly. That's great when you're talking about feature development, things like that. When you're talking about the next iPhone or something like that, there's a whole lot more that goes into a business that's able to take and ship big bets. I'm a proponent of the fact that seven-tenths of innovation is around execution.

Lots of people and lots of companies have great ideas, but those that truly succeed are the ones that can efficiently and effectively translate those ideas into something that makes the customer happy while meeting the objectives of your business. I think that execution is an old buzzword, but one keeps coming to play in my day-to-day job.

[00:35:55] Kimberly: Yes, absolutely. Product leader as problem diagnoser, problem solver, change enabler, and executor, there's a lot in there. I think that's probably what makes it such an incredibly exciting and rewarding space for people who are focused on product.

[00:36:12] David: Yes. I've talked to some sales colleagues in the past. There's always that back and forth. I always feel like sales is the hardest job in the world. It takes constant commitment, but I've talked to sales colleagues and they say, "Look, I always think product is the toughest one because you have to speak a lot of different languages. You need to speak enough technology. You need to speak enough [unintelligible 00:36:40], you need to speak a little data science, you need to speak finance, you need to speak engineering, you need to speak sales and customer."

A lot of times with the product role as that connective tissue between all of those different functions and capabilities, yes, it's tough. You have to wear a lot of hats, but I think for me, it's what's exciting too because I do get to wear a lot of hats. I get to have a lot of different and interesting conversations every day. I get to learn a lot every day because I'm not an expert in sales. I'm not an expert in data science. I need to be constantly upping my game in all of those areas.

[00:37:23] Kimberly: It sounds like you're never bored, which is a good thing, at least in my book.

[00:37:29] David: I've not been bored for a long time. That's for sure. Any company that is playing in the data space today, it's a constant evolution because well, how many of us heard about generative AI 12, 18 months ago? It's now taken the world by storm. I'm thinking in my mind, what's going to be the next GenAI? We have hundreds of data scientists here who are thinking that very same thing, which is, again, an exciting place to be.

[00:38:09] Kimberly: I'm glad you brought it up because I can't believe we made it all the way to the end of our conversation and only now mentioned GenAI. I feel like that's not allowed these days, but, yes, it's definitely one of those things that has A massive potential to shift a lot of different industries, for sure.

[00:38:28] David: Yes.

[00:38:29] Kimberly: David, I think you've done a great job in illuminating what is changing in product, what folks need to really focus on to be digital instead of do digital. I know our listeners will take away a lot of valuable insights today. Thank you so much for joining us and sharing your time and your insights. We really appreciate it.

[00:38:51] David: My pleasure. These are always the great conversations where I do get to step out of the day job and talk about interesting things, just for the sake of it.

[00:39:00] Kimberly: Right. Now you're a podcast veteran. Go forth and have many more. [chuckles]

[00:39:06] David: True. Yes, I'll have to think about what the next topic is.

[00:39:10] Kimberly: All right. Thanks so much for joining us for this episode of Pragmatism in Practice. If you'd like to listen to similar podcasts, please visit us at thoughtworks.com/podcasts. If you enjoyed the show, help spread the word by rating us on your preferred podcast platform.

[00:39:24] David: Excellent. No, thank you very much. I really enjoyed that.

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