1、The product management paradoxShed the schedule,obsess over valueIBM Institute for Business Value|Research BriefThe product management paradox1IntroductionThe repercussions are enormous:researchers expect that 40%of total revenue for largest 2,000 organizations globally will be generated by digital

2、products,services,and experiences by 2026.4 In other research,81%of respondents strongly agree that a robust digital product experience positively impacts business growth.5Given the growing importance of digital products,we surveyed 300 US organizations to understand their approaches to digital prod

3、uct development.Two groups emergedProject Planners and Value Champions.Surprisingly,both enjoy positive business resultsin the short term.But Value Champions are notably better positioned for long-term success(see Figure 1).Many companies are becoming software companies,creating new digital products

4、 to serve their customers and partners better.1 The savviest executives understand that employees and customers expect a great digital experience with every product and service.2 From manufacturing furniture to filling prescriptions,50%of companiesand 70%of top performersnow use software application

5、s they developed internally to differentiate themselves from their competition.3FIGURE 1Value Champions versus Project Planners:Both groups perform highly,but only one is positioned for lasting successNote:Data is self-reported by respondents.Value ChampionsProject Planners18%fasterWeeks to target R

6、OI14%more223%more44%moreROI growth in 3 yearsOutperform in customer satisfactionOutperform in cost savings33%29%84%26%79%55%3239The product management paradox2Both groups are enjoying short-term gains,suggesting that they are taking a successful approach to product development.But we see clear diffe

7、rences between those who define a product mindset only as a series of tasks or a work structure,and those who adopt a true product mindset:creating a holistic experience for the customer throughout the full life cycle of the product.Project Planners fall firmly in the“series of tasks”camp.They march

8、 to a project mindset that focuses on deliverables,schedules,activities,and a completion datebut this emphasis can distract from determining the actual value delivered.Despite their more myopic perspective,Project Planners still perform quite well in revenue growth and profitability.However,these re

9、sults are likely to be short-lived because they notably underperform in customer satisfaction and innovation,which does not bode well for the future.On the other hand,Value Champions embrace a powerful product mindset,finding ways to systemize the intake of customer,business,and product needs to hel

10、p ensure value is at the heart of each release(see Figure 2).Successfully balancing customer value with business value and product value,Value Champions achieve their target ROI up to seven weeks faster(18%faster)than Project Planners.And nearly eight in ten(79%)report outperforming their competitio

11、n in cost savings.FIGURE 2Value obsession:At the heart of championsLead with customer needsConduct user research before each release.Customer valueBusiness valueProduct valueValidate success and measure outcomesInvest as much energy intopost-launch learning as intobuilding the product.Methodically a

12、ssess and deliver value at scale Use a standard,systematic process for assessing the value of features before prioritizing them.Embrace feedback,with the philosophy that continuous customer feedback de-risks product strategy.Thrive on continuous feedbackThe product management paradox3Value Champions

13、 also exemplify how a purpose-driven culture fosters strong unity throughout the enterprise,with a focused vision and cohesiveness that create higher employee morale and satis-faction across IT and business teams.This philosophy is widespread in successful organizations:research shows that CEOs of o

14、utperforming organizations identify a sense of purpose as mission-critical for employee engagement at a rate 53%higher than underperformers.6Why adopt a Value Champion approach?If values such as customer and employee satisfaction havent convinced you,consider this.Our research shows a customer advoc

15、acy strategy doesnt just benefit customersits good business as well.84%of Value Champions report outperforming competitors in customer satisfaction,compared to only 26%of Project Planners(see Figure 3).And 89%of Value Champions reported their product increased their customer retention in 2022.Custom

16、er needs continuously changeand so do business needs.Champions are ready.They systematically assess the value of what theyll work on nextenabling quick shifts that both align with market changes and make sense for the organization.For the most part,Project Planners havent developed these systematic

17、approaches.Although they achieve their monetary targets today,without priori-tizing continuous innovation,customer feedback,and overall value,they risk losing momentum going forward.The inevitable customer and business pivots that Champions manage gracefully can derail their Project Planner counterp

18、arts.For Project Planners,todays good business results may obscure tomorrows challenges.For example,most Project Planners excelled in increasing market share in 2022,and they achieve high revenue and profit-ability in the short term.But appealing to the masses characterizes a more generic offering,w

19、hereas consumers are increasingly gravitating toward personalized,customizable products.Research shows that more than 70%of consumers expect personalization and are frustrated when companies dont deliver it.7 In other words,a success based on mass appeal could seem positivebut prove detrimental in t

20、he future.Why do Value Champions have such a clear advantage?Our research reveals three distinct strategies that differentiate them from their Project Planner peersstrategies that virtually any organization could emulate.So,lets get started.FIGURE 3Outcomes are what counts74%of Value Champions measu

21、re success in terms of business and customer outcomes,rather thandevelopment effort 55%of Project Plannersversus onlyThe product management paradox41.Use continuous,value-based iterations to boost business results that mattertoday and in the futureFrequent releases may achieve milestones for a corpo

22、rate objective,agile sprint,or team performance plan.But what are they accomplishing?Project Planners tend to minimize this critical detail.This group releases products iteratively,yet their releases are deploying features based on predetermined schedules rather than strategic launches based on valu

23、e and associated feedback.They are missing something essentiala protocol for determining customer,business,and product value before establishing priorities(see Perspective“Balancing act”).In fact,more than half of this group(53%)lack a system for assessing the value of features at all before priorit

24、izing them.The problem lies,in part,with the classic success criteria used in project management:on-schedule,on-budget,and on-quality delivery.But whats missing?Value:a dedication to value-based outcomes over a products lifespan.8 An on-time,on-budget,high-quality project that doesnt meet customer a

25、nd business needsor evolve with themactually adds no value at all.While adhering to a schedule is well and good,not all releases are created equal.Value Champions opt for organizationally aligned,customer-centric launches over simply deploying new code.They release strategically with customer,busine

26、ss,and product value top of mind,rather than speed,cost,or feasibility alone.These launches are primarily enabled by Value Champions systemized ability to absorb customer and organizational feedback,assess value,and prioritize accordingly.Our research also uncovered a paradox.Given their strict adhe

27、rence to schedules,you would think Project Planners move faster than value-obsessed Champions.In reality,its the other way around.Champions release new features every 12 weeksthree weeks(20%)faster than Project Planners.More impressively,Value Champions also achieve financial metrics that are well-p

28、ositioned for growth going forward.Our research shows a skyrocketing average ROI increase for their digital product of 33%in just three years(see Figure 4),and projected ROI of 76%growth from 20202025.The product management paradox5Customer value Will an initiative,product,or feature address an unme

29、t need or pain point?Customer value is the measurable impact achieved by the customer when a product is used.To determine customer value,teams use research to identify customer pain points and uncover opportunities to solve them.Product value Will the benefits of an initiative or feature improve pro

30、duct engagement and outweigh the resources expended?Product value is finding the balance between the“stickiness”of a product(high user engagement)and justifying the resources required to achieve that result.To determine this,teams study previous successes and apply continuous learning to product enh

31、ancements.PerspectiveBalancing act:Tracking value in three ways9 Is your organization measuring all three types of value?5Business value Will an initiative,product,or feature drive measurable business value?Business value creates alignment between product outcomes and key performance indicators(KPIs

32、).To determine business value,define KPIs with leadership and continuously measure product outcomes.The product management paradox62.Operationalize a system that evolves with customer and business needs The trifecta of customer,business,and product value measurement is powerful.But how do Value Cham

33、pions keep up with continuously shifting needs?Why do Project Planners lag behind?For starters,Value Champions have a deep understanding of their customer and have an ability to evolve with change.What do customers actually want and need today?In a month?In a year?While Value Champions invest deeply

34、 in continuous customer learning,Project Planners could well respond with a blank staremonitoring,analyzing,and keeping pace with customer needs is their Achilles heel.They can only guess at what customers need today and certainly arent anticipating what theyll need tomorrow.Surprisingly,four in ten

35、(41%)of Project Planners lack a standardized method for collecting post-launch customer feedback.They do go through the motions of conducting user research,but it can be,to an extent,performative.Only 51%of Project Planners view their digital product as a lifelong,continuously evolving initiative,co

36、mpared to 89%of Value Champions(see Figure 4).In other words,theyre viewing their product as a projectan ill-advised strategy in the continuously changing world we live in.FIGURE 4Value Champions make the commitmentlikely to view their digital product as a lifelong,continuously evolving initiative.7

37、5%Value Champions aremoreThe product management paradox7As well,Value Champions systemize their prioritization of features.Customer value is a large part of that formulabut how does it balance against business value and actual product improvements?And how can it be monitored?Measuring value at enter

38、prise scale requires methodically tracing value from inception to outcomenurturing high-value opportunities and leaving behind lower-value,resource-guzzling efforts.Value Champions have mastered operationalizingin a sense,orchestratingvalue.Value orchestration is all about respon-siveness and fluidi

39、ty.By concentrating on these four logical steps,organizations can be both reactive and effective.They can recognize and evaluate market opportu-nitiesand improvise quickly and iteratively to develop solutions that deliver real value.And generative AI can further streamline the responsiveness that co

40、mes with value orchestration.This technology can be trained to highlight feedback and ideas most aligned with business strategies,and to minimize or eliminate whats not relevant(see Perspective:“Generative AI”on page 8).In fact,62%of global executives say that generative AI is the top trend they exp

41、ect to disrupt the way their organizations design experiences going forward.10 Align on strategic outcomesIdentify gaps in current initiatives ability to deliver meaningful value and accelerate outcomesIdentify and breakdown valueAssess all decisions based on data,drawing connections between busines

42、s goals,user needs,and expected valuePrioritize by mapping value to effortShift the focus from a large program of work or multi-year delivery schedules to smaller reasonable,and measurable effortsMeasure and report incremental valueTrace value throughout the lifecycle to dynamically meet user demand

43、 while also managing business expectationsThe product management paradox71234As a starting point,consider four steps to delivering value at scale:11The product management paradox8According to IBM IBV research,85%of execs say generative AI will interact directly with customers in the next two years.B

44、ut the real value comes as the technology grows more sophisticated.Thats when agents can forge the emotional connections with customers that yield fresh new insights and opportunities.Its about taking risksand conquering themwith the help of this ever-advancing technology.In effect,generative AI is

45、a research tool to collect and analyze sentiment-based metrics for each customer service interactionrapidly analyzing and prioritizing large volumes of feedback.And generative AI is not just for facilitating and analyzing interactions and engagementit can also drive innovation.Organizations can use

46、it to mine new opportunities with customers and monitor customer service success to see how applications influence sales and customer loyalty.In short,generative AI can help organizations listen,test,and action responsibly.PerspectiveGenerative AI Hunter,gatherer,interpreter of customer feedback128o

47、f executives say generative AI will interact directly with customers in the next two years.85%The product management paradox93.Align IT and business organizations behind an unshakable commitment to outcomes over outputs.For Value Champions,experimentation,creativity,and“failing toward victory”advanc

48、e a singular mission:a commitment to driving experiences,outcomes,and value for their customersand their business.This commitment creates unity,a purpose-driven enterprise that sees nearly 67%greater organizational alignment and 79%more employee satisfaction than Project Planners(see Figure 5).Value

49、-driven commitment can make IT and the business organization fast friends and devoted allies.In fact,Champions are 130%more likely to enjoy tighter collaboration among product management,IT,and business stakeholders than Project Planners.more employee satisfaction79%67%greater organizationalignmentF

50、IGURE 5A unified,purpose-driven enterpriseValue ChampionsThe product management paradox10Both IT and business organizations thrive on creativity and innovationbut these characteristics evaporate in a barren,fearful desert devoid of free thinking.In fact,IBM IBV research shows that a culture of not p

51、enalizing failure in the context of technology adoption and digital transformation delivers a 10%revenue growth bump.13 To that point,Value Champions are 53%more likely to support a culture of experimentation,failure,and learning than Project Planners.Champions dont just advocate for their customers

52、,theyre supporting their employees,too.Value Champions build organizations that,by their nature,have a different DNA than those of Project Planners.Their cultures are both creative and logical:two-thirds(66%)of Value Champions are committed to exploring customer problems before devising solutions.Ma

53、kes sense,right?Yet a mere 26%of Project Planners share this dedicationno surprise given their weakness at systemizing the intake of customer needs(see Figure 6).And another Champion advantage:more than half(55%)have established a top priority of improving existing products and services over the nex

54、t two years.Value Champions see their products through the lens of the long haul,viewing them as ongoing processes.Champions dont automatically jump on the next shiny trendunless it drives value for the customer and the business.FIGURE 6Digging deeper66%of Value Champions are committed to exploring

55、customer problems26%of Project Planners share this dedicationOnlyChampions dont just advocate for their customers,theyre supporting their employees,too.2.5x moreThe product management paradox11Historically,this global auto manufacturer had a 100%centralized IT organization,which acted as a shared se

56、rvice across business domains to control costs in this historically low margin industry.However,the automotive industry has started to rapidly diversify,driven by new digital-first entrants.As a result,this original equipment manufacturer(OEM)needed to make fundamental changes to capture their share

57、 of new,higher-margin revenue streams.Case studyGlobal auto manufacturer14Aligning IT infrastructure to business needsThe automaker decided to develop digital products that it could sell directly to consumers,such as navigation,emergency road services,autonomous driving,and entertainment packages.Bu

58、t it quickly encountered a roadblock:the existing centralized IT structure was slow,methodical,cost-contained,and overall unsuitable for agile software product development.To address this issue,the automaker restructured its IT organization by spinning off a dedicated business unit focused on digita

59、l products.The new structure was aligned by product lines,with each having four functions:business,product,tech,and experience.However,there were challenges in the transformation process.The automaker quickly realized that many of its foundational capabilities needed to build and deliver customer-fa

60、cing products were insufficient,fragmented,or just out of date.To address these foundational issues,the automaker engaged IBM to help transform its core business-to-consumer capabilities.The program had a host of objectives,including more stable customer experiences,more reliable customer interactio

61、ns,faster release time lines,and more frictionless transactions,among others.At the end of the day,the organization will rely on these new capabilities to position it to grow its direct-to-consumer business by more than 20 times over the next five years.11More challenges lie ahead.But by restructuri

62、ng and dedicating resources based on targeted digital business needs,the company has made significant strides toward achieving its goals in the rapidly evolving automotive industry.The product management paradox12Creating lasting successThe differences between Project Planners and Value Champions ar

63、e nuanced,but they are no less critical.Our research shows key evidence that Project Planners can see fleeting success,while Value Champions can operationalize long-term success at the enterprise level(see Figure 7).Planners can do well,for the moment,operating with an“output-focused”mindset.They mi

64、ght even understand the need for a broader,customer-centric perspective.But without the trifecta of customer,business,and product value driving their priorities,and a systematic way to operationalize outcomes over outputs,Project Planners risk losing momentum or even grinding to a halt the moment th

65、e market evolves yet again.Value Champions evolve at scale,outperforming their Project Planner counterparts with more frequent releases that align with customer,business,and product needs.Champions know that delivering a product isnt a one and done,its an ongoing relay that requires organizations to

66、 move with intention,sprinting in bursts to one finish line and strategically determining the next destination.Value Champions are certain of this:if you think the finish line is the end,youre finished.FIGURE 7The foundations of long-term success130%more likely to enjoy tighter collaboration between

67、 product management,IT,and business stakeholders89%report their products increasing their customer retention20%faster speed to release than Project Planners33%ROI increase from their digital products in just three years76%projected ROI growth from 20202025Value ChampionsNote:Data is self-reported by

68、 respondents.The product management paradox13Dixie AdamsManaging PartnerDigital Product Engineering,IBM C has a passion for understanding the intersection of business and technology.She has more than 25 years of experience in IT strategy,systems and technology deployment,and digital transformation.D

69、ixie works closely with clients to create technology strategies that align to their business objectives and key imperatives.Scott HarperFounder/CEO,D believes in building a better world through technology innovation.He specializes in strategy,ideation,design,user experience,architecture,development,

70、and building amazing teams.Scott brings a strong product discipline,proven track record for client delivery,and a mindset of innovation and collaboration to drive digital transformation for enterprises across all industry sectors.About the authors Nisha KohliGlobal Research Lead,IBM Institute for Bu

71、siness V is an experienced consultant and thought leader in digital product design and engineering.She specializes in Experience Strategy and has led complex,end-to-end user experience transformations for clients across multiple industries including consumer goods,travel and transportation and pharm

72、aceutical retail.She helps organizations transform their business by designing and delivering meaningful digital experiences.The product management paradox14Notes and sources 1 Gnanasambandam,Chandra,Janaki Palaniappan,and Jeremy Schneider.“Every company is a software company:Six must dos to succeed

73、.”McKinsey Quarterly.December 13,2022.https:/ 2 Granger,John,Jesus Mantas,and Salima Lin.Seven Bets.IBM Institute for Business Value.May 2023.https:/ibm.co/seven-bets 3 Gnanasambandam,Chandra,Janaki Palaniappan,and Jeremy Schneider.“Every company is a software company:Six must dos to succeed.”McKins

74、ey Quarterly.December 13,2022.https:/ as cited in Seven Bets.IBM Institute for Business Value.May 2023.https:/ibm.co/seven-bets4 Carosella,Giulia et al.IDC FutureScape:Worldwide Digital Business Strategies 2023 Predictions.IDC.October 2022.https:/ as cited in“Qualtrics Announces General Availability

75、 of Customer Journey Optimizer,Helping Companies Identify and Eliminate Points of Friction for Customers.”Businesswire.June 1,2023.https:/ Institute for Business ValueThe IBM Institute for Business Value(IBV)delivers trusted,technology-based business insights by combining expertise from industry thi

76、nkers,leading academics,and subject matter experts with global research and performance data.The IBV thought leadership portfolio includes research deep dives,benchmarking and performance comparisons,and data visualizations that support business decision making across regions,industries and technolo

77、gies.For more informationTo stay connected and informed,sign up to receive IBVs email newsletter at can also find us on LinkedIn at https:/ibm.co/ibv-linkedin.Copyright IBM Corporation 2023IBM Corporation New Orchard Road Armonk,NY 10504Produced in the United States of America|October 2023IBM,the IB

78、M logo, and Watson are trademarks of International Business Machines Corp.,registered in many jurisdictions worldwide.Other product and service names might be trademarks of IBM or other companies.A current list of IBM trademarks is available on the web at“Copyright and trademark information”at: docu

79、ment is current as of the initial date of publication and may be changed by IBM at any time.Not all offerings are available in every country in which IBM operates.THE INFORMATION IN THIS DOCUMENT IS PROVIDED“AS IS”WITHOUT ANY WARRANTY,EXPRESS OR IMPLIED,INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTAB

80、ILITY,FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT.IBM products are warranted according to the terms and conditions of the agreements under which they are provided.This report is intended for general guidance only.It is not intended to be a substitute for detail

81、ed research or the exercise of professional judgment.IBM shall not be responsible for any loss whatsoever sustained by any organization or person who relies on this publication.The data used in this report may be derived from third-party sources and IBM does not independently verify,validate or audi

82、t such data.The results from the use of such data are provided on an“as is”basis and IBM makes no representations or warranties,express or implied.ZPO1QO5A-USEN-005“Report:81%agree that positive digital product experience impacts business growth.”VentureBeat.December 5,2022.https:/ Business Review A

83、nalytic Services sponsored by Gainsight PX.“Achieving Growth With Positive Product Experiences.”Gainsight.https:/ 6 Find your essential:How to thrive in a post-pandemic reality.Global C-suite Series.The 2021 CEO Study.IBM Institute for Business Value.February 2021.https:/ 7 Kohli,Sajal.The world of

84、ands:Consumers set the tone.McKinsey&Company.June 8,2023.https:/ 8 Kelly,Allan.Project Myopia:Why Projects Damage Software.Leanpub:September 19,2018.9 Based on internal IBM information.10 The CEOs guide to generative AI:Customer&employee experience.Experience is everything.IBM Institute for Business

85、 Value.2023.https:/ Based on internal IBM information.12 The CEOs guide to generative AI:Customer service.From cost center to value creator.IBM Institute for Business Value.2023.Published and unpublished material.https:/ 13 Payraudeau,Jean-Stphane,Anthony Marshall,and Jacob Dencik.Extending Digital Acceleration:Unleashing the business value of technology investments.IBM Institute for Business Value.October 2021.https:/ibm.co/extending-digital-acceleration as cited in Seven Bets.IBM Institute for Business Value.May 2023.https:/ibm.co/seven-bets14 Based on internal IBM client information.