Building Value-Driven Products

95% Of Decisions Are Based On Emotion, Not Logic

- G. Zaltman, Harvard Business School

In the land of the blind

Many businesses’ approach to productization is twofold, involving both business development and technology. The former is a top-down exercise, the latter a bottom-up. Both aim to unlock value and growth, but it’s rare for them to converge. This means that the most lucrative propositions – born where top-down business cases meet bottom-up data science and technology research – aren’t accessible to many companies.

Why? Because most companies today are not value- or data-driven. Instead, they are guided by cost, risk, and project orientation. Making it difficult if not impossible for them to articulate ROI and business impact.

Enter any company’s office, hook up with the product team, look at their backlog or roadmap, cherry-pick a top item as an epic or story, and ask the team the most important question that drives informed decision-making: What is the ROI of this story? Then sit back and relax. It might take a while before you get an answer.

Value-driven conduct is an evolutionary leap from data-driven conduct. Requiring you to leverage economic reasoning to power your decision-making and prioritise backlogs based on KPIs like risk vs. reward, cost vs. benefit, EBITDA impact, LTV or ARPU lift, sustainability, privacy considerations, or any commercial KPI that aligns with your business strategy.

Your backlog might entail X% of high-impact growth enablers – but without value management, your team just can’t tell. Using a roadmap without economic reasoning is akin to a pilot flying a plane with his eyes closed.

Throw ego away, partner for success

Growth doesn’t always require dramatic investments. It does require you to leverage partnerships and integrate best practices and services that others have innovated.

I drafted the following “Low Cost <> Fast Time-To-Market “ slide a couple of years ago to on-board shareholders to my blueprint.

Powering a lean business requires one to modularize and package your value propositions into scalable atomic business units that will enable the business to evolve and adapt according to any desired business case. Scale here isn’t only about resilience, but mainly about growth economics.

While traditional businesses employ armies of developers to build proprietary solutions, tech companies move fast by leveraging cloud infrastructure and off-the-shelf (licensed or open-source) technologies wherever possible. This is how their time-to-market is measured in days or sprints.

Any CTO looking to fuel growth should focus on re-engineering the core business. Anything beyond would be building “for the glory of Rome”. Github holds multi millions of open-source libraries. If something already exists, why reinvent the wheel?

Throw your ego out the window. Become an alchemist, and most of your pain will vanish. It’s no secret that today’s leading brands expand their market share and lead their industries via partnerships and M&A. However, when looking at traditional industries such as banking, telecom, pharma, oil & energy and others, adaptation and partnerships aren’t really happening.

“Keep Your Eyes On The Stars And Your Feet On The Ground.”

 - Theodore Roosevelt

In Conclusion

As we realize more and more benefits for our business while leading in an egoless and transparent manner, we become value-driven.  And once we become value-driven, we can serve our customers better.

The journey to powering decisions based on science and information is a culture shift, one that can start only at the very top. As more leaders shift from making instinct and gut-based decisions to data-driven ones, we will see more industries and companies roll out sensational propositions.