I’ve been working for quite some time in companies undergoing a digital transformation or that have people, including C-level, not familiar with digital product development methods.
One of the biggest challenges in these companies is moving from a “business demands => technology implements” mindset into a “business brings problems/needs => technology works on understanding these problems/needs with the user, testing solution hypothesis, and implementing a validated solution hypothesis” mindset.
Normally, business people tend to think and say things like “I’m the business person so I’m the person who understands the most about our business problems/needs and how to solve them. You just have to implement what I say”. This business person is thinking about the technology team as a solution implementer team, not a problem solver team or, as Marty Cagan puts it, as a feature team, not an empowered product team.
Instead of giving you just one reason, I’ll list 6 reasons:
The fact that the “business demands => technology implements” has many issues, doesn’t necessarily mean that the other model generates better results. To answer this question, i.e., if the “business brings problems/needs => technology works on understanding these problems/needs with the user, testing solution hypothesis, and implementing a validated solution hypothesis” delivers better results I’ll share an interesting case.
I joined Lopes, the biggest Real Estate consultancy company in Brazil, in late Aug/2020 as CDO (Chief Digital Officer) with the mission to lead their digital transformation. After my onboarding, we implemented OKR, ran the 4Q2020 with the OKR tool, and defined strategic objectives for 2021. Back then, more than 50% of the team was from 3rd-party IT consultancy companies. One of our strategic objectives for 2021 was to phase out our engagement with these IT consultancy companies and hire engineers, product designers, and product managers to build our in-house product development teams. We started the phase-out in Jan/2021 and ended in Jul/2021. During the same time, we hired and onboarded many engineers, product designers, and product managers to replace the product development capability that we had with the parting IT consultancy companies.
The majority of IT consultancy companies run under the “business demands => technology implements” model where they bill by the hour and are measured by their deliverables, without any concern if deliverables bring business results.
The main objective of our digital team has always been since its inception back in 2019 to bring more digital leads, i.e., to bring from digital sources more potential customers interested in buying a property. The chart below shows that when IT consultancy companies, measured by features delivered, were at Lopes we were unable to fulfill this objective. As soon as we started to phase out the IT consultancy companies in Feb/2021 and hire and onboarded engineers, product designers, and product managers to build our in-house product development team which was measured by generating or potentializing leads through digital, we started to see an increase on the numbers of leads in May/2021.
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