Innovation with a Product Mindset – Success with Bottom-Up Innovation

How companies succeed through bottom-up strategies and customer centricity

Agile working and the customer-centric mindset of the start-up world have now become business mainstream. Both corporations and SMEs need to change their ways of working in the long term if they want to stay ahead of the competition in the digital transformation. But how do you live sustainable innovation? A product mindset that is characterized by bottom-up strategies and rewards mistakes helps. With the help of data-driven methodology, companies can offer sustainable digital experiences.

Innovation – what is it actually?

Innovation in a business context means generating new products or services or improving existing ones in order to create sustainable value for customers and companies. It is about providing an optimal experience for customers and satisfying needs in the best possible way. To make this possible, companies need to align their business strategy in an agile way with a volatile market that does not allow for long-term static planning.

Innovation involves the interplay of spontaneous play, creative creativity and dreamy adventurousness. At the same time, it means adopting an interdisciplinary and generalist approach, while improvising only within the boundaries of one’s own core competencies. Perfection was yesterday, because you only learn from mistakes: Innovative companies therefore rely on a combination of product mindset and bottom-up strategies to fully exploit their potential. In this way, they can not only increase their competitive advantage but also improve customer satisfaction.

A product mindset can help companies innovate because it emphasizes changes in perspective. A product-oriented view focuses flexibly on customer benefits instead of aligning the development process with a predefined release mechanism. To successfully implement new things, a company should be able to listen to creative ideas from all employees – from the board of directors down to the technical department – and bring ideas to implementation in a systematic and scalable way. Such a participative corporate culture strengthens corporate identity, employee loyalty through a sense of purpose in work, and the courage to try out new methods.

Identifying pain points – the role of customers in product management

How does a company find out what its customers’ problems are and what it needs to do to solve them? It makes sense to use different research methods to find out which “pain points” exist with customers. Pain points are, on the one hand, points of discomfort in the use of an existing product or service that enable the company to identify weaknesses in the product or service and improve it. Pain points are also, more generally, obstacles in daily life that make everyday activities more difficult for customers.

Customer data is a valuable source for idea generation and innovation. Companies should try to get feedback directly from the users of the product or service and listen carefully and empathetically. This can be done either through customer surveys, interviews or direct communication. Companies should interact with their community on a regular basis, not just occasionally, and engage in dialogue through the company website, forums and social media. It is important to constantly measure and monitor the customer experience as part of the innovation process. Because market conditions and customer expectations can change rapidly, companies need to make timely adjustments to remain successful with their products or services.

Customer service and customer support can help to create requirement and problem profiles as well as suggest potential solutions. In addition, customer service can also act as a facilitator: It can establish contact with the end user and take their opinions and pass them on to management. In this way, the management level can in turn better understand what the end users really need.

Innovation in the company through bottom-up strategies

Existing business processes have often evolved according to the internal needs of organizational units and departments. In a VUCA world with dynamic market development, these processes prove too rigid to respond to changing conditions. If, as in classic companies, strategies are designed only at the top corporate level and are passed top down to the departments, they are adapted too rarely. Similarly, potentials of technological innovations for value creation are not recognized in time. Even though, according to a survey, more than half of the companies in Germany have strategies for digitization in individual divisions, two-thirds of the companies lack a central cross-departmental strategy.

An innovation-focused strategy should be a shared responsibility of all departments, not just top management. A bottom-up approach has the ability to create a strong and effective culture of innovation. If the strategy is continuously aligned with customer requirements, valuable insights about target groups can be incorporated into digital product development without having to restructure departments. What is needed above all, however, is a continuous feedback loop that includes results from management, but also from customer support and sales in equal measure. In addition, flat hierarchies allow employees to develop and test new ideas and solutions without being too bound by management’s directives. This, when done right, creates a dynamic environment where teams can develop autonomously.

It is often a combination of top-down and bottom-up strategy that brings success. Strategic goals are set at high altitude as a guiding vision without hindering creative potentials of implementation. An appreciative corporate culture that promotes constructive criticism and an honest culture of error instead of cementing the power of the organizational structure through delegation and blame generates trust and courageous entrepreneurship at all levels. Cross-functional teams encourage internal knowledge sharing and the adoption of new perspectives. This approach enables employees to be idea generators and produce powerful solutions that have the potential to generate more revenue in the long run.

The Product Mindset – Smart goals and data-driven decisions.

The Product Mindset is a good example of innovation driven across departments. This approach promises better engagement, cost savings, and faster time to market. The idea is to first understand what customers want and need before starting product development. Being open to new ideas and collecting feedback from customers is not enough; you also need to ask the right questions. These questions determine the assumptions about customers and what they want from the future and support the product vision. It is important that assumptions are continuously reviewed and adjusted during the course of product development. This also means dropping false assumptions, even if it means discarding software that has already been developed. In a world that is less and less characterized by stable structures, this approach is an efficient way of dealing with uncertainty.

The Product Mindset focuses on data analysis in addition to customer focus. Some of the key components of the Product Mindset are smart (SMART) goals, agile methods, data-driven decision making, and research and testing methods. Smart goals are clearly defined objectives that are specific (specific), measurable (measurable), attainable (attainable), reasonable (reasonable), and time-bound (time-bound). They help teams determine the progress of development and the measurability of their results. Agile methodologies are based on the principle of “sprints,” where tasks are divided into short iterations and then completed incrementally. Instead of long-term planning and the goal of completeness, the focus shifts to trial and error according to the sandbox principle, with a clear division of roles being an important prerequisite. This flexible approach allows teams to make changes or test new ideas without having to restart the entire process.

Research and testing methodologies help validate or reject new ideas quickly. A well-ordered and prioritized backlog provides a holistic overview of the product portfolio. Epics and user stories help plan sprints and translate assumptions into concrete user requirements and features. With the help of these concepts, companies can find innovative solution options to further develop their product or service for customers through prototyping, early market entry as MVP, frequent experimentation and regular software updates.

Generating value through sustainable digital experiences

A sustainable digital experience is essential today to capture and retain the attention of customers. What does that mean? The experience in the digital space should not only serve short-term stimuli and subconscious triggers, but should satisfy the customer’s intrinsic motivation and generate long-term value creation. A product or service must not only be easy to use, but must also offer the customer tangible added value for his or her life. This should not only be ascertainable on a cognitive level, but also satisfy emotional needs. A product should never manipulate the customer or steer him in a certain direction against his will – sooner or later, this will have a negative impact on his well-being and make him associate the product or brand with bad experiences or even reject it.

A company’s brand is more than what it says about itself in marketing messages. It’s about how customers experience it. The digital space has made community the most important variable. Customers are less and less guided by perfectly staged advertising videos, but trust product reviews from users or the influencer of their choice. Digital products are thus becoming promises and shared experiences that connect people. A digital product has long been more than just software: it is an experience that can be a journey, a mission, or a process of continuous improvement. If companies create a sustainable digital experience that enriches customers’ lives, they can increase their value. When customers have a positive digital experience, they will prefer and recommend the brand.

Conclusion – Innovation with Product Mindset drives change.

A Product Mindset helps companies drive change and respond to new challenges. Bottom-up strategies and customer centricity can serve as catalysts for innovation. Most importantly, it requires a combination of a vision that involves everyone in the company and a comprehensive understanding of digital business models. When business processes are designed to be data-driven and both employee data literacy and ownership are strengthened, companies can increase growth and open up new avenues.

A product mindset actively drives sustainable change by focusing on the intrinsic needs of the customer and sustainable value creation instead of reacting to hypes without reflection. At the same time, this approach helps companies to act more flexibly and respond more specifically to changes in their markets.  In summary, then, innovation with Product Mindset can give companies a competitive edge.

Simone Belko is a media scientist and European studies scholar with a strong focus on digital literacy. With experience in journalism, PR, marketing, IT and training she has excelled in Germany and abroad. As a manager for digital products in the online games and FinTech industry she gained deep insights into online platforms and communities. Simone is the author of "Digital Consciousness" ("Das digitale Bewusstsein") and currently works at Otto GmbH, leveraging her expertise in business transformation.

Comments are closed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More