Thriving in today's competitive landscape is no mean feat. There has been an incredible amount of innovation in how companies conceptualize, execute, perform, and grow. With a constant need to disrupt traditional markets and outperform the competition, companies need to keep innovating at a fast pace.
Traditionally, a product company used to leverage the on-premise legacy tools and platforms to support business processes and operations. But, can you step up your innovation game, relying on these legacy systems? Will using the dated technological infrastructure let you scale at the desired speed? The answer is, 'no'!
What exactly is fueling the innovation engine? Let's talk about the top three disruptive and breakthrough product innovation macro trends that are most definitely the right answer to the question.
1. Software Over-the-Air (OTA) Updates
Back in 2007, with the launch of the revolutionary iPhone, one of the major trends that came into the mainstream at scale was OTA. Since then, this has widespread across various market segments. OTA refers to various methods of distributing new software, configuration settings, and even updating encryption keys to devices like mobile phones, set-top boxes, secure communication devices (2-way radios), and now even cars.
One of the critical features of OTA is that a single centralized location can send an update to all the users, who cannot refuse or alter that update in any manner, and that the update instantly applies to everyone on the channel. OTA has dramatically extended the shelf life of hardware products and significantly compressed the time taken for product updates, compared to before.
Smartphone users are now easily able to use their existing phones for at least 2 to 3 years versus having to upgrade or buy a new phone every year. What is in it for the customers' and how do OTA updates provide the much-needed benefits?
With each OTA update, companies can maximize performance, improve battery life, and optimize installed applications. Customers have become more loyal to the brands they are associated with while saving thousands of dollars.
Today, customers eagerly anticipate the OTA releases. This trend is now efficiently extended to IoT devices, networks, and even the automotive industry. While all this sounds magical, a careful and precise product planning is required for successful execution. Software updates need to be managed at the product level, coordinated across all cross-functional teams, and require thorough testing and hardware validation. All these activities require close coordination and collaboration across teams. Launching a software update is 'almost' comparable to launching a 'new product.' While we can't deny the benefits this capability provides to the customers, it certainly pressure tests the existing infrastructure and processes within the company, which was traditionally set up on legacy platforms.
2. Subscription Economy
OTA updates have significantly extended the shelf life of hardware products and have driven companies to build more predictable annuity-based revenue streams through subscription services. Today, most product companies are expanding their offerings to include subscription services. Great subscription offerings such as that of Apple Music, GoPro Plus, and Amazon Prime have served as a role model for more and more product manufacturers entering the similar realm.
We're seeing many companies reengineer and reinvent themselves, with the customer being the focal point of interest. For example, Amazon Prime does not shy away from offering an abundance of goodies and discounts to its customers, coupled with the highest quality of customer service. Google recently entered the cloud gaming service with its Stadia offering high-quality streaming games (4K/60fps/HDR). Gone are the days when customers needed to pay an arm and a leg to purchase proprietary game titles that worked only on exclusive game consoles. With more and more companies making relentless efforts to gain market share and attract users, the future only looks brighter from a consumer's standpoint.
A decade ago, a company like Cisco was highly hardware-driven. But now they have transformed their business model entirely in how they build, market, and sell products. They leveraged a customer experience (CX) strategy to successfully execute this business transformation ($12.5B in annual services).
A common thread across all these transformations is the constant need to deliver the answer to the question 'how to maximize customer satisfaction and service them to offer their personalized definition of product success'? A customer has never been this powerful, and this justifies the 'rise' of the customer.
3. Iterative scrum hardware development
OTA and subscription-driven product offerings have steered product hardware teams to consider scrum-based hardware development, just like their software counterparts. Teams at companies have adopted a scrum-based, an iterative, and 'burst' approach to hardware development. Product teams must collaborate closely to meet and exceed customers' expectations while meeting the development timelines that have shrunk dramatically.
Using the above approaches, companies have successfully churned out some of the best products over the last decade. And, this is only a start!
More from the author I Product Commercialization at the Speed of Light