Today we are talking to David DeWolf and Jessica Hall, the CEO and VP of Product Strategy at 3Pillar Global. And we discuss topics from their forthcoming book The Product Mindset, changes you can make to function at maximum capacity and why leadership is not a privilege, it’s a responsibility. And listeners of the podcast can get a free copy of the audiobook, read by David and Jessica – just visit productmindset.com/modern-cto!

All of this, right here, right now, on the Modern CTO Podcast!

To get a peek inside “The Product Mindset,” take a look at the excerpt below, lightly edited for clarity and brevity: 

Interested in Innovation? Outcomes, Not Output, is the Name of the Game 

Many business leaders still support a fixed-mindset approach to strategy; they argue that if a company has the right solution, roadmap, or go-to-market plan then it will be successful. But on-the-ground experience tells us something different. In a world that is continuously changing, having the mindset to guide tradeoff decisions and judgment calls is at least as critical as having a solid strategy—and probably more so.

[…]

Admittedly, “mindset” doesn’t feel tangible, it leads to specific results. Imagine two teams, both given the same software product to build. Team A considers itself successful if it completes the job in a certain amount of time, meets the requirements, and follows the budget. Team B pursues the outcome of building a successful product that customers will adopt.

Three weeks into the project, both teams learn that 30 percent of the features they were planning to build are no longer considered important to their customers. Team A dismisses this as unimportant information because it’s basing success on time, scope, and budget. 

Team members decide to deal with it once the project is complete, if their project sponsor wants to extend the project.

Team B accepts the information and sees it as integral to its success. Team members believe it’s a total waste of time to continue building the 30 percent of features that would be useless to their outcome. Instead, they prioritize the 70 percent of features they now know are important to the customer and remove the 30 percent from the roadmap. They will get to the important features faster.

Both teams had the same budget and the same capacity, but Team B’s product is ultimately more useful and drives more significant outcomes. The only difference was their mindset.

[…]

True innovation occurs at the intersection of customer desires and business outcomes. When people need to get around, Lyft steps in. When they need to manage their money, they can turn to Mint. If the basement floods, USAA is there, and for navigating the logistical chaos of family and work, there’s Google Calendar. When a product can create the outcome people are looking for, they’re willing to give it a try. If it delivers, they pay for it, use it, and share it.

Unfortunately, that is not the mindset most companies have. Historically, most teams are rewarded not for outcomes, but for outputs. Imagine a project with thirty-six people working on it. The performance of each team member is evaluated by different criteria. Thirty of them are measured by how much code they create. Two are measured by how well they hit scope and time targets. Three are judged by how much design work they do. Only one is measured by how the project increased member engagement. Who do you think wins when it’s one against thirty-five?

Many clients get stuck on the technology itself; they can’t escape a mindset that focuses on output. By ignoring the outcome, they wind up sabotaging their customer’s ability to choose. One client developed a phenomenal technology that leveraged sensors on phones. Their technology knew whether or not the holder of the phone was a driver or passenger in a car, and how fast the vehicle was going. The company could build interesting and compelling products with such technology, but they were so entrenched in the technology itself that they only built for output. They focused on making the technology better and better, but ignored their customers’ real problems. Had they paid attention to the outcome for the end user, they could have made customers’ lives better and safer in multiple ways.

To make matters worse, this client didn’t focus on business outcomes either. They lasered in on refining their algorithms when they could have been developing products that would drive revenue and adoption. The company had the perfect recipe for success, but because they had the wrong mindset, they couldn’t gain any momentum and ultimately failed.

It’s easy to condemn such decisions in hindsight, of course – but actually having the courage to break with the norm and focus on outcome is incredibly difficult. It’s comforting, on some level, to focus on outputs instead. They are easier to measure. We come away knowing how much code got written or how many mockups were made. We can kick out loads of reports showing how much has been done. We’re in control.

It’s scarier to be held responsible for outcomes for the business, like revenue growth or market share, because you can’t control the buyer’s behavior. Outcome-based goals are harder to measure and achieve – but the reward is far greater. We’re not here to write code. We’re here to build a business and serve customers—and when we do that, the product, not the productivity chart, will make history.

[…]

We gave a name to the approach taken by Team B. It’s what we call “The Product Mindset.” The Product Mindset promotes flexibility. Companies that embrace this mindset may plan some steps, but their approach encourages experimentation as teams work together toward a common goal. By leveraging the Product Mindset, these companies create a culture of smart risk-taking. And that, more than anything else, is the key to successful innovation.

About the Authors

David DeWolf is the founder and CEO of 3Pillar Global, which builds innovative, revenue generating software products, enabling businesses to quickly turn ideas into value. Under DeWolf’s leadership, 3Pillar has grown to more than 900 employees in seven offices across three continents, has been named to the Inc. 5000 list of fastest growing companies in the U.S. eight times and was recognized by research advisory firm Forrester twice in 2018 as a leading digital experience provider and custom software development firm. DeWolf’s work at 3Pillar has been honored by several awards, including The Software Report’s Top 50 Tech Services CEOs, SmartCEO Magazine’s Future 50, Washington DC’s 40 Under 40, and Virginia’s Fantastic 50.

Jessica Hall is Vice President of Product Strategy and Design at 3Pillar Global where she leads teams creating digital products that customers crave and that drive business growth. With wide ranging experience, she’s passionate about helping clients succeed. Previously, Jessica built the UX team at CEB, now Gartner, and led the creation of the Newseum’s interactive exhibits and websites. 

3Pillar Global

3Pillar Global builds breakthrough software products that power digital businesses. 3Pillar is an innovative product development partner whose solutions drive rapid revenue, market share, and customer growth for industry leaders like CARFAX, Fortune, and PBS. Leveraging a lean and agile approach, 3Pillar delivers value-generating, digital solutions with specialized product strategy and management, user experience design, as well as software and data engineering expertise across mobile, cloud, and disruptive technologies. Visit www.3pillarglobal.com for more information and career opportunities.