Radical Product Thinking

The New Mindset for Innovating Smarter

Radhika Dutt

• Publisher: Berrett-Koehler Publishers
• Year: 2021
• ISBN:
  9781523093335
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Iteration rules product development, but it isn't enough to produce dramatic results. This book champions Radical Product Thinking, a systematic methodology for building visionary, game-changing products. Iteration is highly overrated. It's driven by the belief that if we iterate long enough, we cannot fail to build products that will truly change the world; in reality, iterations are only as visionary as the underlying solutions being tested and refined. Without a clear vision and strategy to drive the ideas you test and improve, products become bloated, fragmented, directionless, and driven by irrelevant metrics. In Radial Product Thinking (RPT), product development is led by the vision for the change it's intended to create. It helps leaders reimagine the problems they face and align their team to find creative solutions using five elements: Vision, Strategy, Prioritization, Execution, and Culture. R. Dutt guides readers through these elements so they develop a clear process for achieving their desired change, incorporate it into daily activities, and turn RPT skills into muscle memory. Dutt also clarifies that readers don't have to be natural-born visionaries to produce extraordinary results.

CHAPTER 1

WHY WE NEED RADICAL PRODUCT THINKING

A vision-driven product begins with a clear picture of the change you want to bring to the world. This vision must then permeate every aspect of the product’s design.

For a great case study on how a vision-driven product is fundamentally different from an iteration-led one, consider the comparison between Tesla’s Model 3 and GM’s Chevy Bolt. Sandy Munro, a well-known automotive expert, shared a detailed comparison of the Model 3 and the Bolt after taking apart the two cars and painstakingly analyzing each component. Munro summarizes his findings in an Autoline After Hours interview, describing the Bolt as a “good car.” But he was far more excited by the Model 3. “Tesla has the best design for electronics, the best harness design, the best driving experience, the best motor.… Everything apart from the skin is brilliant.” His only criticism of the Model 3 was the body—an area where Tesla has admitted to having problems.

Munro gives an example of Tesla’s vision-driven innovation: a smaller, cheaper, and more powerful engine. He says he had heard about the Hall effect in electric motors, which can make the motor 40 percent faster, but had never seen it used in electric vehicle (EV) engines. In his teardown comparisons to date, Tesla was the only carmaker using the Hall effect for its engine. It required Tesla to invent a new manufacturing process to glue together magnets of opposing polarity under high stress. Munro had never seen anything like Tesla’s magnets before and couldn’t figure out how anyone could mass-produce them.

Compare that to his description of the approach GM took to build the Bolt: “GM doesn’t have a lot of money to spend on designing every vehicle from scratch. So they started with a Spark chassis, outsourced the battery, and got a car to market quickly.” GM was iteration-led and found a local maximum in the Bolt.

The difference between how Tesla and GM approached the race to build commercially viable electric cars is evident in the vision behind these two cars. Tesla’s Model 3 was driven by a radical vision of building an affordable car that didn’t require a compromise from the driver to go “green.” When GM designed the Chevy Bolt, it was driven by the vision of beating the Tesla Model 3 to market with an EV that would have a range of more than 200 miles between charges.

Tesla designed the Model 3 as a mechanism to create the change it wanted to bring to the world (accelerating the transition to electric cars by making them more affordable)—that’s Radical Product Thinking. This clear purpose was translated into every aspect of the car. One team designed a more efficient electric motor using the Hall effect; another designed a new magnet with varying polarities; another figured out a process to manufacture this innovative magnet. The connection across these roles and tactical activities is that the teams were all thinking about a radical product, driven by a common vision. As Munro summarized his view on the Model 3, “This car is totally different. This is not inching up. This is revolutionary.”

Thinking radically about a product is often reflected in the organization’s structure. Take the cooling system in the Model 3, a single system that cools the entire car, including the batteries, cabin, and motor. It was designed as a single system to be as efficient as possible. In the Bolt, as in traditional cars, separate systems cool the different areas of the car. As Munro points out, at GM, each of these systems is someone’s domain and fiefdom.¹ While creating a single cooling system has been talked about a lot in Detroit, it would require “crossing over too many lines.” At Tesla, the radical vision transcended organizational boundaries.

GM was able to find local maxima—it got a new model to market quickly, and it was a pretty good car at a lower price point. But Tesla found the global maximum, a breakthrough vehicle that has been outselling the Mercedes C-Class, BMW 3 Series, and Audi A4 combined.²

Tesla used iterations to refine how to get where it was going. Tesla’s first iteration, the Roadster, ran on battery packs made of 6,831 off-the-shelf lithium-ion cells used in laptop batteries. Today Tesla’s Model 3 battery packs contain cells that were developed by the company with Panasonic. Munro views Tesla’s batteries as the best among the EVs—they provide the longest range and fastest charging times while occupying the least space. The company continues to iterate on its product. Tesla has acknowledged issues in manufacturing the Model 3 and continues to improve the design of the body and manufacturing processes.

GM, in contrast, used iterations to define where it was going. By starting with the same chassis as the Spark, even the same layout of the engine in the front, GM was preserving what it knew best (gasoline cars) and guaranteed that the Bolt would be evolutionary but not revolutionary.

“But wait,” you might say, “Tesla had a lead on EVs. Given more time (and iterations), wouldn’t GM have found the same global maximum that Tesla found?” Fortunately, we can use historical evidence to answer this question: coming up with a visionary solution wasn’t a matter of iterating for long enough. It turns out GM had launched its first electric vehicle, the EV1, in 1996, well before Tesla was conceived.

GM leased the EV1 as a market test to customers in California, who loved the product. In fact, when GM wanted to shut down the program, citing liability issues and discontinuation of parts, customers sent checks to GM asking to buy their leased cars at zero risk to the company. GM didn’t even have to commit to servicing the cars—their owners wanted to keep using them regardless! GM returned the checks and chose to shut down the product line because an electric car has fewer moving parts and requires fewer parts to be replaced in the car’s lifetime—the EV1 would have cannibalized GM’s spare parts business.³

While GM had come up with an EV well before Tesla, their iterations weren’t vision-driven and it settled for the local maximum. Ironically, GM’s cancellation of the EV1 program led Elon Musk to start Tesla and eventually build the visionary Model 3.

Despite their shortcomings, local maxima are often tempting because they can help you optimize for your corner of the chessboard. They can help you maximize profitability and business goals in the near term, as GM did by scuttling its EV program.

Since the 1980s the ideology of shareholder primacy, where a company’s primary goal is to maximize shareholder value, has become entrenched in business culture.⁴ Academics argued that managers would best serve companies (and society) by working to maximize shareholder value. Often this means delivering financial results every quarter to meet shareholders’ expectations of profits and growth—you’re incentivized to optimize for just a few pieces on the chessboard.

Startups too have similar incentives for a short-term focus. To demonstrate progress to investors and raise your next round of funding, you need to show quick results in terms of financial metrics or key performance indicators (KPIs), for example, the number of users, revenues, and growth. Irrespective of the size of the organization, the success of a product is typically measured on a single dimension: financial KPI.

The book Lean Startup taught us to innovate faster by testing things in the market, seeing what works, and iterating. But to assess what’s working, we almost always look to financial metrics, typically usage or revenues. Don’t know whether customers want the feature you have in mind? Launch it and let the usage data drive your decision. An iteration-led approach can move financial KPI up and to the right, but it doesn’t guarantee that you’ll build game-changing products. On the chessboard, optimizing for capturing a few pieces doesn’t guarantee that you’ll win the game.

Ironically, I’ve found that the pure pursuit of financial metrics often gets in the way of building successful products. When Lean Startup was published in 2011, it promised to democratize innovation. In a growing economy where credit was plentiful, the movement popularized the phrase “Fail fast, learn fast,” in the tech industry. It emphasized launching a minimum viable product (MVP) to test and refine an offering instead of spending time on an elaborate business plan. The Lean approach is typically paired with Agile, a development methodology for building products incrementally and incorporating feedback throughout the development process. Especially when Lean and Agile are used together, it creates the illusion that you don’t need to start with a clear vision—you could discover your vision along the way.

The problem with discovering your vision along the way is illustrated by the dialog between Alice and the Cheshire Cat in Lewis Carroll’s Alice’s Adventures in Wonderland:

“Would you tell me, please, which way I ought to go from here?”

“That depends a good deal on where you want to get to,” said the Cat.

“I don’t much care where—” said Alice.

“Then it doesn’t matter which way you go,” said the Cat.⁵

In discovering your vision along the way, your product can become a sailboat at sea without a North Star—you go wherever the currents and KPIs take you. As a business leader, you experience many strong forces pushing you in different directions. Your investors may see a trend that you’re not capitalizing on, a board member may share an idea (because he sat next to another CEO on a plane who “knew” just what your company should be doing), and different customers may be asking for different things. Without a clear vision and strategy to drive the ideas you test and iteratively improve, many good products go bad as they meander and lose their way.

To be clear, this is not to dismiss Lean Startup. Lean and Agile are both excellent methodologies that I still use and highly recommend for feedback-driven execution. Lean and Agile give you speed, helping you get to your destination faster. However, they don’t tell you where you need to go.

Over the years, through my work in different industries and types of organizations from startups to government agencies, I’ve found the same pattern of mistakes as we build and scale our products and companies using iteration-led approaches to pursue local maxima. I was sharing my learnings and frustrations about product development with two ex-colleagues, Geordie Kaytes and Nidhi Aggarwal. Though they came from different backgrounds, they echoed my frustrations—both had also learned to build products through trial and error. Kaytes was a UX (user experience) strategist at Fresh Tilled Soil, a design agency in Boston, while Aggarwal had founded QwikLABS (acquired by Google) and was later the COO at Tamr, a machine learning startup. Among the three of us, we had built innumerable products over the years, and we saw the need for a methodical approach for building successful, vision-driven products. We realized that we must look at products differently.

We found that without a methodology to do this, organizations commonly use Lean and Agile execution to fill the gap. Using these methodologies while measuring success on the single dimension of financial metrics made it easier to find the local maxima but miss out on the global maximum. We cataloged the most common barriers that have repeatedly gotten in the way of building great products as a result of this approach. We spoke with people in diverse functions, industries, and countries who all faced similar problems.

We began to call these barriers diseases because they are contagious, damaging, and difficult to cure. These diseases are common because it’s easy to make mistakes at every step of product development.

We worked on translating what we had learned the hard way into a systematic process that anyone could apply. We drew insights from large and small businesses, nonprofits, and governments, and we organized them into a clear, repeatable process. We then tested and refined this process by working with individuals and teams in a range of organizations around the world, including early-stage high-tech startups, companies offering professional services, social enterprises, nonprofits, and research organizations. The result is what we call Radical Product Thinking.

The word radical can sound overwhelming, but the Oxford English Dictionary defines it as “relating to or affecting the fundamental nature of something (especially of change or action); far-reaching or thorough.”⁶ Radical in reference to medical treatment means thorough and intended to be completely curative.

Radical Product Thinking means being inspired by a change you want to bring to the world and thinking about your product comprehensively as a mechanism for creating that change. We’ve designed our Radical Product Tool Kit as a clear, repeatable methodology for creating game-changing products—step by step from envisioning a change to translating your vision into daily activities to delivering a final product. RPT will also give your team a shared language that makes communication easier and helps you bring others on your journey.

Here are the three pillars of the RPT philosophy:

1. Think of your product as your mechanism for creating change: The change you are working to bring to the world isn’t necessarily through a high-tech product. It could be through the work of your nonprofit, the research you’re conducting, or the freelance services you’re offering. Any of these could be your product if it’s your mechanism to bring change. Consequently, you can apply the RPT approach to any product you’re building to create change more effectively.

2. Envision the change you want to bring to the world before engineering your product: A product does not justify itself—it exists only to create your desired change and is successful only if it helps you achieve the end state you pictured. You can build the right product and evaluate it only if you know the impact you want to have. Without knowing the desired impact, it’s difficult to recognize and address the unintended consequences your product may have.

3. Create change by connecting your vision to your day-to-day activities: A focus on execution feels satisfying—it feels like being on a galloping horse (even if it’s galloping in the wrong direction). The RPT approach helps you connect your vision for change to your day-to-day activities so you can engineer that change systematically.

Table 1 presents a summary of the fundamental differences between an iteration-led approach and the RP...