Tuesday, November 27, 2018

The "whole product" is more relevant than ever

You simply must tip your hat to Geoffrey Moore and others who created the concept of the "whole product".  I've written about this concept several times, and I raise it again because the underlying ideas are about to become really important in innovation circles.  If you haven't read Crossing the Chasm or aren't quite familiar with what a "whole product" is, then it may make sense to go and read up.  When you are done, come back and let's continue the conversation about why whole products are about to become a lot more interesting.

Whole product (1.0)

When Moore and others conceived of the original "whole product", they were making a point about the differences between technology (which many inventors, entrepreneurs and early adopters find interesting) and "whole products" - adding features, capabilities, instruction manuals, user hot-lines and other features and services around a core technology to make the eventual solution more useful and valuable for people who aren't early adopters.  It turns out that most of the market prefers well-conceived and fully developed solutions rather than core technologies.  If that sounds surprising to you, you are probably a tech enthusiast or an entrepreneur in an emerging technology, and about to get a rude awakening when your technology doesn't sell as you expect it to.

Moore's point was that the vast majority of customers wanted more than the technology, they wanted additional capabilities that expand beyond the core generic product to an "expected" product and onward to a "whole product".  When the technology is finally wrapped in the additional features, services, offerings and data that make up a "whole product" then the vast majority of the market is willing to acquire.

Moore went on to say that features that were in the expected, whole or ideal product always migrate into the core product.  For example, seat belts.  Years ago seat belts were a feature, then become standard equipment, then became almost an afterthought as more and more safety devices were added.  Today, cars are designed with a vast array of safety devices that were almost unimaginable to manufacturers even 20-30 years ago.  Safety has become a component of the core product.

Whole Product (2.0)

The reason that whole product is becoming even more interesting is that the notion of product is expanding and many companies will soon be shifting to innovation "beyond the product".  The very nature of product offerings is changing rapidly, as Uber and other asset-less companies demonstrate.  As Software as a Service and other "as a service" models demonstrate, increasingly there isn't a "product" per se, but a number of services wrapped up as a product offering.  Thus, service innovation, business model innovation, channel innovation are becoming more important, and the definition of a "whole product" - what the vast majority of customers want to acquire - is rapidly expanding.  In fact the whole nomenclature may be wrong - it may be that we should be calling this the "whole solution" to move away from "product" nomenclature.  Somewhere in the offering there may be tangible products, but increasingly the services, business models, data, platforms and even ecosystems will be what draw customers to a solution.

Impacts on Innovation

This is, and will, have a huge impact on innovation.  First, product innovation is almost passe.  That's not to say we won't continue to innovate products - we will - but increasingly many innovations will happen "beyond the product" or to augment the tangible product. In fact I suspect much of the value of the innovation in the future will be in the augmented services, channels and business models.

Second, while many corporations and consultants are relatively good at incremental product innovation, there's far less experience around innovation outside of tangible products.  If you thought disruptive innovation around a tangible product was challenging, wait until you try to imagine the services, experiences and business models that must be provided to attract customers in the future. 

Third, the expansion of innovation beyond the product means that innovation change will be more dramatic, more sweeping.  Companies will need greater cross-functional participation in innovation because so many different components of their capabilities will be required, from channels to distribution to marketing to product management, and even finance.  This doesn't necessarily make innovation more difficult, just demands more strategic direction and more collaboration.

Fourth, this means that future innovation activity will need to be much more customer-centered, less technology centered and much more integrative.  As innovators we need to think about the second and third level needs and expectations of customers, well beyond the core product.  This will lead to thinking about how and where the product is acquired, used, supported, connected to the Internet or other data exchange systems, how the acquisition or use is funded and many other concepts that are either ignored or outsourced to third parties today.

What's your new "whole product" definition?  What do your customers need in order to acquire the newer intangible services you'll offer?  Do you have the skills to conceive, design and implement around the innovation beyond the product requirements?
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posted by Jeffrey Phillips at 7:13 AM


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