Are you set up to successfully compete with experiences?
Innovation and the rapid evolution of data and AI technologies reshape how we engage and consume digital products and services and what we expect from them. This development changes not only the products and services but also the strategies required to successfully compete in the marketplace.
It’s no longer just about delivering great products and services but providing the most compelling experiences.
In this article, we explore some of the complexities of experiences and the importance of a product management capability to create and deliver them. The journey begins with a fundamental question you should contemplate before spending energy and resources on change programs:
What is your strategy to gain competitive advantage?
As with every good and powerful question, it should be hard to answer beyond a simple yes, no, or “it depends”. Let’s break it down to make it easier to answer.
In a competitive marketplace, success comes in two forms: managed and controlled activities or uncontrollable events. Uncontrollable events are what competitors and other external actors do in (or to) the marketplace. Here, we’ll dive into the actions business leaders can take to be organized for becoming and staying competitive.
Competing in the Experience Economy
In 1998, Joseph Pine and James Gilmore, both business professors, published their seminal work on “The Experience Economy,” where they boldly claimed that “… the concept of selling experiences is spreading beyond theaters and theme parks”.
They advocated for organizations to take inspiration from Disney, and other companies in the entertainment industry, to differentiate themselves by crafting unique experiences for customers rather than focusing on product and service delivery alone.
Now, 25 years later, the reality of competing with experiences extends far beyond the entertainment industry, impacting industries like banking, insurance, retail, and education.
The internet and smartphones enabled digital native companies to change how we order services. Customers and employees now expect the experience to be seamless, user-friendly, personalized, ethical, and always available.
Gartner predicts that, by the end of 2024, experience-centric organizations will outperform competitors by 25% in satisfaction metrics for both customers and employees. Looking ahead to 2026, 60% of large enterprises are expected to adopt a total experience strategy to transform their business models.
Experiences rely on a customer-centric organization
Services and experiences differ from physical goods in their subjective nature and are dependent on individual preferences, emotions, and previous experiences. Compelling experiences are a combination of pragmatic and hedonic qualities. In plain English, they need to be functional, and emotionally fulfilling to “do the job”.
Emotions greatly affect our decisions, and even how we remember our experiences. To consistently provide compelling experiences, you must manage and, where possible, measure every individual’s perspective every time they interact with the solutions you provide.
In addition to cost-effectiveness, common quality attributes of competitive experiences are relevance, attractiveness, and consistency. And all must be provided in an ethical and sustainable way.
Evaluating your experiences
Organizational structure plays a vital role in delivering compelling experiences: an organization structured according to value streams, customer journeys, or services will have an advantage to deliver compelling experiences. Working in a departmentally or functionally structured organization with multiple handovers makes customer focus and feedback nearly impossible. But even more important than the organizational shape is how the work is managed.
Product management instead of project management
It’s a challenging task for any organization to deliver experiences that are:
Relevant
• Functionally and emotionally compelling
• Differentiated from competitors offering
Consistent
• Seamlessly delivered end to end
• Available and accessible across different technical platforms
Attractive
• Personalized and appealing
• Responsive and user friendly
Ethical
• Environmentally sustainable
• Inclusive and socially considerate
And, of course, it’s not easy to deliver them at scale while remaining profitable over time and adapting to new trends, new technologies, and the competition. Managing the uncertainty and complexity of providing experiences is where projects and project management are no longer effective practices.
Project management as a discipline is well-known and well-researched, and it has been the go-to format for managing since the days of Henry Ford 1 and his assembly lines. Project management was created for plannable one-time events like building bridges and setting up assembly lines for mass production of goods.
1 Henry Gantt, the creator of the Gantt chart, was an assistant to Frederick Taylor and his school of scientific management in the 1910s. Henry Ford introduced the assembly line after the theory of management Taylorism.
The lifecycles of digital solutions providing experiences are very different from assembly lines. In our time, the speed, flexibility, and ingenuity needed to continually provide experiences, make work less predictable, less certain, and a whole lot less controllable. And for the most part, work is knowledge-intensive rather than capital-intensive. Practicing product management based on uncertainty and discovery is essential to compete in the experience economy.
Cases in point
To give some color to the challenges described above, we are sharing three real-world challenges from the fall of 2023:
1. Seamless user experience
A mid-sized services company provides a range of services to clients in the real estate industry – namely, a SaaS solution for estate agents, landlords, and creditors to manage their businesses. The strategy has been to acquire several smaller technology companies with innovative point solutions to offer their existing and newly acquired customers a full range of services.
The most common reason for customers to leave for the competitors’ platforms is that although all services are offered through one supplier and one user account, data is not shared between the applications and updates are not immediately visible to the users.
2. Omni channel experience
A retail chain with 300+ department stores and an e-commerce solution for online purchases. For the best customer experience, online shoppers can select to have goods shipped or picked up in-store.
The major challenge is displaying accurate availability online as the store inventory and online inventory systems are not linked up in real time. The online shopping experience, especially at major sales events, is that items in the basket are not available at checkout.
3. Employee onboarding experience
A care group with 10,000 beds across more than 100 care homes constantly needs to hire staff. The hiring efforts play a major role in the quality of care and the cost of operations. The effect of recruiters’ effort and incentives to find available candidates is that many new starters are unprepared and start with little information about the work. This results in many new hires leaving within the first three months of their employment.
People, processes, and technology
To provide compelling, competitive experiences with a customer-aligned organization practicing product management (instead of project management), start by considering these approaches for people, processes, and technology.
People
Success starts and ends with people and the skills and attitudes they bring to work. More specifically, to develop and deliver great experiences, being customer-focused, flexible, and data-driven are key traits for a resilient workforce. Teamwork and collaboration to reach common goals become more important than individual performance targets.
Skillsets that span multiple disciplines are more suitable for teamwork and for reaching common goals. Talent with the ability to acquire new skills and adapt to new technologies is more valuable than deep technical knowledge.
Leaders coping with uncertainty and comfortable with experimentation are better suited than those relying on command and control for managing people.
Processes
Operating models must be set up to provide feedback and data from customer experiences effectively. Therefore, processes based on lean thinking, where the core value streams are the activities that serve end customers are more efficient than a network of dependent subprocesses.
Performance of supporting processes and functions, such as back-office and supply chain should be evaluated against how they contribute to the core value streams. Or at least not goals and targets that are not covered by feedback from customers.
For decision processes (e.g., portfolio management), policies that favor many small bets and incremental delivery over big one-time investments provide more flexibility and speed.
Technology
Align technology strategy, technology selection, and solution architectures with business goals. They must support the evolution of experiences at the speed, extent, and flexibility of the lifecycle of the solution(s) that the experiences are provided on.
Leveraging cloud infrastructure and DevOps practices is a good starting point for flexibility, scalability, and security. Learn and adapt based on insights, using data analytics platforms for monitoring, analysis, and traceability of user activities.
Other technologies that facilitate differentiation and improvement of experiences include design systems, pre-built AI, and low-code automation platforms.
In summary
In the modern economy, success lies in delivering experiences that fulfill both the functional and emotional needs of customers and employees. As you navigate the Experience Economy, reflect on how your business is positioned to compete. Is your business set up to successfully compete with experiences?
Competing with experiences demands a commitment to being supremely customer-focused on every individual. Achieving true customer alignment calls for the adoption of product management thinking and practices. It’s a transformative shift in the way we think about and manage people, processes, and technologies.
At Emergn, we have a rich history of helping clients improve the way they work and delivering compelling experiences. If you found this article insightful and want to dive deeper into our capabilities or the shift from project management to product management, visit our Insights page for fresh perspectives!
Discover more about productivity and knowledge work, explore The Culture dimension to AI productivity, learn how to Not confuse tools with technologies, and download our thought paper Moving from projects to products.
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