The Importance of Outside-In Thinking on Product Businesses
With the rapid pace of changing technology and a growing list of consumer-centric competition, it's no wonder that many businesses are struggling with new product development. From long, expensive processes to mundane results - there always seems to be something holding back a company’s growth potential. Often a contributor to lack of growth is an inward focus on product development aka “inside-out” thinking. Inside-out thinking means that the focus of a company is mainly on their internal processes, systems and tools. The inside-out thinking that most companies employ is often the default way of doing things and it has a detrimental effect on business outcomes. There isn't any consideration given towards what customers need or how they view things, which can lead to negative outcomes such as the following:
- You invest too much time and money into projects that don't actually make sense for your customers;
- The return on those investments isn’t worth what was spent in terms of the cost invested versus potential profit (or loss);
- The decision-making process becomes ad hoc, with little or no reasoning behind the “why”.
This “inside-out” way of thinking and operating has led to many issues like these, and as a result we see it as an approach that is detrimental, provides short-term value at best and can have consequences that are serious enough to spark change in thinking. This much needed change in thinking is called “outside-in” thinking.
2 Facets of Outside-in Thinking
Outside-in thinking can be viewed in 2 areas.
- External - The first is external to an organization; Getting outside (literally) by conducting user-centric processes that give qualitative insights about how consumers use your product.
- Internal - The second is internal to an organization; Getting outside our own heads and limitations by working together cross-functionally within our companies, gaining fresh perspective and a more holistic understanding of our offerings.
1.) External Outside-In Thinking
By tapping into the insights of your customer, you can learn more about what they need and how they use your products or services, allowing you to iterate and tailor your offerings accordingly.
Getting out of the building
“Getting out of the building" (GOOB) means to ship your product as fast and early as possible to your customers, in order to collect feedback from them. This feedback can be in the form of customer interviews, surveys, or even just casual conversations. The important thing is that you're getting out there and talking to people.
GOOB is important for product businesses because it allows them to validate their hypotheses and assumptions about their product. By talking to potential customers and getting feedback, they can adjust their product accordingly.
Additionally, GOOB helps businesses understand their customers’ needs and wants. This is valuable information that can help businesses create an objectively better product or service. By understanding their customers, businesses can create a product that meets their needs and solves their problems.
By thinking from the outside in, we can start to build strategy around the customer’s wants and needs and grow our businesses in ways that align these needs with business KSIs. We can do this by capturing and analyzing qualitative data.
What is qualitative data? Qualitative data is information that can’t be expressed in numbers. This data can help you understand the “why” behind the numbers. For example, if you see in your quantitative data that users are abandoning your product at a certain point in the purchase process, you can use qualitative data to understand why that is happening. Are users getting confused? Do they not understand the product? Are they having trouble at checkout? By understanding the "why" behind the user behavior, you can make changes to your product that will decrease the abandonment rate and increase engagement.
Used in conjunction with quantitative data it can give you much more insight and direction in what product features should be made and unmask long term growth strategies. It can be gathered through methods such as user interviews or journey mapping.
User interviews are a great way to get an in-depth understanding of how users feel about your product or service. You can use user interviews to understand their needs, wants, and pain points. This feedback can then be used to improve your product or service.
User journey mapping is another excellent way to get insights into the user experience. This involves mapping out the steps a user takes when they interact with your product or service. This can help you identify areas where there is room for improvement.
2.) Internal Outside-In Thinking
Stop Working In Silos
The second way to practice outside in thinking is by working alongside people who are outside of your own department or area of expertise. By doing this, you can gain fresh insights that may not have been possible with just internal collaboration alone. Whether it's through cross-departmental brainstorming sessions or collaborating with individuals from different educational backgrounds, outside in thinking has the power to spark new ideas and drive growth within any organization.
Thinking and working in silos can have negative consequences on businesses, especially product businesses. When people inside a company think and work in silos, it means they are only focused on their own narrow area of expertise and are not considering the big picture or how their work affects other people or departments within the company. This can lead to communication breakdowns, missed opportunities for growth, and even conflict between employees.
Silos can also prevent companies from being able to innovate or take advantage of new opportunities because people are too busy protecting their own turf instead of working together towards a common goal. And finally, when customers or clients see that a company is siloed, it can damage their perception of the company and make them less likely to do business with them
Taking an outside-in approach to product development will ensure that you’re constantly considering your customer’s needs and wants when creating new products. This way, you won’t waste valuable time and money developing something that they may not even want or need. Instead, by involving customers, and welcoming new perspectives in the product development process, you can create a product that they will love and actually use!
So if you want to grow and succeed in the ever-changing business landscape, don't be afraid to step outside the boundaries of your organization – both literally and figuratively.