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3Pillar Global 2023 Predictions: 3 Trends That Will Dominate Product Development in 2023

vmblog-predictions-2023 

Industry executives and experts share their predictions for 2023.  Read them in this 15th annual VMblog.com series exclusive.

3 Trends That Will Dominate Product Development in 2023

By Scott Varho, Chief Evangelist and SVP, Global Head of Craft and Communities at 3Pillar Global

If 2020 is the year that accelerated digital transformation, 2022 is the one that challenged it. Businesses struggled with workforce disruption, inflation and an economic downturn. Many companies pumped the brakes on spending, halting product development and putting customer experience programs on the chopping block.

In 2023, the companies that continue to build for growth and invest in digital, even during a recession, will survive. Over the next decade, 70% of value in the economy will come from digital products and business models. More immediately, in the next few years, 56% of companies anticipate most of their revenue to come from digital channels.

There are strategic considerations to be made while building, though. In 2023, successful product development will involve companies considering value over novelty, prioritizing digital customer experiences and focusing on performance instead of productivity.

1.   Companies that Understand The Power of Innovation Over Invention Will Be More Competitive 

The companies that will thrive in the next wave of the digital economy won't be the ones clamoring over the shiniest new technologies, such as artificial intelligence (AI), crypto or Web3. New inventions capture our attention, but innovation is doing something in a new way that generates value. Using something that's been around for a while can be more innovative than using something that has just been invented.

For example, instead of using an invention such as machine learning (ML) to make product recommendations, using a decision tree in a new way can be more than sufficient to drive product recommendations. Plus, it's more cost-effective and quicker to build and far less costly to maintain or troubleshoot. It can pay off to focus more on value-generating products than inventive technology.

Organizations that will thrive in 2023 won't build technology for technology's sake. They will assess their target market(s) to determine the why behind the technology, test their hypotheses in a low fidelity, lean way and ultimately understand where the value lies.

Relatedly, knowing your customers and users (in B2B, they are different cohorts) better than the competition is an enduring competitive advantage and, in most cases, will outperform a technical advantage. If the definition of innovation is to do something different that generates value, then advances in behavioral insights will become increasingly critical next year and beyond.

2.   Prioritizing Digital Customer Experiences Will Be Crucial to Business Success 

As the world becomes increasingly digital, businesses should prioritize digital customer experiences, including experiences that have been traditionally out of reach for digital. Customers are no longer differentiating between digital and offline satisfaction with your brand. The pandemic accelerated this trend - it did not create it.

A clear and prevalent example of this is in the restaurant industry. QR codes were considered dead before the pandemic, and are now on most tables. This trend has drastically increased the number of people who know how to use QR codes. At the same time, the latest smartphones now have QR readers built into their cameras (you used to need a separate app to read QR codes).

The leaders in what follows will be those that seize the increasing comfort level customers have with digital channels, even in experiences that have been traditionally out of reach. This blending of the digital and offline worlds will undoubtedly continue. The winners in 2023 will seek to provide integrated experiences superior to either all-digital or all-offline.

3.   Productivity will Continue to Overshadow Performance 

Sadly, most product teams will remain stuck in a regime that cares more about productivity than the performance of their products. This trend is rampant and often seen by management as a way to enforce accountability and execution of strategy. The problem with this is that some of the biggest innovations I've been a part of came from engineers who courageously stopped work and pointed out that there's a pattern or technology that could help us get better results.

These moments had a far greater and lasting impact on results than if that engineer had kept their head down and finished their tickets. Teams that are told "velocity" is the most important metric will naturally favor getting work done over either doing work better or challenging how the work fits into accomplishing the goals of the product.

Neither piles of tickets nor lines of code make a product. Yes, we break down our work into tickets to make it digestible, but we should always keep sight of the mission to deliver value in the short, medium and long terms. We should be willing to take a hit on productivity if it means we are obsessed with performance and constantly thinking at the macro and micro levels about how to deliver greater value.

As we head into a new year, the organizations that consider value above all else when building digital products will thrive. That includes creating new value with innovation, engineering value-generating digital experiences and delivering value with high-performing teams.

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ABOUT THE AUTHOR

Scott-Varho 

Scott Varho, Chief Evangelist and SVP, Global Head of Craft and Communities at 3Pillar Global, has spent close to 20 years working in or leading fast-paced delivery teams accountable for building products that support core business objectives. At Pearson Education (a Fortune 500 education services company), he served as Executive Product Manager for Identity and Access Management, serving business units responsible for over $3 billion in annual revenue. As Vice President of Platform for EverFi, Scott led the initiative to merge the K12 and Higher Ed platforms, while simultaneously launching a new business model and accomplishing new levels of scale. Most recently, Scott was tapped by the CEO at Interfolio to organize the product, user experience, and engineering teams. He oversaw the rapid maturation of the team and business culture, a 3x increase in revenue, and played a significant role in the acquisition diligence and integration of the Data180 employees and technology.

Published Thursday, January 19, 2023 7:37 AM by David Marshall
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