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Book summaries
  • Pages
    • Index
      • Radical product thinking
        • Introduction. A Repeatable Model for Building World-Changing Products
        • Part I. Innovating Smarter Requires a New Mindset
          • Chapter 1. Why we Need Radical Product Thinking
          • Chapter 2. Product diseases
        • Part II. The five elements of radical product thinking
          • Chapter 3. Vision
          • Chapter 4. Strategy
          • Chapter 5. Prioritization
          • Chapter 6. Execution and measurement
          • Chapter 7. Culture
        • Part III. Making our world a little more like the one we want to live in
          • Chapter 8. Digital pollution
          • Chapter 9. Ethics
          • Conclusion
      • Escaping the build trap (WIP)
        • Preface
        • Part I. The build trap
          • icon picker
            1. The Value Exchange System
          • 2. Constraints on the value exchange system
          • 3. Projects versus products versus services
          • 4. The product-led organisation
          • 5. What we know and what we don't
      • Strategize (To do)
      • UX strategy (To do)
      • Product roadmaps relaunched (To do)
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1. The Value Exchange System
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1. The Value Exchange System

Fundamentally, companies operate on a value exchange. On one side, customers and users have problems, wants, and needs. On the other side are businesses that create products or services to resolve those problems and to fulfill those wants and needs. The customer realizes value only when these problems are resolved and these wants and needs are fulfilled. Then, and only then, do they provide value back to the business.
Value, from a business perspective, is pretty straightforward. It’s something that can fuel your business: money, data, knowledge capital, or promotion. Every feature you build and any initiative you take as a company should result in some outcome that is tied back to that business value.
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The value exchange realized
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But value can be difficult to measure and to measure well from a customer or user perspective. Products and services are not inherently valuable. It’s what they do for the customer or user that has the value—solving a problem, for example, or fulfilling a desire or need. Doing this repeatedly and reliably is what guides a company to success.
When companies do not understand their customers’ or users’ problems well, they cannot possibly define value for them. Instead of doing the work to learn this information about customers, they create a proxy that is easy to measure. “Value” becomes the quantity of features that are delivered, and, as a result, the number of features shipped becomes the primary metric of success.
These companies then motivate their employees and judge them for success with the same proxies. Developers are rewarded for writing tons of functional code. Designers are rewarded for fine-tuning interactions and creating pixel-perfect designs. Product managers are rewarded for writing long specification documents or, in an Agile world, creating extensive backlogs. The team is rewarded for shipping massive quantities of features. This way of thinking is detrimental yet pervasive.
You have to get to know your customers and users, deeply understanding their needs, to determine which products and services will fulfill needs both from the customer side and the business side. This is how you develop the Value Exchange System. To gain this understanding, companies need to get their employees closer to their customers and users, so that they can learn from then, which means having the right policies throughout the organisation to enable this.
Policies are one example of a constraint that affects this value exchange. This system is constrained by influences on both sides.
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The Value Exchange System
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