How to kill a great organisation?:

Follow the linear royal road of product innovation!

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There is no silver bullet in product development. Rather, it is about taking different perspectives into account and finding a common denominator.  

In the last episode Elisabeth Leyser spoke with Klaus-Peter Frahm, founder and managing director of Product Field GbR. His company produces software for product leadership in complex larger organisations and helps create clarity and coherence in innovation work across an entire complex product portfolio.  

Product innovation is directly dependent on the overall state and culture of the company

Opening with a theme from the book Frahm published with colleagues, The Product Field Guide, in which he writes: „The practice and process of innovation are only part of the system in which they take place and highly dependent on its overall state.“ For Frahm, the point is that in complex systems, there is a very different view of innovation and product work depending on the role and perspective, and that instead of linear models, complex, systemic models need to be applied.

Frahm emphasises that there is no silver bullet in product innovation, as every organisation is different. Rather, it is about taking different perspectives into account and finding a common denominator. This is how his model of the product field came about:

„The core of this model is that we say we need a common frame of reference, a frame of reference for product innovation, in which all perspectives can find each other. We need a frame of reference that is knitted in such a way that it can be applied in every kind of complex system, i.e. it is general enough, but can still address the specifics of the perspectives.“

Successful product innovations only succeed in a clearly defined space of understanding

Every product innovation must ultimately involve two things: One is about realising things, bringing something to fruition; the other is about bringing things out, taking something from the inside to the outside. These two movements span the frame of reference of the „product field“: „this creates a space of understanding in which every relevant aspect of product innovations finds its place.

Product innovation (properly designed) can lead to efficient organisational development

In connection with cultural changes in product innovations, Frahm sees the product itself as a vehicle, a crystallisation point, because a value proposition ultimately manifests itself through the product.

„When I do product innovation, I inevitably do organisational development, especially when it happens in the digital space“.

Frahm also emphasises the need for learning loops, especially in the area of digital products. In addition to the willingness to learn, he emphasises the importance of transparency, trust and adherence to principles as central value attitudes for the innovative capacity of companies.

Frahm sees his „Product Fields“ approach as an entrepreneurial fitness check that makes it possible to cast a complex approach into a consistent framework, to consider all perspectives at an early stage, to create a collaborative picture and ultimately to check „whether what we are doing makes sense conceptually“.

We summarise

How to kill a great organization: 

  • Product innovation is primarily about improving existing products – just think of product innovation as a linear process.
  • Leave the responsibility for innovation exclusively in the designated department. Others don’t understand anything about it.
  • Keep your silo organisation as it is – this way it is clear who is responsible for what.
  • Train your innovation team in Scrum and other operational methods – that’s all they need.
  • Our customers know far too little about our business – we develop a product and if it is marketed well, it will be accepted.

A common frame of reference and shared sense making as a success criterion for sustainable business success 

  • A clear and powerful „purpose“ provides direction for new developments and serves as a „touchstone“ for whether you are on the right track – this creates consistency and persuasiveness.
  • Use product innovation as a crystallisation point for the development of your new corporate culture – this keeps the transformation well aligned and meaningful. At the same time, you avoid both oversized (lengthy) processes and superficial „cosmetics“.
  • True innovation succeeds when different perspectives are intentionally brought together – it is about shared „sense making“.
  • Product innovation makes new demands on your organisation – so consider the system inside and outside and create learning opportunities.
  • Product innovation needs the „learning organisation“ as a basis and the „learning organisation“ needs above all trust, transparency and adherence to principles.

The full length interview:

This text was translated by a machine and clearly shows that we still have a long way to go before we are in danger of being rendered obsolete by A.I..

Elisabeth Leyser: Welcome to the next episode of the podcast series „How to Kill a Great Company?““. Our MetaShift transformation podcast looks at what long-term success of companies means. What determines whether a company stays in the market for a long time or has to exit earlier than necessary? We hear from experienced managers, experts and scientists what they think is particularly important in this context. We are interested in sustainable corporate success and how to find out what causes it. Klaus Peter Frahm is our guest today. Klaus-Peter is called KP and has been dealing with the topic of innovation for many years. In the meantime, he has his own company and has developed the corresponding software with The Product Field. It is about a very holistic approach to product innovation. Welcome. Klaus Peter, would you briefly introduce yourself?

Klaus-Peter Frahm: Yes. Hello Elisabeth, thank you very much for inviting me. I’m very happy to do so. So, you’ve already started a bit. I am Klaus Peter Frahm, founder and managing director of Product Field Works GmbH. What we do: We make software for product leadership, especially in complex larger organisations. We help them to create clarity and coherence in their innovation work and also, so to speak, across an entire complex product portfolio, which is not always easy. And that is what we do with our company. And before I did that, in 2020, in the middle of the lockdown, I was in the corporate context for 25 years, in very different roles and functions and positions. And actually always, always at the interface or always with a view to product development. And that was quite interesting for me when, at some point in mid-career, I looked at what the constant or the point of reference was and realised that no matter in which position, no matter in which department I worked, it was always the product that mattered. Always the value proposition to the customer, which was in some way the focus of my work. And that’s where the whole development came from, that we developed the product field and then founded this software company.

Elisabeth Leyser: It sounds like you have found what you are really interested in. Of course I looked at your book in preparation. And there is one sentence that particularly fascinated me. You write, „The practice and process of innovation are only part of the system in which they take place and highly dependent on its overall state.“ I would of course subscribe to that 100%. I am very much involved in transformation processes and I experience this there in the same way, that it is about learning to look at the whole. But of course there is a great tension between this complexity and then the focus on really creating a new product. And now I’m interested: How did you, with your background of experience, actually come to a very similar insight?

Klaus-Peter Frahm: Yes, it actually also has to do with what I already said, that I have worked in very different roles and positions, in complex organisations and have found that no matter, or depending on, the role and perspective, a very different, indeed a very different view of this innovation work became possible. And I have seen: Okay, it seems that it is not such a simple linear story, where I somehow go from A to Z with certain participants from – I have an idea and then I deliver that to the customer – that that is not the picture, but that there are always, at all times different perspectives on that, on the innovation work, on the product work. And if that is the case, then it seems that we are dealing with a complex model rather than a linear model, a systemic model. And in addition, of course, all the people who contribute in some way to the innovation work, to the product development, are of course also part of the system and are also informed by the work. Many small feedback loops in the organisation, so to speak, that either advance or hinder product development. And that is already one of them. It’s just actually due to the fact that I’ve been in such insanely different roles. I think if I had only ever taken on one role from the beginning, I might not even have noticed. Then I would have always said: OK, this is this one perspective and this is how it works. And if it doesn’t work out, then it’s the others‘ fault. Something like that. That would probably have been my point of view, but that’s how it was. The bottom line is that at some point you have to come to this realisation.

Elisabeth Leyser: And now I think to myself that this realisation is of course the beginning of something new. I suppose? But it is not a solution on its own. So it is important to recognise that something is very complex and also interdependent. But dealing with it is something else again. And now I have the impression that you have developed your point of view further and that it has changed a lot in the course of your work. And now the question is: What are you doing now so that product innovations really bring the results that are needed? What do you do differently or what do you do differently?

Klaus-Peter Frahm: Yes, that’s a good question, because of course it’s not so easy to understand – somehow something is going wrong here – to yes, how should it go right? And I give a sentence like that. The first sentence in our book is: There is no silver bullet. It’s not like that: Hey, if I had that, then Silverbullet, then I would market that somehow and then every company would innovate successfully. But the realisation was: well, there is no silver bullet, because every system, every organisation is different. And now the question was: What is the minimum or common denominator, so to speak, when we think about products, when we talk about products, when we develop products from different perspectives? And then we thought about that relatively intensively. About ten years ago was the second time my co-authors and I did that. And that’s when exactly the model of the product field emerged, so to speak. And the core of this model is that we say we need a common frame of reference, a frame of reference for product innovations, in which all perspectives can be found.

Klaus-Peter Frahm: That means that, just as there are these points of the compass, I have to put something in the middle where all people can orientate themselves. Where is my contribution, what is my role? Where is my perspective when it comes to developing a new product or even further developing an existing one? That is the quintessence, so to speak. We need a frame of reference that is knitted in such a way that it can be applied in any kind of complex system, that is, it is, so to speak, general enough, but can still address the specifics of the perspectives. And that’s what we actually developed as a hypothesis. And because it works so well, we made a book out of it and since then it actually works quite well that the organisations that use this product Field, so to speak, look at product innovations collectively and holistically and understand it as a system. That they have quite good, quite good progress, because they don’t fall into the trap of wanting to linearise something or make top-down decisions when the reality is actually quite different.

Elisabeth Leyser: Could you perhaps describe in a few words what this frame of reference entails? You said that it is about the same factors that are present in all organisations.

Klaus-Peter Frahm: Exactly, so all organisations. But also at all altitudes you can actually establish two things. And basically, this is not something we have developed, but we have looked at what product innovation actually means. We have read a lot of literature and developed a lot of our own thoughts. And if you superimpose all these definitions that exist, you arrive at a very canonical definition of product innovation. It goes like this: every product or product innovation must ultimately involve two things. One is about realising things and the other is about bringing out thinking. I have to realise something, bring it from the abstract to the concrete, and I have to bring something from the inside to the outside. And these two movements, they subavenge each other. They are, so to speak, they have to happen simultaneously. Otherwise it’s not a product innovation or otherwise it’s not a product that produces outside on the market. And that’s a very simple way of describing what happens when I do product innovation. And what we have done is, we have stretched these two movements as axes of a coordinate system and this creates a space of understanding in which every relevant aspect of product innovation finds its place. And in this space, that is, so to speak, the location of the relevant aspects along these two axes, that is the frame of reference and we have called it the product field.

Elisabeth Leyser: Okay, that means you have actually developed a visual, an optical equivalent, where you can locate things, inside and where you can actually start to talk about such aspects. They are not usually on the surface.

Klaus-Peter Frahm: Exactly. Exactly. It is very important to record this. Because it’s no use having a theoretical model and somehow handing people books. You have to make it negotiable, you have to bring it to the surface somehow. This means that it would not be possible to talk about certain aspects with a facilitator or without a facilitator and say, „Okay, where is this aspect located? Okay, where is this aspect located, what are we talking about? Are we talking about something that is rather abstract or something concrete? Are we talking about something that is close to the product or something further away. That’s just one of those semantic aids. Or I would say semantic help in creating a shared understanding of a product innovation.

Elisabeth Leyser: I see. Now, when I imagine or interpret what I have heard, it is not only about this regulation, but also about the fact that a joint development probably has to take place in an iterative process. As you said at the beginning. It is not the case that the individual aspects remain rigid, but that on the one hand they are mutually dependent and on the other hand they also develop independently of each other and that this must remain connected or be brought together. And now I imagine that this is quite challenging, because when I think of many organisations that are rather fragmented or set up in silos, then this naturally creates a huge pressure to change. That actually requires a different culture of cooperation, a different way of dealing with people. What are your experiences?

Klaus-Peter Frahm: Yes, that is an interesting aspect, because of course it is also about culture. Um, I always try to avoid the concept of culture in my work. Simply because it often triggers two things. One is that when I talk about culture and the promotion of culture, many people think that something has to change fundamentally, that it’s very costly. And it is a very, very, very long way, so to speak, until I arrive somewhere where I would like to be when I change my culture. That is then the fundamental model or on another spectrum. It’s just the lightweight model, where I do cultural work on the surface, that I put up ping-pong tables and hand out bread and fruit baskets. And these are two things that simply don’t work very well in their extremes, because one takes a really long time and has no connection to operational reality and the other is only superficial. That’s why I try, because that’s always such a trap, I don’t even go there, but I say, we have to somehow work together, we have to find a common denominator. And when we have found this common denominator, and that is the value proposition manifested by the product, when we have done that, then we can talk about the product. And while we are talking about the product, we are also talking about requirements for our own organisation, how we are able to develop this value proposition, this product. In other words, I’m trying to get away from just this, this rather softer – well, of course culture is not soft at all, but I mean from these terms where many people are afraid of getting into something so very concrete and say, okay, we’re talking about the product here.

Klaus-Peter Frahm: And especially for managers who come from the old school, who say these tough guys and so on, of course they also want to talk about product and outcomes and results and and turnover and so on. And of course it helps when I say that I really use the product as a vehicle, as a crystallisation point. Along this element we can have discussions together that are valuable for everyone. They are valuable in the direction of customers, but also in the direction of: How do we actually change ourselves? Do we need to change our organisation so that we are able to bring valuable products to the outside world? That is actually the approach. And if you have to think of it in practical terms, it’s not somehow: we do a workshop and everyone is happy, but it’s already a continuous consideration. As you say, things change and the relationships between them change. Goals can change, customer needs change. Especially when I’m in a digital space, when I’m building products, digital products, it happens very quickly the moment I release them that I get user feedback and so of course I have to deal with that. That means I have to keep checking, are we still on the right track here? Is the context that we described together earlier still correct? Do we perhaps have new findings that somehow shake up the entire system around product development, that pose a risk? That is also work. But the work becomes tangible because people know that they can do something with the product and with the roles and aspects that are at work.

Elisabeth Leyser: Yes, I can understand that very well. This is very much in line with my experience, where we always try to create the framework for a change through a very concrete question that is directly relevant to the business and then take that as the starting point. And I believe that a lot is also connected to the fact that it succeeds. As I understood you, bringing together the different views from the different, inevitably different perspectives and realities and also shaping this process in the course of the change in development, I understand.

Klaus-Peter Frahm: Yes, in that sense, that is how I would summarise it. And it is very important to say how we, how we speak of a framework. When we talk about the product field, we are actually talking about a sense making framework, that is, the process of sense making, the process of jointly creating shared understanding and not so much about operational frameworks like Scrum or Designers or something like that. That’s very important to keep apart. It’s really about creating more of a, like a superordinate – around meta, yes meta shift – superordinate a level where exactly this sense making takes place. That is important.

Elisabeth Leyser: Yes, well, in the context, because you mentioned Scrum as an example, I think that these things only work well from my experience if this meta-level is given or the framework is created, because you know why am I doing this? Where is it going? What do we want to achieve with it? In my view, these things are very important so that people are happy to embark on the path of change.

Klaus-Peter Frahm: Exactly.

Elisabeth Leyser: I found something else in your documents in your statements that interested me very much. It was about the topic. A successful product is successful when it is coherent and consistent with the overall picture. That is what an organisation gives. That is, eventually you will probably really be confronted with this. How does the company look to the outside world? What is a strategic objective for the next few years, but also the cultural aspects already discussed? Ultimately, I suppose, how is the company managed? So all these things that ultimately lead to consistency being possible in a larger organisation. Do you also see these as essential factors for really succeeding in what you set out to do in connection with product innovations?

Klaus-Peter Frahm: Absolutely. Yes, so I do. There are a few things that have been out there for a long time. The ones that have also inspired our work. One is Donship The Orchard. You know that one. So, what I have out there in terms of products shouldn’t necessarily correspond to the complexity in terms of organisation, because the customers can’t cope with it anymore. Whereby it has to be said that actually every product outside corresponds to the Orga. That means I just have to make sure that my Orchard is used in a simple way. One thing and another is a bit like this: Form follows function. So this is a guiding design principle and these two things have a lot to do with each other and I think it’s really important to focus on this, because when I say form follows function, then I actually have to assume that the function that I want to be or provide in the world with my product or my organisation. Of course, I have to transfer that into the form at some point. So the form must follow the function, so to speak, and the form must follow the production of this function, so to speak, and I think that is very important to make this clear again and again, because we believe that the product, if I don’t make product innovations, I inevitably also make organisational development, especially when it happens in the digital space, when the feedback loop is so fast.

Klaus-Peter Frahm: That means that the moment I recognise something outside in the market during product discovery and don’t want to react to it in some way, I have to change something inside so that I am able to create this value proposition. For example, by accelerating my learning cycles. Or that I somehow determine – I don’t know – that I need more designers to be able to do that at all or whatever. I have to change something in the organisation in order to successfully get products out there. And I think that’s a very exciting moment, when you realise that it’s not a question of I have to develop an organisation and then I make better product development and I don’t somehow make better product development and then the organisation results, but it’s a field of tension, an inherent cycle, so to speak, that both take place at the same time, that it I don’t know if it answered this question like that, but that’s what I immediately thought.

Elisabeth Leyser: Yes, I think that is also very important. So, what I wanted to summarise in this context is: external impulses have an effect on the organisation within. And at the same time, this organisation must remain in motion and actually responsive. In other words, it has to respond to what comes from outside and develop further. On the other hand, of course, the outside also continues to develop and in this respect it remains a permanent process. That means it’s about a learning loop, I would now interpret it beyond the boundaries of the company. Hm. Correct, isn’t it?

Klaus-Peter Frahm: Absolutely right. Absolutely right. And? And it’s not that simple either. This loop can also have different speeds, it can have different effects. So it can be a small loop that only works inside a Scrum team. But it can also be a very big loop that sort of works its way through all aspects of the organisation. And we used to have that, we have that in writing, we always talk about the Hamburg learning flower, which can be of different sizes. But that’s going too far now. I’ll have to present that again some other time.

Elisabeth Leyser: Yes, we can do a second podcast. That means that it is very important that managers have the right mindset, that they are prepared to embark on such a journey into the unknown, because the need and desire for a linear process, where it is clear at the beginning what the end result will be, will probably not be completely fulfilled.

Klaus-Peter Frahm: No, no, I have to say that. Yes, we’ve got over that in the meantime. So it won’t work like that any more. And there is also, I think, little dissent in the market of counselling and so, yes, it is, I think, clear that that is the case and that not all managers have reached that point yet or some are only paying lip service to it. But still. Yes, but that doesn’t change the fact that it is absolutely necessary. So, above all, when it comes to digital products, i.e. when it comes to trainers, you can perhaps be a bit more relaxed, but when it comes to digital products. Then it is inevitable and you notice it. All organisations that are very successful, i.e. the big tech companies, which are pure software companies, grow at an incredible speed. And that is precisely because they have built this learning into their system.

Elisabeth Leyser: That almost sounds like it, but of course I don’t want to anticipate it like an answer to my next question. What do you consider to be the most important distributors of a company besides innovative ability?

Klaus-Peter Frahm: Yes, that’s a good question, because at the end of the day. I always try to condense it a bit in the sense of: What do we need to be innovative? And these are, so to speak, also very important drivers that lead to the development of innovative strength, because at the end of the day it is innovative strength that ensures actual survival or actual growth. And these are, of course, precisely the things we have already talked about. And that means the willingness to learn, that is, to really take the learning organisation seriously. Then, of course, everything that goes with it, that I create transparency and trust in the people who work there, that I tolerate mistakes. And so on. These are all classics, but they are totally important. So it is very, very fatal to dismiss them as just nice to have, but they are fundamentally important. And yes, basically it is somehow the things I have just mentioned that contribute to this. So I think, of course, there are always a few other things that somehow play a bit of a role. But these are the central ones. So these things are raised as principles, that’s how I would describe it.

Elisabeth Leyser: Okay, that’s very understandable to me and I think that’s something that really needs to be developed very intensively at the moment, not only at the company level, but really, I would say, at the global level, so that we can solve the complex problems we face. We have to solve the complex problems we are facing. If you would now conclude by giving our listeners some advice or a tip? What should you pay special attention to when aiming for a successful product innovation? When you are tackling something like this?

Klaus-Peter Frahm: Um, yes. Well, there are many things or it is always difficult to pick out one thing. But I think that what makes our framework so strong, at least according to that. That sounds a bit like adulation, self-praise. But it is actually what is at the core of the framework, that is what we call the conclusiveness check, so to speak. That is, when we have gathered all the information together from different perspectives to describe the system of these product innovations and to create a common picture, then this framework provides a very simple technique to check whether what we are doing makes sense conceptually. That’s what we call the coherence check or core context fit. And I think it’s really important to keep checking that what we want to achieve at the core, that value proposition, really fits in with how the framework, the conditions are created, i.e. the internal conditions, but also the external conditions. And through this very simple technique that comes with this framework, the one that is described in it, I can really examine within an hour, very systematically examine whether my value proposition, what I have in mind, whether it fits with the framework, whether it really makes sense and that is that. That’s why we call it the Sense Making Framework. What we’re doing has to make sense, what I’m doing. And that’s a very, I’m just repeating myself here, very simple technique and very effective.

Elisabeth Leyser: So I think to myself, when you talk about this, I immediately think of a whole range of products that obviously haven’t done this check, where any inadequacies become apparent very quickly. And I think to myself that this is of course a very important thing, that this is done at an early stage, when certain levers can still be turned and one can then realign oneself again or even better. Yes.

Klaus-Peter Frahm: First one more thing. And especially when I talk to business leaders, I always try to get this picture that what we are doing is a fitness check. It has to fit together. Fitness check. And if, for example, I were planning to climb Mount Everest, I wouldn’t just put on my trainers and run up there, but I would prepare myself. I would do my fitness check. I would make sure that everything fits so that I really reach my goal. And that’s how you have to look at it. When I describe an innovation, a project, then I have to see whether it is fit enough in some way, whether I am fit enough, whether the organisation is fit enough for it. That’s a bit where I always get them. So that’s right, it makes sense. I wouldn’t just run up Mount Everest without a fitness check.

Elisabeth Leyser: That’s certainly a very good metaphor. That is, you say innovation is best not done without a fitness check and actually, with your approach, you offer a way to cast a very complex way of looking at things into a consistent framework. And I think that is very, very helpful and certainly very exciting for very many companies. Thank you for the interview. Thank you also to our listeners for listening. If you enjoyed the episode, we would be very happy if you subscribe to us via a podcast app, but also by giving us a five-star rating or recommending us to someone in your circle who might be interested in this episode. This helps us continue to attract exciting guests and explore new topics around transformation, change, transformation for them. We look forward to having you back next time.