Lateral Thinking and Vertical Thinking in Product Management
Product Management, more than anything else, is a responsibility charter and a Product Manager (PM) is accountable for delivering a product that addresses a market need. At the same time this should present a viable and sustained business opportunity. It goes without saying that a good PM identifies opportunity for value that might not be clear to others.
This value discovery, however, does not happen in vacuum. It is not that PMs accidently stumble upon a breakthrough idea that can change the current customer paradigm and comes up with a grand idea to build a product that delivers a 10x value to the end customers.
On the contrary, true product discovery happens when a PM remains loyal to the problem and identifies a void in the market. There could be an unmet need or an unaddressed pain point that could not be met by any of the incumbents and a good PM is able to identify that opportunity and capitalize on that. However, this does not come easily. Good PMs rely on their vertical thinking and lateral thinking abilities along with customer empathy and knowledge to identify such opportunities.
Vertical thinking is a step by step sequential process which is more analytical and is backed up by evidences and data. It is a kind of thinking which PMs uses to bring frequent delta changes in a product based on some evidence and over time these delta changes compound to a significant drift in a positive way. In this case, the bets are small and there is always an option to fall back on the safety net. Though these small changes are like baby steps but these baby steps actually serve three purposes:
- It helps to maintain or improve the product-market fit
- If the product is in the growth stage, it helps to delay the onset of maturity stage of the product by extending the growth stage of the product
- It helps to maintain the value differential over the incumbents
Few metrics that could be leveraged to understand the impact of the incremental changes are Net Promoter Score (NPS), Daily Average Users (DAU), Monthly Average Users (MAU) and Customer Churn Rate. PMs with a good understanding of the customer can design experiments that yields quick feedback which helps to build solutions that improves these metrics over time.
On the other hand, lateral thinking, a term coined by psychologist Edward De Bono, is the thinking process that creates new solution alternatives altogether that were previously considered inconceivable. It is about approaching a problem from a different direction altogether and identify a solution which is path breaking. Lateral thinking accompanied with deep customer and market learning can bring magical outcome. The profound customer insight leads to a “pivot” which may bring about a hockey stick growth. Founded in 2014, Swiggy, a hyperlocal food delivery organization brought in a paradigm shift which has led to magic for Swiggy to keep unlocking new business opportunities with ease. It decided to venture into new business verticals i.e. Swiggy Stores and Swiggy Genie. It has successfully enabled services like Instamart, Stores, Genie, etc. and has multiple offerings in the pipeline aimed towards the vision of delivering unparalleled convenience for consumers. [Source: Re-Architecting Swiggy’s logistics systems]. However, adopting lateral thinking to solve a problem is risky and requires more meticulous validation and accurate understanding of the market. It is a high risk — high return proposition and requires a strong feedback cycle to arrive at the right conclusion. As it is a non-linear approach to problem solving, it needs a strong validation process. Implementation of such change takes time and is far and few.
While vertical thinking helps to narrow in and focus, lateral thinking, on the other hand brings innovation and disruption. Nevertheless, both vertical thinking and lateral thinking are indispensable skills for a PM. PMs equipped with the right insights on the customers can exercise them based on what is at stake and what are the desired outcomes.
