New ways of working to drive product innovation

If someone offers you a free coffee next time you’re at the post office, don’t be alarmed. The coffee – or perhaps a voucher – is a penny for your thoughts. Australia Post wants to know what’s bothering its customers and how it can make their lives easier through digital innovation.

“It’s part of what we call user-centred design methodology, which puts the customer and user at the centre of everything we do,” Australia Post’s General Manager Trusted Solutions Centre, Carl Rigoni, says. This means listening to the real challenges of real customers and using these insights to drive development of new digital products and services.

Start with asking the customer

Here’s an example of how Australia Post’s new approach works. Can you remember the last time you moved house or office and what a pain it was notifying everyone of your new address? Imagine if you could notify your bank, insurers, utilities providers and many other organisations with just a few clicks of your mouse.

In late 2015, Australia Post asked customers at several post offices for their thoughts on change of address notification (COAN). The overwhelming feedback was that people were extremely busy when they moved house and the notification process was a time-consuming irritant.

Brainstorm it, test it, take it to market

Within days, an Australia Post team started brainstorming ideas on how COAN could be made quicker and easier through an online digital product. More feedback from customers showed that people preferred to log in as a guest rather than having to create a profile; the main organisations they wanted to notify were energy companies, telcos (phone and internet providers), insurance companies, banks and the government; and their preferred method of confirming their identity was Medicare or driver’s licence details, or an SMS alert.

6 tips for digital product innovation

  1. Cross-functional teams: group a range of skillsets into each team, including project managers, software developers, designers, marketers and sales reps.
  2. Co-location: keep all your expertise in one place so staff can collaborate quickly.
  3. Capacity funding: fund projects fully from the start, so teams don’t have to waste time presenting a new business case for each component.
  4. User on board: keep your customer front and centre, try early designs on a test market, respond to feedback.
  5. Constant iteration: continually improve your product until your customers are happy.
  6. Get a minimal product to market: test your first workable platform and act quickly on feedback.

Armed with these insights, the Australia Post team designed a digital solution on paper, showed it to another 30 or so customers for more feedback, then started developing it properly. They built a clickable prototype, then gathered more feedback from customers about which buttons they would need and how easy it was to use.

In January, Australia Post’s digital COAN product was launched in Queensland as a test market, and it will soon launch Australia-wide. The final version has just three steps: type in the old and new address; choose the companies you want to notify; then prove your identity. It’s easy and quick and has taken Australia Post just six months to develop.

All about agility

The COAN project highlights the huge transformation in Australia Post over the past couple of years. As its legacy core business of letter delivery fades, the organisation has fundamentally changed the way it works to embrace an agile approach to product development that puts the customer at the centre of the creative process.

For Rigoni, the journey started with Australia Post’s popular Digital Mailbox (formerly 'MyPost Digital Mailbox'), which allows customers to pay bills from almost 900 companies. He ran the mailbox for almost two years, building it to almost a million customers. As the business matured, Australia Post took the learnings gained from how it operated and pushed them out into other parts of the organisation to position it as a leading eCommerce company.

Act like an idea incubator

Rigoni says two key aspects of Mailbox were that it was capacity-funded (meaning it didn’t have to present a new business case to get funding for each project) and it was co-located (meaning various technical and commercial specialists were grouped together in cross-functional teams).

Last October, Mailbox’s 140 people were split into teams of 15-30, with each team including a range of skillsets from project managers, software developers, designers and iteration managers, to marketers, sales reps and go-to-market experts.

The idea is to have each team operate like a mini-incubator or start-up, working collaboratively to develop innovative products speedily, with customers involved throughout the process. “A key difference from other incubators is that we’ve got the sales team and marketing team engaged,” Rigoni says. “It’s end-to-end, taking an idea all the way through to go-to-market.”

Everyone’s accountable

Rigoni emphasises that this is a huge change in the way Australia Post works. All teams are co-located, there is joint leadership of technology and commercial and the design methodology is user-centred. “This is world’s best practice for digital development,” he says, noting that digital superstars such as accommodation site Airbnb and music site Spotify use the same approach. “You have co-located teams with a cross-functional set of skills, and you give them problems to solve, not solutions.”

This new way of working makes everyone more accountable for what they achieve each day, rather than being told what to do. “Having the customer front and centre makes you more accountable for developing solutions,” Rigoni says. “You don’t make assumptions, you have hypotheses which you prove or disprove. This shortens product development time and is more accurate.”

Under an old-style “waterfall” approach to product development, where each phase had to be scoped out, approved, funded and finished before the next phase started, new products could take more than a year to get to market, Rigoni says. Now, with customers and users at the centre of the process, providing continual feedback, a minimal viable product can be ready for market quickly and cheaply.

Customer feedback really counts

It also means a team can change direction when customer feedback shows that a proposed solution needs tweaking. An example? One of Rigoni’s teams was working on a service that allowed customers to send all their bills to a central location for payment. Feedback, however, showed that customers didn’t want the hassle of having to forward their bills, they would prefer a product that scanned their inbox and automatically extracted bills for payment. A solution based on this feedback is presently under testing.

As for the future, Rigoni predicts that once COAN is launched, he expects another three or four major new, relevant digital products in 2016. One team, for example, is working on new payment solutions so different people can pay and store bills securely online.

“It’s not just about co-location and cross-functional teams, it’s the methodology,” Rigoni says. “Having customers and users involved throughout is crucial.” So if an Australia Post staffer offers you a coffee or a voucher for your opinions, don’t hold back.

    This article is provided for general information purposes only and is not intended to be specific advice for your business needs.

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