In a world where the overall life span of products and even businesses is diminishing [1], to survive and sustain growth it becomes important to view things holistically [2]. A myopic, short-term view not only would increase the chances of being disrupted but also may cause damage to the larger system (market, environment, etc.) as such. Taking a systems (holistic) view to understand the real market drivers and focusing resources appropriately could improve outcomes and, contextually, the success of new product development initiatives.
Before attempting to bring out a competitive new product, the team should perform a comprehensive review of the market needs, not just the immediate elements visible to them which many myopically term as “the system”. A well-designed product should help the overall system function smoothly, while also taking care of itself.
However, in my over two decades of experience, working across domains both in the services sector as well as with product development firms, a frequent observation is the understanding and usage of the terms “product” and “system”. Some use the terms interchangeably while some consider one to be more complicated than the other.
In my view it is the scope that differentiates a product from a system. A product is confined to a specific purpose or a set of functions whereas a system is much broader and more dynamic. One should treat a product as a sub-system with a definitive purpose within the larger system (ref table 1 for examples of system and product/sub-system combinations). A system could evolve over time to perform something totally new, which may or may not have been the initial intended purpose. In contrast, a product will have to be repurposed (typically by human intervention) if it must perform another function beyond what was initially intended. A system facilitates an outcome, whereas a product performs the systemically required action. You can again look deeper into a product and find it to contain a “system” encompassed, but within the specific system’s context it should be limited to being treated as an individual element. But for the longevity of the product both economically as well as utility to the end beneficiary the product’s features and functions should be aligned with the system in which it will be utilized.
In an era of artificial Intelligence, exponential technological growth, and increased globalization resulting in frequent disruptive alternatives, it seems imperative to adopt a systems thinking approach by even the product developers to increase chances of their product’s success in the market.
For example, a “car” in a “transportation” system would be a collection of components working together as a “car” to transport someone or something from one point to another. If you look deeper, a “car” is in itself a system but in the context of a “transportation” system one should confine looking at the car as an individual element, using the interconnections (roads) to perform its function. However, the developers of the car should take a systemic perspective to make the product (the car) more useful in its operational environment, namely the “transportation” system.
Similarly, in an agricultural system, there are multiple living and non-living elements, namely cattle, seeds, fertilizer, tractor, water pumps, farmers, etc. that collectively work towards producing the crop. The crop is the product of the agricultural system. Each of the elements such as fertilizer, seeds are an outcome of their own respective systems but in the context of the “agricultural” system they are independent elements interconnected through soil, water, insects and so on to perform its function, namely producing a crop.

To summarize, in my view, a system is a collection of entities and their interconnections working in tandem to facilitate a certain outcome, where as a product (or sub-system) is an independent entity (intelligent agent or passive object) whose function is fixed within the context of its intended use.
To define the purpose or to understand the dynamics of the system, we should look beyond the role of the product and take a systemic (holistic) view, while confining the product(s) to be independent elements of the system. Once the system dynamics are understood well then defining or redefining the products’ features and functions would be quicker and would add more longer-term value.
This view is contrary to, when product developers narrow down the focus on just the functions of a product or the features of a competitor’s products (e.g. better aesthetics for patient monitoring systems or better infotainment systems in cars), it is easy to overlook the underlying fundamental systemic needs (e.g. more usable, affordable and accessible) and in the process lose stake holder interest in the product. This narrow and short-term focus could be due to many reasons such as customization requests by a few influential customers, new regulatory norms or pressure from competitive products that gradually change the course of the products’ utility. Whatever the reasons, ignoring the underling system that originally created the need for such a product and focusing or reacting purely to address the momentary needs could lead to the product becoming redundant gradually. This creates an opportunity to be disrupted.
For sustained growth and prosperity, it is important to understand the system’s dynamics more than just short-term requirements. The incremental revisions should also be in line with the original systemic needs to avoid being disrupted.

To conclude, it might be worth noting that, a well-designed product (or sub-system) will not impose constraints that push the overall system to underperform or even become vulnerable. When that happens, one creates opportunities to be disrupted.

References:

1. Abhilash Gopalakrishnan, “Reinventing Technology and Innovation Management Using a Three-Dimensional Approach,” in IEEE Engineering Management Review, doi: 10.1109/EMR.202
2. Donella H. Meadows, Thinking In Systems: A Primer, ISBN:978-1603580557
3. Marketing Myopia, Sustained growth depends on how broadly you define your business—and how carefully you gauge your customers’ needs. by Theodore Levitt, Harvard Business Review, July 2004, retrieved July 2024

DOI: 10.13140/RG.2.2.32983.69286

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