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strategy

The Problem with Building Products in an Agile World

Over the past decade, there has been a ton of ink spilled over Agile development.  Much of the Agile narrative has focused on the pros of implementing Agile methodologies, such as better planning, faster feedback, and the ability to quickly pivot and make changes.  These are all good things.  However, from a Product Management standpoint, Agile has some major problem areas that can create inefficiency at best, or completely wreck a project at worst.

Before we continue, I want to be clear: I love Agile.  The teams I have managed and worked as a part of have delivered lots of user stories and requirements to Agile teams and seen success.  Agile can be wonderful.  In my travels over the past four years as a Pragmatic Marketing Instructor, I’ve also witnessed several “Agile traps” that jump up and grab teams.

1) Agile makes it harder to be disciplined with regard to strategy

Because of the nature of Agile, multiple sprints happen every two to four weeks.  Organizationally, we now have the ability to change direction more quickly than ever before.  This can be helpful to react to changing market conditions (or the needs of big deals).

Unfortunately, this ability to quickly change is a double edged sword.  Because we can change direction quickly doesn’t always mean that we should.   I often see Agile teams building half-solutions to dozens of problems instead of actually fully solving anything, because they are flipping from solving one problem to the next one too quickly.  Agile requires extra discipline to stick to the strategy when it’s tempting to continuously change direction.

2) Agile values feedback from customers (sort of)

Agilistas would say that they strongly value getting constant market feedback at the end of every sprint.  That’s good.  In my experience, what actually happens is that most teams recruit four to five customers who are willing to provide that level of constant feedback and then roll with them – for the rest of the release or even multiple releases.

Going back to the same customers for feedback creates a two-fold problem.  First, do those four to five customers really represent your overall market segment?  Or, are they the “noisy 20%” of your market segment?  In my experience, the types of customers who are willing to sign up for regular meetings to provide feedback every other week don’t typically represent average users; they represent power users and experts.

Second, customers aren’t dumb.  Soon, those four to five customers figure out that they have a disproportionate amount of influence on your direction, and realize that their feedback can turn you into essentially a custom development shop for their particular needs – again, that’s not market driven, that’s customer driven.

3) Agile’s roles can actually prevent you from being market driven

When teams implement Agile, they often look to create new roles.  Specifically, the “Product Owner” role is one that is often tasked to Product Management.

Unfortunately, the Product Owner role is extremely noisy and tactical and requires a lot of day-to-day interaction with Development in daily standups, sprint planning sessions, and retrospectives.  While there is nothing wrong with making the Agile team run efficiently, I have seen teams get so obsessed with “making Agile work” that they start sacrificing what Product Management really should be doing – which is spending time with the market.

I speak to Product Team members every week who are doing the Product Owner role, and they all tell me that 95-99% of their time is spent on internally facing Development activities, and they rarely, if ever, speak to anyone in their market.  That’s not a recipe for being market driven.

4) Agile helps us run faster, but are we running in the right direction?

Are you running in the right direction?

Agile’s big promise is that it will help us run faster in Development (or whatever), but it doesn’t say anything about if we are building the right thing to begin with.  That is the role of Product Management to find out.  I see Agile teams often getting so obsessed with the machinations of Agile that they forget that you can be the most efficient company in the world, but if you’re building something that no one wants, it’s pointless.

How is your team using Agile today?  Are you running into any of these issues, or others?  Please share your experiences in the comments section.

Join me for ProdMgmtTalk Today at 4PM PDT

I am going to be participating in a Twitter-based chat today with the crew from #ProdMgmtTalk at 4PM PST (6PM Central). The topic is going to be the Product Management X-Factor, a presentation that I’ve shared at several ProductCamps around the soft skills that make certain leaders rise to the top where others stagnate. I’d love it if you participated with us, so join the Twitter chat room and follow along, or ask a question.

Resources and the transcript will be posted here and on the ProdMgmtTalk website afterwards for you to read if you can’t participate live and in person.

ProductCamp Wrap-up, and Introducing ProductPotluck!

Another ProductCamp Austin has come and gone – Austin’s third.  If you haven’t participated in, or planned a ProductCamp in your city, there really are no excuses left.  ProductCamp has proven itself to be the ultimate grassroots gathering for Product Management, Product Marketing, and Marketing pros anywhere.  Austin’s third edition had a some valuable highlights:

  • Participation continues to grow by leaps and bounds.  The first PCA, we had 90 show up.  The second, 160.  The third – over 300!  In just over a year, we’ve experienced over 300%+ growth.  Many businesses would be envious of that kind of growth.
  • We’ve managed to maintain the spirit and character of the event as we grow it.  We do a post-camp survey after each event, and for the third consecutive time, our “customer sat” metrics were off the charts great.  98% of our participants would recommend ProductCamp to a peer.  For the third PCA in a row, we scored a perfect 100% on the question “Would you come to ProductCamp again?”  That is a testament to the team we’ve grown around this event.
  • Sponsorship is increasing.  We run ProductCamp on a shoestring budget – less than $10,000 not included donations such as venue.  In the beginning, we had a big sales job to get national level sponsors like AIPMM and Pragmatic Marketing interested.  Now, all of the major national product management sponsors are involved: Pragmatic, ZigZag, and Sequent Learning.  Local companies such as SolarWinds and AustinVentures are also taking notice.  SolarWinds used ProductCamp as a recruiting tool – it makes sense, since only the most motivated, passionate people are going to give up a Saturday to geek on on Product Management topics with their peers.
  • We’ve (re)validated Austin’s corner of the world.  Austin’s tech community has always perplexed me.  There are so many of us here, and we are so disconnected.  Austin doesn’t have the pulse that Silicon Valley has, and we definitely don’t have the density.  We do have passion and strong leaders in spades.  This third PCA proved that we can drive huge turnout here, and outside of the Valley can claim to put on the biggest ‘Camp.
  • ProductCamp is spawning leaders and building a critical mass.  We’ve built a great core team: people like Colleen Heubaum, Mark Suchanek, Bertrand Hazard, John Peltier, John Milburn, Roger Cauvin, and Scott Sehlhorst (and many others) have all contributed to the planning and execution of multiple ProductCamps.  This team makes me believe that we have established momentum.  It will be exciting to see the next generation of leaders step up, and the established team can work with them and mentor them to keep ProductCamp fresh and exciting.

Gaining critical mass has been a huge undertaking for ProductCamp Austin.  Setting up and tearing down the leadership for each event, twice per year, is a massive undertaking in manpower and logistics.  One consitent piece of feedback that we’ve heard from the ProductCamp participants is that they would like to continue the ProductCamp experience between the semi-annual ‘Camps.  In Austin, we don’t have a strong central Product Management and Marketing networking group like in other areas of the country.  That does not mean that we have to settle!

To fill the gaps between ProductCamps, the team that brought you ProductCamp Austin is introducing a new flavor of the ProductCamp experience: ProductPotluck Austin.  ProductPotluck is a mini-version of ProductCamp: instead of an all day event, it will be a happy hour plus a one hour session.  Instead of many topic areas and dozens of potential presentations, ProductPotluck will have 2 topic areas of focus, and a handful of potential presentations (or roundtables, panel discussions, or workshops).  Just like ProductCamp, ProductPotluck is by and for the participants – we will still have participants voting on which sessions make “the cut,” and the majority of sessions will be offered by the participants themselves (we’re leaving a little wiggle room to bring in distinguished guests, too).  We’ll cap the whole thing off by providing more time for drinking and networking, which is always popular.  As always, ProductPotluck is FREE; your only cost is your participation.

Austin’s first ProductPotluck will be October 21st, at the AT&T Conference Center near the University of Texas campus.

Happy Hour will be in Gabriel’s Cafe, which is located in the lower lobby (Level LL), to the north inside the University Avenue entrance.

ProductPotluck Sessions will be held in Classrooms 101 and 103.

Parking is available in the AT&T Center underground parking lot.  Pay for parking in Gabriel’s Café during Happy Hour and receive the $7 discounted rate.

1900 University Avenue
Austin, TX 78705
(512) 404-1900
www.meetattexas.com

Agenda:

5:30-6:30pm  Sign-in, Networking Happy Hour, Final Sessions Voting – Gabriel’s Café

6:45-8:00pm Marketing and Product Strategy Presentations – Classrooms 101 & 103

8:00pm -?? Networking Happy Hour – Gabriel’s Café

The two topics we will focus on this month are: Marketing and Product Strategy.

In true ProductCamp spirit, the participants determine which sessions are ultimately presented. Here’s how it will work: five Sessions have been submitted for voting consideration.  See the PPA wiki for detailed descriptions of each Session.

Marketing

  • Applying buyer personas to marketing strategy – Mike Boudreaux
  • Top 10 Ways to Use Facebook to Promote your Business – Christopher Sherrod
  • Error 404: The Panel You Are Looking For Does Not Exist – Jonathan Gesinger, Alex Jones, Amanda McGuckin Hager, Jason Sugawa

Product Strategy

  • Help! I work for an engineer who knows nothing about Product Strategy – Jeffrey Eversmann
  • From customer centric design to customer centric marketing to customer centric companies (Enterprise 2.5?) – Andreas Voss

At the PPA October 21 meeting, the five sessions will “face off” during the 5:30-6:30pm networking Happy Hour in Gabriel’s Café.  Each participant will be given one vote to place on the session of their choice.  The top session in each category will be announced and will run in parallel in Classrooms 101 and 103.

To get all of the details, please go to the ProductPotluck wiki.  We’re looking forward to seeing you on the 21st!

Have we Entered the Post-Product Management Economy?

Seth Godin recently made a post about Why Be Good?  Godin states that the worst thing for a Marketer is to be given a “good” product to market.  He’d much rather have a “bad” product.  Godin is a marketer, not a product manager, so his view doesn’t surprise me at all.  Ethan at On Product Management reacts strongly to Godin’s thoughts and turns Godin’s examples around, stating that the opposite is actually true – it’s better to have the best product, because that is what customers will buy.

This is a great interaction because it illustrates the rift between marketing and product management.  First, I suspect that Godin isn’t really saying that for any given company it is better to have an inferior product.  He’s saying that for a marketer it is better.  I’ll go a step further – for a great marketer (which Godin is) it is better.  The first question I always get from Marketing is “what are this product’s differentiating features?”  Lazy marketers love to have the leading product in a market because they just need to maintain the status quo.  A great marketer likes the challenge of winning with a product that doesn’t necessarily win on all of the features.  It was a painful lesson the first time I learned that it is not enough to have the best product on the market, you must also have great marketing to let people know about it and get people excited about buying.

Have you and your competitors reached near parity?  Do you differentiate using price?  Does sales laugh when you point out differentiating features of your product because those features don’t really matter?  Do you wordsmith new “features” just to have something the other guy doesn’t on your product slicks?

We’ve had “winning product solve customer problems” beaten into our heads as product managers.  In every market there is a set of features that solves the customer’s problem that everyone’s product has, e.g. the “baseline” feature set.  This is the barrier to entry that any new competitor must meet to play in your market.  You use features above that baseline to differentiate your product.

In commoditized markets, the size and relevance of the features above the baseline shrinks to near zero.  The importance of marketing increases as differentiation shrinks.  Eventually the barriers to entry become so low that nearly anyone can enter, at which point operational efficiency becomes the most important aspect for success, and marketing becomes primarily packaging and pricing.

One of my mentors used to work as a brand manager in consumer goods for P&G.  He told me a story about laundry detergent that is a great metaphor for where we are heading in technology.  The laundry detergent market is highly commoditized.  There are dozens of companies selling everything from luxury to economy detergents and everything in between.  P&G sold several different brands under different names, aimed at different customer segments.  The ability to segment and target customers in consumer goods is astounding – they have it down to a fine science.  “College educated Caucasian mothers under 40 with 3 kids living in a major metro area with a household income of >$125,000” is an example of the level of their segmentation.  If you go to the grocery and turn the detergent boxes on their side and read the ingredients, they are all nearly identical.  The major differences are pricing, and packaging.  It turns out that the mother above just doesn’t feel comfortable buying the “economy” brand, and will instead opt to pay more for Tide to basically buy a prettier box.  That much is obvious; the really interesting piece was the product differentiation.

People buy the pretty box but they aren’t dumb.  They open the box and see the white powder, the same stuff in the economy box, and they resent paying more.  P&G experimented with lots of options, and ended up adding green crystals to the Tide powder.  What did these crystals do?  NOTHING.  People assumed that they got their clothes cleaner or smelled better.  They were there to make you feel better about buying a nicer box with “power crystals.”

Over time, if you take several companies competing for the same market, they will commoditize it even without product management.  You don’t need product management to copy your competitor.  Lots of companies that have identified operational efficiency as their core competency are happy to let other companies take the first mover risk and be the second mover into a market.  If all of those companies have good product managers, they’ll be talking to the same kinds of customers and potentials, hearing similar problems, and developing similar products and features.  Price will become the differentiator and the market will commoditize.

I see a lot of green crystals in technology today.  There are lots of products where the baseline has risen to “good enough” and the differentiating features either aren’t compelling enough to justify paying for them, or customers just don’t care.  On the cost side, we’re squeezed by free and open source products.  What role does the product manager play in a commodity product?  I hypothesize that the markets where companies need product managers will shrink at roughly the rate that those markets commoditize.

What do you think – are we entering the post-Product Management economy?

The Spin Cycle

Anyone with children has heard of the telephone game: line up 30 people, the first person whispers something to the next, and so on down the line until the last person says what they were told aloud.  It’s funny because the message changes as it moves down the line.  In business, this effect isn’t funny; it’s dangerous, wasteful, and frustrating.

Most companies do an employee satisfaction survey at least once per year.  I have seen at least 10 of these surveys and in every single one, the top employee concern was “communications.”  The telephone game is bad, but when you observe that effect in two directions (executive level down, individual contributor level up) you get what I am calling the spin cycle – because you can spin for weeks on end just to get everyone agreeing before work on a project even begins.

“Go do’s” and Executive Fiat

Ideally, a Product Manager has the time to do research, write requirements, and bring products to market that meets the needs of customers.  Conditions on the ground rarely allow this process to happen cleanly.  In larger companies, there is the concept of the “go do.”  “Go do” means that for whatever reason, the executive team needs you to execute a tactical task.  A go do could be implementing a certain feature, choosing a certain partner, or attacking a certain market segment.  Usually go do’s are influenced by big picture concerns such as existing lines of business, strategic partners, or even keeping the board happy by interacting with another part of their investment portfolio.

A CEO I used to work with called mandates from management “ruling by Executive fiat.”  That is a great phrase, and reflected his desire to avoid Executive fiat unless completely necessary.  Sometimes you need to get in and break a tie on the team, but in most cases the right answer should be obvious.

Go do’s and ruling by fiat are dangerous because they remove decision making from lower levels of an organization.  Most go do’s come without explanation – it’s just “go do this.”  In the absence of reasoning behind a “go do” decision, teams project reasoning through their own world view.  The development team thinks management’s directive to choose a specific partner is a mandate to use .NET over Java.  The marketing team believes that implementation of a certain feature represents a new strategic direction for the company or product and aligns marcomm efforts accordingly.  The downstream effects of a fiat decision can be disastrous.

Sources of frustration

Management resorts to “go do” orders for several reasons:

  • Trust – they don’t believe in their team to do the analysis and come to the right decision, so they co-opt the thinking
  • Sensitive Information – they have access to sensitive information, such as M&A, that for business reasons can’t be made available to the team
  • Scope – they have line-of-sight to other lines of business that their segment is not concerned with addressing
  • Speed – they perceive the team and their decision making process as too slow, and want to short circuit process and jump straight to the “right” result

Employees get frustrated with mandates because they don’t understand the thought process behind the decision making process.  As a Product Manager it is possible that a mandate will be in direct conflict with the goals and roadmap of your product!  Reconciling this gap is a key communications hurdle that Product Management must step up and own.

The worst consequence of the spin cycle happens when employees take a go do and immediately start to execute based on their understanding of management’s ask.  They go off for weeks or months, working on a solution, bring the result back to management who says “wait…THAT’s not what I wanted!”  The communications cycle has broken down completely in both directions, fostering more mistrust between management and employee.  Since the employees didn’t “get it right,” management’s perception of employees as do-ers and not thinkers is reinforced, resulting in more and more mandates.  Employees  become jaded, stop asking “why,” and mumble about how management doesn’t know what they want.

Breaking the Spin Cycle

Product Management and Marketing sit in the unique position between the executive and employee layers, and are positioned to facilitate better communications across the entire business.  High performing teams are built on trust,

To truly break the spin cycle, first control the conversation.  When you are asked by management to “go do” a feature or partnership – ask “why?”  Some executives are insecure and take this as an affront to their power or management style, but good management will provide you with the reasoning behind the decision.  If they balk, explain that you will need to communicate this decision across the organization, including the deprioritization of other work in order to get this project done, and that being able to effectively explain the decision will help speed up the work.

Next, illustrate the impacts of a mandate.  Executive teams are notorious for “forgetting” about all the work in-progress, expecting new work to get tossed on the pile and not change the scope or dates on ongoing work.  Show how stopping current project, and starting something new will change release dates for everything.

Finally, be able to show strategic impacts of the decision.  If the executives want to mandate the usage of a specific partner, you need to understand that partner’s capabilities and  how that decision will change your roadmap.

How do you address this issue?  Please reply in comments!

How to Be Strategic

Roman Helmet“You should be more strategic.” “Product Management needs to focus on the strategic.” “I’d love to be more strategic, if only I wasn’t stuck doing all of these tactical things!”

Do any of the above sound familiar to you? Being asked to be more strategic, or wishing to become more strategic has been around as long as someone called themselves a Product Manager, but what does it really mean? How can you become more strategic when everyone is vying for your time – all the time?

Strategic is a term that has lost meaning since it became part of the Executive lexicon. Everyone wants to “be strategic,” because in the information economy we associate the most value with the people who come up with the best thoughts. Being tactical is, amazingly, viewed as a negative. You can hear the connotation drip from people’s mouths when they say it: “Oh, he’s a good candidate, but I think he’s too tactical.” Everyone wants to be the chef, no one the waiter…as if the food will cook itself and walk out to our customer’s tables.

Wikipedia defines strategy as:

“…a long term plan of action designed to achieve a particular goal, most often “winning.” Strategy is differentiated from tactics or immediate actions with resources at hand by its nature of being extensively premeditated, and often practically rehearsed. Strategies are used to make the problem easier to understand and solve.”

You can boil that down to strategy is about having the best plan. Whenever I hear people talk about not being strategic enough (or I catch myself doing it), three thoughts immediately pop into my head:

  1. Being strategic is not binary; you don’t wake up one day and say “today I am strategic!” It is a journey and a destination.
  2. If your goal for being strategic is to be well regarded, to be a leader, and to “win,” remember that people follow leaders that inspire not only by their words but by their actions. Even great strategic thinkers have to get into the tactical muck and implement their grand plans.
  3. You can control how strategic you are by your own actions. If being strategic is about having the best plan, and by extension the best/smartest/most agile thoughts, you can train your brain to be a step ahead of your competition and your peers. Here are some thoughts on how.

I’ve been fortunate to work with some really bright thinkers so far in my career and picked up a few tips on how to be a more agile thinker. Everyone has their own processing style, for instance I like to digest and think on a topic for awhile before coming up with a plan of action, but you might be a snap thinker who can do all of this on the fly – if so you’re ahead of me! Note that some of these questions overlap in scope.

Ways to be a Strategic Thinker

  • If we take the current action, what will be the downstream results to X, Y, Z? How will they likely react? How will we counter-react? You can’t get through a strategy discussion without a chess analogy, so here you go. These questions help you anticipate the moves of your competition, channel, etc, and decide beforehand how you want to react, so you’re not caught flat footed.
  • Who and what else are connected to this decision? How will this affect them? I like this question because it forces you to think through the implications of your decisions early. It’s easy to sit back and say “let’s change our distribution model” or “let’s move to SaaS!,” but being able to accurately predict and describe the challenges of plan of action will help guide you to the best choice.
  • Ask the Five Why’s; This sounds like a something out of a kung fu movie, but the Five Why’s are real. Five Why’s is a B-school/consulting method that says if you ask “why” at least 5 times you can get to the root of the problem. It’s all about digging deeper. Observe:

“I hate your company.”

“Why?”

“Because I have to wait for tech support for 3 hours to get someone on the phone!”

“Why?”

“Because your product didn’t work right when I plugged it in!”

“Why?”

“Because when I went to training they didn’t tell me I needed to hold the reset button while I plugged it in to load the factory settings!”

“Why?”

“Because your training is a joke, it’s all sales and no technical!”

“Why?”

“I only went because I couldn’t get a sales guy to call me back!”

In this example what appeared to be a product problem may actually be a sales, training, and support problem..

  • What external influences will affect me in the future? If your competition introduced a product tomorrow with the same features as yours at half the price, how would you react?
  • What internal influences will affect me in the future? If your company downsized and you lost half of your development staff, how would you react? What if you faced mega sales and had to quickly scale up?
  • Where is “good enough” okay, and where do we really need to invest to provide an out-of-this world experience? You can’t do everything perfect all of the time.
  • If I had unlimited funds, what one product development would move the revenue/profit/customer satisfaction needle more than all others? Which needle is more important to move?
  • If I had only one development dollar, where would I put it and why? This is closely related to the question above it.
  • Why are we winning today? Why are we losing? You need to understand your current stance if you want to build a solid future plan.
  • What do we do better than everyone else? Do you understand your core competency?
  • What problem do we need to solve for the customer? If you don’t know this…find out fast because it’s probably different than your assumption.
  • What barriers exist to prevent us from winning? Is it better to smash through those barriers, or route around them? Sometimes the only road to winning is to go through a competitor. But it’s 3-5x more difficult/expensive to gain a new customer than to recruit business from existing customers. Is there a way to win business without a head on confrontation?
  • What can we do that’s never been done before? I love this question because it’s challenging. It doesn’t just apply to engineering either, you can apply it to Marketing and Sales as well.

What other ways do you use to be a better strategic thinker?