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January 22 - January 23, 2023
The build trap is when organizations become stuck measuring their success by outputs rather than outcomes. It’s when they focus more on shipping and developing features rather than on the actual value those things produce.
When companies do not understand their customers’ or users’ problems well, they cannot possibly define value for them. Instead of doing the work to learn this information about customers, they create a proxy that is easy to measure. “Value” becomes the quantity of features that are delivered, and, as a result, the number of features shipped becomes the primary metric of success.
Figure 1-3. The Value Exchange System
Your customers and users don’t exist in a vacuum, and so their wants and needs change according to what’s around them. Likewise, your opportunities for how to address those wants and needs are constantly evolving.
“How do you know that what you shipped was successful?”
Outputs are easily quantified things that we produce—number of products or features, number of releases, or velocity of development teams. Outcomes are the things that result when we finally deliver those features and the customer problems are solved. True value is realized in these outcomes, both for the business and for the user or customer.
Products, as I said before, are vehicles of value. They deliver value repeatedly to customers and users, without requiring the company to build something new every time.
Companies that optimize their products to achieve value are called product-led organizations. These organizations are
characterized by product-driven growth, scaling their organization through software products, and optimizing them until they reach the desired outcomes.
Product strategy connects the business, market, and technology together so that they are all working in harmony. You need to be able to lead with a value proposition for your users, or you will not be able to make money.
Product-led companies optimize for their business outcomes, align their product strategy to these goals, and then prioritize the most effective projects that will help develop those products into sustainable drivers of growth.
Unknown knowns are those moments when you say, “I feel like this is the right thing to do.” This is intuition from years of experience. Although we should all listen to our intuition, you should also be cautious because this is often where bias thrives. It’s imperative to check and experiment to see whether your intuition is right.
Product management is the domain of recognizing and investigating the known unknowns and of reducing the universe around the unknown unknowns.
Product management is a career, not just a role you play on a team. The product manager deeply understands both the business and the customer to identify the right opportunities to produce value. They are responsible for synthesizing multiple pieces of data, including user analytics, customer feedback, market research, and stakeholder opinions, and then determining in which direction the team should move. They keep the team focused on the why—why are we building this product, and what outcome will it produce? The chief product officer is the cornerstone of the product team in companies,
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A great product manager must be able to interface with the business, technology, and design departments and to harness their collective knowledge.
“Start listening to your team. Involve them. Listen to your customers and focus on their problems instead of your own solutions. Fall in love with those problems. Also, go seek out data to prove and validate your ideas. Turn to concrete evidence, rather than opinions.”
The real role of the product manager in the organization is to work with a team to create the right product that balances meeting business needs with solving user problems.
a product manager must be humble enough in their approach to learn and take into account that they don’t know all of the answers.
One of the worst traits a product manager can have is the lone wolf mentality—the idea that they are the only one responsible for the success of their product.
Product management is about looking at the entire system—the requirements, the feature components, the value propositions, the user experience, the underlying business model, the pricing and the integrations—and figuring out how it can produce revenue for the company.
The product manager carefully balances the line between all disciplines to be able to strategize and decide what is best for the product.
A great product manager listens intently to the inputs given from all their team members, but, at the end of the day, they make the difficult choices about what will be best for the business and the user.
Why are we making everything digital in the mortgage space? Why even do this project? What’s the desired result that we hope to achieve here? What does success look like? What happens if we make it all digital and nobody applies for mortgages?
How are we mitigating that risk?
When you look at the role of the product owner in most Scrum literature, the three responsibilities of the position include the following: Define the product backlog and create actionable user stories for the development teams. Groom and prioritize the work in the backlog. Accept the completed user stories to make sure the work fulfills the criteria.
these questions are important for creating successful products: How do we determine value? How do we measure the success of our products in the market? How do we make sure we are building the right thing? How do we price and package our product? How do we bring our product to market? What makes sense to build versus buy? How can we integrate with third-party software to enter new markets?
This introduces more levels in the product management organization, and the responsibilities of these people change depending on the amount of tactical, strategic, and operational work they do. Tactical work for a product manager focuses on the shorter-term actions of building features and getting them out the door. It includes the daily activities of breaking down and scoping out work with the developers and designers, in addition to crunching the data to determine what to do next. Strategic work is about positioning the product and the company to win in the market and achieve goals. It looks
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A value stream is all of the activities needed to deliver value to the customer. That includes the processes, from discovering the problem, setting the goals, and conceiving of the idea, to delivering the actual product or service.
Strategy is a deployable decision-making framework, enabling action to achieve desired outcomes, constrained by current capabilities, coherently aligned to the existing context.
A good company strategy should be made up of two parts: the operational framework, or how to keep the day-to-day activities of a company moving; and the strategic framework, or how the company realizes the vision through product and service development in the market.
Strategies are interconnecting stories told throughout the organization that explain the objective and outcomes, tailored to a specific time frame. We call this act of communicating and aligning those narratives strategy deployment.
In most product organizations, there should be four major levels in strategy deployment (see Figure 12-1): Vision Strategic intent Product initiatives
Options Figure 12-1. Strategy deployment levels The first two are at the company level, whereas the last two are specific to the products or services of the company.
With product development, you can harness this same approach, but we need to customize it to your situation. I call this the Product Kata, as illustrated in Figure 12-3. Figure 12-3. The Product Kata, by Melissa Perri To understand the direction, you are looking at either the vision, strategic intent, or product initiative, depending on which level you are starting on. The current state is related to where you stand in relation to your vision. It also reflects the current state of the outcomes, including the current measurement of those outcomes.
Table 13-1. Marquetly’s strategic intents Intent Goals Expand into the enterprise business. Increase revenue from currently $5 million a year to $60 million a year in three years. Double revenue growth from individual users. Increase revenue growth from 15% YoY to 30% YoY from individual users. Getting
The product vision communicates why you are building something and what the value proposition is for the customer.
The chief product officer (CPO) is responsible for setting the direction and overseeing the product portfolio. Having a philosophy for how your products or services help your company reach that vision in the near term or long term is key. To get there, the CPO answers these questions for their team: How do all of our products work as a system to provide value to our customers? What unique value does each of the product lines offer that makes this a compelling system? What overall values and guidelines should we consider when deciding on new product solutions? What should we stop doing or
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We ask ourselves the following: What is the goal? Where are we now in relation to that goal?
What is the biggest problem or obstacle standing in the way of me reaching that goal? How do I try to solve that problem? What do I expect to happen (hypothesis)? What actually happened, and what did we learn?
Retention is a lagging indicator, which is impossible to act on immediately. It will be months before you have solid data to show that people stayed with you. That is why we also need to measure leading indicators like activation, happiness, and engagement. Leading indicators tell us whether we’re on our way to achieving those lagging indicators like retention.
To determine the leading indicators for retention, you can qualify what keeps people retained—for example, happiness and usage of the product.
we all go talk to actual humans to get to the heart of their problems. In fact, Giff Constable wrote an entire book, called Talking to Humans, that can walk you through how to do just that.
By getting into the mindset of solving problems early, you allow much more time to build the right thing, because you’re not wasting time chasing after the wrong things.
Every industry and product has unknowns—getting creative about how you answer these unknowns is key.
When you think of building and releasing that first version of the product, you need to consider the trade-offs between the amount of value you can capture with the scope of the release and the time it takes to get it out the door.
The product-led organization is characterized by a culture that understands and organizes around outcomes over outputs, including a company cadence that revolves around evaluating its strategy in accordance to meeting outcomes. In product-led organizations, people are rewarded for learning and achieving goals. Management encourages product teams to get close to their customers, and product management is seen as a critical function that furthers the business.
When’s the last time you talked with your customers?
