Escaping the Build Trap: How Effective Product Management Creates Real Value

by Melissa Perri

it’s important to have experienced people in product management who can pair with the junior people.

Setting up an associate product management or junior product management program is key. If you run a company or are in a position to craft your product organization, I encourage you to create this career option for people.

Pair them with a senior product manager to teach them the ropes. Give them all the coaching they need. We create the senior people we need by giving junior people a chance.

The product manager works with a development team and UX designers to ideate and build the right solutions for the customers. They are the ones on the ground floor, talking to users, synthesizing the data, making the decisions from a feature perspective.

The danger is when a product manager is 100% operational, focusing only on the process of shipping products and not on optimizing the feature from a holistic standpoint. When they only optimize for the day-to-day execution of the team, they usually fall behind in the strategy and visioning work that is needed for the success of the features.

A senior product manager is responsible for the same things as a product manager, but they oversee more scope or a more complex product.

Their role is very similar to the architect role in development, which focuses more on laying the development structure and scaling it rather than managing other developers.

The director of product is the first level of people management. They oversee a group of product managers who are aligned around a product in a portfolio or product line. The director of product is responsible for the strategic roadmap of the product, usually looking at a time horizon of a year. They are also responsible for the operational effectiveness of the team, making sure all product managers are aligned by the appropriate goals and working on the most important items to move the product forward.

The VP of product is responsible for connecting the company goals back to the growth of their product line.

A successful VP of product needs to fundamentally be more of a strategic person and to know that, in order to scale their organization, they need to hire in people who take over the tactical and operational components. This also allows them to grow into the role of CPO, which is primarily strategic.

A CPO oversees a company’s entire product portfolio.

The CPO is responsible for driving the economic success of the business through the growth of the product portfolio. Although a VP of product needs to understand how their product roadmap affects the economics of the company, a CPO needs to do that across all products.

Assuming they are already skilled in all aspects of product, technology, and financial management, those that make the best chief product officers also have three key traits that set them apart: they inspire confidence, empathize, and are relentless and resilient.

“Most of this is really great. I’d like to work this way, but I can’t because I have to keep the backlogs full for our login API. If I don’t do that, my developers won’t have anything to do.” “Is it a new API?” I asked. “Are there massive issues with it right now that you’re trying to fix?” Turns out there were no major problems with it. It had been working fine. “What’s your goal? When do you know that your API is done and that you can move on to something else?” “Oh, no, no, no,” she said. “This is what I own. This API is what our team owns, and we’ll never get something different. This is our feature—​we just own this forever.”

here she was creating work for her team because she had been told it was what she owned and could work on.

A similar issue happens when teams are organized around specific features. A lot of teams do this to get coverage—ownership over every part of the product. Although this is good if you are literally starting from scratch and do not have a product organization set up, but, over time, it promotes a very output-oriented mindset. Instead of working toward a goal and saying no to anything that doesn’t get us there, we tend to look for ways to develop more things related to our little slice of the product.

If we take a step back and align the work of these teams to the overall vision of the product and strategy (which we talk about in the next section), we find that much of th...

The way they organize their teams—around strategic goals—allows them to stay small and still get an immense amount of work done. One team is focused on retention, another on implementing new currencies, and another on acquiring new users. Each of the teams has ownership of their goal and is judged for success based on their outcomes. They are also allowed to work across all products to do whatever is needed to reach those goals.

Even though the coordination might seem like a handful, having fewer teams makes them ruthlessly prioritize around the most important initiatives. There’s no useless work.

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. Every organization should strive to optimize this flow in order to get value out the door faster to customers. To do that, it makes sense to organize your teams around the value stream.

The products for an insurance company are what they sell to customers: car insurance, home insurance, life insurance, and so on. I buy car insurance because it provides me with peace of mind in case I get into an accident—that’s value. Having an iPhone app that allows you to manage your car insurance, for example, is only a piece of that product’s value stream.

You can’t build an organizational structure without a product vision, because the value streams are not apparent.

Product managers need room to manage toward an entire outcome-oriented goal. This means that people need to be aligned around value and to have the scope to actually make measurable impact toward it. This gets to what we were talking about earlier—​organizing teams around your strategy, which is the most important work for your business.

When organizations lack a coherent product strategy that is ruthlessly prioritized around a few key goals, they end up spreading themselves thin. There are many teams working to optimize components but not the whole.

A good strategy is not a plan; it’s a framework that helps you make decisions. Product strategy connects the vision and economic outcomes of the company back to product portfolio, individual product initiatives, and solution options for the teams.

Netflix knew that, if it truly wanted to become the most convenient vehicle by which people would watch movies, it had to figure out a way to get entertainment into the hands of its users faster.

This development helped inform the company’s overall strategy for the future:2 Get big on DVD Lead streaming Expand worldwide

The Netflix story is the epitome of excellent strategy, and we’re lucky that they’ve talked openly about it so that we can learn from it. Yet, even with this strategy framework, the company still got caught in the build trap with Project Griffin and Roku. Why? It’s easy to become distracted,

Now the vision for Netflix is, “Becoming the best global entertainment distribution service, licensing entertainment content around the world, creating markets that are accessible to film makers, and helping content creators around the world to find a global audience.” This vision states not only why the company exists but also the plan for getting there.

Netflix then self-organized around key outcomes and strategies to help reach its goals. Gibson Biddle, who was a VP of product at Netflix from 2005 to 2010, talks about aligning his team around a common guideline for evaluating its product strategy. That guideline was to “delight customers, in margin-enhancing, hard-to-copy ways.”

Table III-1. Gibson Biddle, Netflix strategy, 2007

Good table

Netflix can change tactics or kill ideas because it commits itself not to the solutions they are building but rather to the outcomes these solutions produce. The company then enforces this mentality with a product strategy that is coherently aligned and decision enabling.

When we’re developing software, we often think of the details and neglect the big picture. What feature can we build? How do we optimize that feature? When will it be delivered? When a company thinks only about the feature-level model, it loses track of the outcomes those features should produce. That is what lands you in the build trap.

Good strategy isn’t a detailed plan. It’s a framework that helps you make decisions. Too often, people think of their product strategy as a document made up of a stakeholder’s wish list of features and detailed information on how those wishes should be accomplished. And they’re peppered with a ton of buzzwords like platform or innovation.

Communicating the end state of a product is not inherently wrong. You should be striving toward a vision. However, it becomes dangerous when we commit to these visions and lofty feature sets without validation. When I ask people what their strategy is and they begin reciting their to-do’s, I always ask this follow-up question: “How do you know that this is the right thing to build?”

Thinking of strategy as a plan is what gets us into the build trap. We keep adding new features to the list but have no way to evaluate whether they are the right features in the holistic context of our company.

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 strategy should sustain an organization for years. If you are changing strategy yearly or monthly, without good reason from data or the market, you are treating your strategy as a plan rather than as a framework.

The Knowledge Gap (Figure 11-1) is the difference between what management would like to know and what the company actually knows.

Instead of seeking more detailed information, upper management should be limiting its direction to defining and communicating the strategic intent, or the goals of the business.

Consider a product manager telling you the following: “I’m building this because it’s going to help increase acquisitions, and new customer-acquisition is our big goal to drive the revenue prioritized at the corporate level. I know my product can bring people in. We know there’s a problem here, but we’re not sure what it is yet. Our next step is to discover that problem, tackle it with a solution, and then try to optimize the solution so we can increase acquisition.” That’s someone telling the story. A product manager who told you this should inspire confidence. Unfortunately, the opposite is usually true.

Leaders will still go through the ranks demanding more detailed information. Often, this is perceived as a lack of trust, and often it is, but there’s usually something more there.

This Alignment Gap is what truly causes the demand for more and more information.

The Alignment Gap, shown in Figure 11-2, is the difference between what people do and what management wants them to do, which is to achieve the business goals. Organizations try to fill this gap by providing more detailed instruction; whereas, instead, they should allow each level within the company to define how it will achieve the intent of the next level up.

At one company, I walked around asking all of the product managers on the hundred or so teams why they were working on their current project. I then asked their leaders the same question. I got two different answers from these two different levels.

leadership had passed down feature requests rather than expected outcomes and goals. As soon as those feature requests were committed, it was nearly impossible to change them because the company expected them to be delivered.

I was told that it could not do any validation work around its products because the solutions the teams were building were already committed to the leadership of the company.

As long as they are aligned with the overall strategic intents and vision for the company, management should feel comfortable granting the necessary autonomy to capable teams.

Instead of sending down mandates, organizations should, instead, turn to aligning every level of the company around the why and should give the next layer down the opportunity to figure out the how and report back.

The Effects Gap (Figure 11-3) is the difference between what we expect our actions to achieve and what actually happens. When organizations do not see the results they want, they try to fill this gap by putting more controls in place. However, that is the worst thing you can do in this scenario. Giving individuals and teams the freedom to adjust their actions so that they are in line with their goals is what will truly allow them to achieve results.