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

by Melissa Perri

When companies are small, you can organize effectively around goals you are trying to reach. Consider how TransferWise does it. This London-based company does electronic transfers. You can send money to different countries in other currencies with very low fees, compared to what the banks charge. TransferWise has a relatively small number of product teams at around 12. 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

It takes a huge amount of coordination across the product teams, so everyone is responsible for collaborating intensely with one another. 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. This structure also creates a nice redundancy throughout the company, so that important information about a single product is not stuck in the head of one person. If someone leaves, they don’t need to worry about all that ingrained knowledge going with them. If one team is busy with work, another team doesn’t need to wait for them to fix a bug because they own that piece of the product and no one else knows how to fix it.

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.

When teams are not sufficiently constrained, they become stuck. As Bloom explains: The unconstrained team is the most frightened and scared to act in the organization. They feel like they cannot make a decision because there are too many options. Appropriately constrained teams, ones who have a direction set to the right level for them, feel safe to make decisions because they can see how their stories align to the goals and structure of the organization.

In most product organizations, there should be four major levels in strategy deployment (see Figure 12-1): Vision Strategic intent Product initiatives Options

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.

One intent is usually good for a small company, and three are plenty for a large organization. Yes, three. I know that sounds like very few goals for an organization of thousands of people, but that is key. This

Product initiatives translate the business goals into the problems that we will solve with our product. The product initiatives answer how? How can I reach these business goals by optimizing my products or building new ones?

Product initiatives set the direction for the product teams to explore options.

The product vision communicates why you are building something and what the value proposition is for the customer. Amazon does this particularly well by creating what they call Press Release documents for every product vision.

These short (typically a page or two) notices describe the problem the user is facing and how the solution enables the user to solve that problem.

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 building because it does not serve this vision?

Initiative 1 We believe that by increasing the amount of content on our site in key areas of interest, we can acquire more individual users and retain existing users, resulting in a potential revenue increase of $2,655,000 per month from individual users. Options to explore Easier and faster ways for teachers to create courses Feedback loops for teachers on areas of interest for students Outreach to new teachers who can create courses in areas of interest Initiative 2 We believe that by creating a way for students to prove their skills to prospective or current employers, we can increase acquisition, resulting in a revenue increase of $1,500,000 a month. Options to explore Continuous assessment that allows students to constantly take tests to prove skills Certificates of completion and competence

To determine whether we are getting closer to achieving our product initiative, we need to break the success metrics into something we can measure on a shorter time scale. We call this the team goal, and it’s how we measure the success of the option. Although it can take six months or longer to reach the product initiative goal, the team goal should be something we can measure after every release, which gives us feedback that our option is working the way we want it to.

The team pulled together the numbers from the data and defined their original option statement: We believe that, by making it faster and easier for teachers to create courses, we can increase the rate of published courses to 50% and increase the number of second courses created to 30%.

Most companies I’ve worked with have a few core meetings to evaluate progress and to make strategic decisions from a product level: Quarterly business reviews Product initiative reviews Release reviews During quarterly business review meetings, the senior leadership team, made up of the executives and the highest level of the organization, should be discussing progress toward the strategic intents and outcomes of a financial nature. This includes reviewing revenue for the quarter, churn of customers, and costs associated with development or operations. The chief product officer (CPO) and their VPs of product are responsible for communicating how the outcomes of product initiatives have furthered strategic intents, like Karen did at Marquetly. New strategic intents can be introduced in this meeting, as older ones are coming to completion. It is not a place to prioritize new product initiatives or to go into detail on them. That is what the product initiative review is for. The product initiative review is another quarterly meeting that can be staggered with the quarterly business review on off months. This meeting is for the product development side of the house — CPO, CTO, design leaders, the VPs of product, and the product managers. Here we review the progress of the options against the product initiatives and adjust our strategy accordingly. This is the place for product managers to talk about the results of preliminary experimentation, research, or first releases, as th...

Release reviews provide the opportunity for teams to show off the hard work they have done and to talk about success metrics. These should happen monthly, before features go out, to showcase what is in the pipeline to be released. During this meeting, we should be communicating only what we know is going to ship — not experiments or research being conducted. Although not necessary, most executives like to attend this meeting to see what is being shipped out to customers. This can also be a place for teams to communicate their roadmaps internally so that marketing, sales, and the executive team are aware.

The chief of staff created a very small team (two people) to help her streamline operations and reporting. They oversaw the cadences of strategy, found an analytics partner to set up tracking, and collected and organized the progress toward goals into reports for executives. This allowed the product people to focus on what they were good at, while product operations helped them to make informed decisions, by surfacing up those reports.

This team is in charge of streamlining all operational and process work that product teams need to be successful. This includes: Create automated and streamlined ways to collect data on progress toward goals and outcomes across teams. Report on goals, outcomes, roadmaps, progress, capacity, and costs across the product organization, translating these activities into financial implications for the company executives. Set up and maintain a product analytics platform to report on product engagement metrics across the organization. Standardize product processes that go across teams, such as strategy cadences, experimentation tracking and feedback, documentation on product features, collecting data, setting goals, creating and maintaining roadmaps, and sales enablement. Organize and run critical product meetings for strategy creation, strategy deployment, and releases. Conduct any coaching or training for the product teams.

The product operations team should be made up of a combination of project managers and product people. It’s good to allocate a few developers to this team, as well, so they can integrate with third parties, if needed, or build custom tools to fit a specific purpose.