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September 20 - October 2, 2021
I soon realized that it was not just the product managers that were stuck in the build trap, but the entire organization. Solving the processes for the team was not enough. It was about setting up the entire company to support good product management.
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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.
The build trap is a terrifying place for companies because it distracts them. Everyone is so focused on shipping more software that they lose sight of what is important: producing value for customers, hitting business goals, and innovating against competitors.
To get out of the build trap, you need look at the entire company, not just at the development team. Are you optimizing your organization to continually produce value? Are you set up to grow and sustain products as a company?
Every feature you build and any initiative you take as a company should result in some outcome that is tied back to that business value.
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.
companies need to get their employees closer to their customers and users so that they can learn from them, which means having the right policies throughout the organization to enable this.
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-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.
Product management is the domain of recognizing and investigating the known unknowns and of reducing the universe around the unknown unknowns.
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.
Figure 6-1. The product death cycle, by David J. Bland (reprinted by permission of David J. Bland)
Product managers are responsible for the why? Why are we building this? How does it deliver value to our customers? How does it help meet the goals of the business?
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 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.
Meghan explained to our team what one experiment entailed: manually taking on the work to understand how to establish an online system for uploading and verifying required documents for mortgages. The team worked with select first-time applicants and had them email the documents. The bank designated a person to review documents and to approve them during this experiment. Over that time, new applicants completed their applications 90% more often than those who had come into the office to have them verified.
what made Meghan and her team so successful. She began by asking Why? 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?
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?
typical product management career path: Associate product manager Product manager Senior product manager Director of product VP of product Chief product officer (CPO)
Netflix decided to build its own internet-connected device that plugged into TVs. They called it Project Griffin.3 The company spent years developing the product, testing and validating the device. Everyone was amped. Then, a few days before launch in 2007, Reed Hastings sent out an email to the entire company saying to stop production on it. “Just kill it”, he said. All that time, all that money, wiped out, a few days before launch. Why? Hastings realized that if he launched a hardware device, he could not partner with anyone else. He would be in the business of hardware, not software or
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“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.”
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?” Most of the time, I cannot get a straight answer to that question, or I hear, “I have no idea, but my boss told me to build it.”
Strategy is a deployable decision-making framework, enabling action to achieve desired outcomes, constrained by current capabilities, coherently aligned to the existing context.
These gaps ultimately cause friction within the organization: The Knowledge Gap The Alignment Gap The Effects Gap
“They aren’t going fast enough, they are slacking off.” Chris was a huge fan of Objectives and Key Results (OKRs) and had implemented them throughout the company, but they were very output-oriented instead of outcome-oriented. “Ship the first version of the new teacher platform,” was how one objective was described. And “Deliver by June 2018” was considered a key result. They weren’t tied to any outcome — either business or user-oriented.
Okrs should be outcome oriented
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.
Tying budgeting, strategy, and product development to this artificial yearly time cycle only creates lack of focus and follow-through. Instead, companies should be continuously evaluating where they are and where they need to take action, and then fund those decisions.
This should be a cyclical process throughout the organization, in which information is being communicated up, down, and across, to ensure alignment and understanding.
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.
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
“What is the difference between a company mission and vision?” A good mission explains why the company exists. A vision, on the other hand, explains where the company is going based on that purpose. I find that the best thing a company can do is to combine both the mission and the vision into one statement to provide the value proposition of the company — what the company does, why it does it, and how it wins doing that.
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. Netflix
Strategic intents are always aligned to the current state of the business. When determining what these intents are, the C-Suite of the company should ask, “What is the most important thing we can do to reach our vision, based on where we are now?” There should not be laundry list of desires or goals — just a few key things that need to happen to make a big leap forward. Keeping the list of strategic intents small focuses everyone.
Strategic intents should be at a high level and business focused. They are about entering new markets, creating new revenue streams, or doubling down in certain areas. Think back to the Netflix example at the beginning of this section. Netflix had a clear strategic intent: “Lead the streaming market.” All of its decisions, from enabling internet-connected devices to focusing on creating more content for users, helped to achieve this goal. It pushed them in the right direction. When that goal was realized, Netflix changed course to maintain its position by creating its own content — another
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Netflix created a product initiative to tackle this problem for the user. Putting that in user story format, we’d get, “As a Netflix subscriber, I want to be able to watch Netflix anywhere, with anyone, comfortably.” This is the company’s product initiative. It then explored many possible solutions — developing the Roku, partnering with Xbox and creating an app for it, and ultimately enabling all the internet-connected devices it could. All of these solutions, which I call options, were aligned to this product initiative.
After we have set the goal, we begin walking through the Product Kata. 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?
UX for Zappos, once told me: “Don’t spend your time overdesigning and creating unique, innovative solutions for things that are not core to your value proposition. If someone has already solved that problem with a best practice, learn from that, implement their solutions, gather data to determine if it’s successful in your situation, and then iterate. Reserve your time and energy for the things that will make or break your value proposition.”
Kodak made good strides in trying to innovate, but its organization prevented it from doing so. The company was reactive rather than strategic, waiting too long to respond to a threat. By isolating a small team in an innovation lab, it also didn’t dedicate enough people to thinking about the future of the business.
Tying livelihoods to the fact that you shipped product at all, instead of learning or solving problems for customers, is what gets people into the build trap. It also means that people are afraid to try anything new.
We still want to incentivize sales teams to keep selling, but adjusting the components of their salary so that their livelihood does not depend too much on commission percentages can help to mitigate this risk. Tying retention numbers to their success metrics can also help to ensure that they target the right people.
If you are a leader at a company, it’s time to reevaluate how you are incentivizing people. You should be rewarding people for moving the business forward — achieving outcomes, learning about your users, and finding the right business opportunities. At the end of the day, the rest is just vanity metrics.
The purpose of a product manager is to create value for the business by creating value for the customer.
