Product Strategy: The Missing Link – Marty Cagan at Lean Product Meetup

• Meet a lot of teams, and some even in Silicon Valley and SF, that are not allowed to work the way good teams work.
• Went on a crusade to find out why. Started a multi-year effort around this.
• Increasingly being more honest about the difference between being a PM on a feature team and an empowered product team. A PM on a feature team is really like a project manager.
• Strategy; one of the hardest topics to talk about. Easier to talk one on one to company about it rather than generally.
• For those that haven’t heard me talk: I’m all about the difference between the great companies and everybody else.
• Amazon, Google, Netflix, Apple – four companies that have influenced me a lot. They have consistently innovated. They have very different cultures. But they share a commonality of empowered product teams.

• But how does a company choose what problems to work on? That’s product strategy.
• If you Google product strategy framework, you’ll get a lot of garbage – fill in the blanks sort of stuff.

• Companies don’t do strategy well because it’s hard.
• There are four things that are required:
  • 1) Ability to focus in on the critical business problems
    • Most companies don’t even know what focus is. They think it’s prioritisation.
  • 2) Generating insights on how to attack those problems
  • 3) Coordinated actions for each product team
  • 4) Active management of the work
    • Do not mean micro-management. But also don’t mean passive management. We need better management.

Focus

• It’s not a secret that most companies really struggle with focus.
• At this level, if you’ve got more than a few initiatives, you’ve got too many.
• The ‘Pandora Product Prioritization System‘ – a blog post which describes exactly the opposite of what you want to do. They give fake dollars to stakeholders and let them buy whatever features they want. They were bragging about it. But remember that feature teams are there to serve the business, and product teams are there to serve the customer (in ways that work for the business). This is serving the business by adding features stakeholders want.
• Could tell that this a recipe for disaster. They were going to get no innovation from this. And what happened: stock gradually went down and they got sold, they’re gone.
• They were confusing Focus and Prioritization.
• What does Focus really mean? It means two things:
  • Impact: Only a few things on your big list of work to do is really going to move the needle.
  • Throughput: If you try to work on too many things at once, everything slows down. You get more throughput if you limit the amount of things you work on – like Kanban.
• How do you pick the high impact things to work on? That’s where the smart leader comes in. They really look at the data to decide what is going to have the most impact.
• Organizations spend way too much time worrying about prioritization. They think about things that they don’t, and cannot know, like how much money it will make. Try to get them to stop looking at prioritization, and instead learn to focus.
• Part of this is getting very good, and fast, at trying things out.

Insights

• At most companies, they are too busy satisfying stakeholders to look at the actual insights.
• Strong companies: insights are everything.
  • They can come from anywhere, but mainly:
  • Qualitative insights – conversations with our customers and users. Prospects, former customers, competitors customers.
  • Quantitative insights. Data is good, but it sometimes cannot tell why, which is where qualitative comes in.
  • Technology insights. The tech foundations are always changing. Things we couldn’t do before, we now can.
  • Industry insights. Good teams live for this, and share it with everybody around them. Great leaders are like learning distribution machines.

Actions

• There are two ways to turn insights into action:
  • Command and control way, which usually turns into a roadmap.
  • The empowered team way.
• OKRs
  • I don’t recommend them anymore. I used to be an advocate.
  • There’s a lot of OKR theatre.
  • The fundamental issue. The OKRs came from the empowered product team companies like Intel, Google. If you take a company with feature teams, and overlay OKRs, you get a mess.
  • The real issue is not OKRs, but moving to the empowered team model.
  • Empowered product teams require a real product manager, not a project manager.
  • OKRs are not about individual targets, or manager targets, they are about the product team.
  • The Objectives need to come from the leaders (based on the insights and focus areas). The Key Results come from the team.
  • If you don’t have these three things, then OKRs are not for you:
    • Empowered product teams not feature teams
    • Product team’s objectives not manager’s objectives
    • Active leaders not passive leaders

Management

• No strategy survives first contact with reality – there will be a lot of learning.
• What do most teams do? They make roadmaps. This is all output, with a bunch of dates. This is not empowered product teams. This is what feature teams do.
• Management at good companies is very hands-on, but not micro-managing. They’re removing obstacles. Letting the team come up with the right solutions.

In conclusion

• It’s not that hard to know what really matters (for focus), it’s usually just a political issue. The board level usually knows. They can see something like retention, and it’s a fundamental issue that needs to be solved.
• Problem is you have a lot of different stakeholders and they all have their perceived needs. So it becomes a process of trying to do a little bit for everybody.
• Insights don’t just come out of nowhere. Good leaders are always preparing, studying the data. Using dashboards. Understanding the economics and dynamics of the company. At a company like Amazon it’s not unusual for leader to be tracking several hundred KPIs every day – they have a deep big picture view of the business. They’re doing their homework so that they don’t miss the opportunities.

I’ve been a student of product strategy all my life. I like the discovery part most, because it’s just fun. But the strategy part are the most important, and the most valuable career wise.

Best books on learning about strategy:

• Good Strategy Bad Strategy by Richard Rumelt
• The Art of Action by Stephen Bungay