We’re running a business, not a technology company

One thing I always try to remind myself of, is that in the end, my job is to make the business successful. Product Management is a business optimization function. In short: get the most valuable products to market with a limited set of development resources to generate enough revenue to meet or exceed the business goals.

Now, given we work in technology, there is a lot of pressure to “innovate”, to create new technological differentiation against competitors, to develop the next “big thing”, or produce a new or novel offering that can be positioned uniquely in the market.

And, while there is nothing wrong with any of that, it is important to remember that although those things may be important, they are not paramount. The most important thing to do is address market needs more effectively than anyone else. This could mean doing the more mundane things like playing well in their existing environment, or providing platform support, or creating command line tools, or making sure the products are easy to use.

None of those things may seem all that exciting or novel, but they are important to customers who must use these products to meet their business objectives. There is no point creating a unique product showcasing great technology that few people want to buy.

Keep in mind that technology changes much faster than many people’s abilities to accept that change, and one of the best things you can do for customers is to actually help them mitigate that change where possible.

Case in point. Back in the early days of Java, I was product manager for a line of Java components. Java was growing and changing quickly and Sun was deprecating APIs regularly. One of the things we did was to provide consistent APIs to our customers so that as they moved from Java (1) to Java 2, they didn’t need worry about those changes from Sun. In short, we provided them a layer of insulation from the underlying technology changes. This was hugely valuable to customers and helped our business as well as our reputation as a company that delivered real value to them.

In the end, optimizing for the business success, and NOT simply technological leadership, should be the goal of every product manager.

Saeed

I found my voice, but I didn’t scream

An update on the case of the missing voice.

After spending all of Thursday being as silent as possible, feasting on virtually nothing but hot soup and udon, and using virtually every sort of non-prescription remedy to better my condition, I woke up Friday morning with a working, though far from normal voice. It was hoarse, raspy and about 1/4 of it’s normal strength, but it was functional.

So with that ability, I went to the conference and got miked up for my talk. The talk went over well I’m happy to say, and I got some good feedback from some attendees. “Very original” was probably the best comment that I feel I received

I do want to take this opportunity to give a sincere thank you to Michael Hopkin. Michael was a speaker at the conference (he gave a good talk on Leadership for Product Management) and is a reader of this blog. On Thursday, hearing of my predicament, he offered to be my voice if needed on Friday. I really appreciated his offer, as we had just met. That was plan B for me. It would have been interesting to try but I’m also glad my voice returned.

Saeed

What’s the deal with Software Product Management?

OK…this one has been bubbling inside me for a while, and tonight I decided to lay it out and see what feedback comes in. I’ll put on the flame proof suit now.

In our little world, we (Product Managers) think we are all that. We view ourselves as a critical component of the software development process.

How would developers know what to do if we weren’t around to provide market and product requirements?

How would the “sales droids” make their quotas without the help of Product Managers on those big deals?

Who else could define a coherent product strategy that is both aggressive in the market but achievable with limited resources?

Who else has the ability to be as technical as the engineers, as sales-savvy as the sales team and as hip and aware as the marketing team?

We are so dynamic, we can think strategically when needed, but can switch into tactical mode as the inevitable fires need dousing.

Yup, we’re definitely cut from a special stone.

Perhaps we are what we think we are and have the impact that we think we have in companies.

If that is the case, then let’s look at ourselves honestly and ask:

• Why is it so hard to find a standard or generally agreed upon definition of what Software Product Management is across the industry?

• Why are there really no formalized education programs for Product Management?

• How can a 3 day training course even begin to prepare someone to be a product manager?

• Why are our blogs and books filled with an endless supply of “tips and tricks”, as if that is the route to success?

• Why do people think that a smart sales engineer will automatically make a good product manager?

• Why do so many senior managers think that hiring lots of engineers is more important than hiring a few more product managers?

• Why are so many PM consulting firms selling templates and spreadsheets that are both “comprehensive”, yet “fully-customizable” and that enable you to “increase your professionalism”? Really? Is that what will make us successful?
  

If we take a step back and look at our profession, there are many other questions like this that are left unanswered. I wrote a bit about this topic previously in Product Management Maturity and If we’re so smart.

Think I’m being hard or unreasonable? I don’t think so. I’ve been in Product Management for over 10 years and I’m not looking to jump ship yet. I want to see if we can accelerate the process of maturing this field and helping those who are looking to become product managers avoid the struggles we “veterans” have faced.

What have we done in the last 10 years to make our lot better? And I don’t just mean incrementally better. I mean significantly better.

Software Engineering has really evolved in the last decade. The latest greatest things right now seems to be Agile/Scrum methodologies and mature development management tools. Sales and marketing both have matured as well.

Certainly marketing has taken a big leap forward given the integration of the Web and. in particular, hard analytics into the marketing process. Branding, positioning and other traditional marketing activities are still important, but the potential sophistication of marketing today is an order of magnitude above where it was a decade ago.

Selling still retains a lot of it’s old characteristics. Certainly there is no electronic replacement for a good relationship with a buyer or prospect. But sales automation has improved and there are a lot of mature and time tested sales methodologies to choose from.

And then we come to product management. What have we done in the last 10 years to really improve our profession and define ourselves to those around us? Given that there still isn’t some well understood definition of what we do, I’d say we haven’t done enough.

Instead of getting all hot and heavy about the latest development methodology, let’s develop our own well defined, clearly beneficial and easily understood models for product management. No one else is going to do it for us.

And a few years from now, if I’m still writing this blog, I’d hate to have to look back at this post and say, gee, not much has changed has it.

Saeed

Agile/Scrum Software Development and Product Management

I think ours is the only Product Management blog in the entire blogosphere that has not yet had at least one post on Agile/Scrum software development. That is….until now.

I’m not so sure it was a conscious decision on any of our parts. There is so much other good and relevant stuff to write about, like iPhones and iPods for example.

But seriously, I don’t think we have written about Agile because, and I’ll speak for the 3 of us, it’s not that critical to product management. There I said it!

NOTE: where I use “Agile”, it implies a combination of Agile/Scrum

If you are not familiar with Agile or Scrum software development, you can read more in many locations on the web. A good starting point is, as expected, Wikipedia. Read up on both Agile and Scrum methodologies. While quite distinct in many ways, it’s important to understand both Agile and Scrum and how they are inter-related in practice. In fact, the first line of the Wikipedia entry on Scrum reads:

Scrum is an iterative incremental process of software development commonly used with Agile software development.

While not an absolute definition, and clearly some may argue, I view Agile as more of a culture or approach to software development, whereas Scrum is more truly a methodology, with specific roles, practices etc. that can be implemented. In many cases, when people say Agile, they imply Scrum as well.

As mentioned earlier, Scrum defines a set of roles. One of the key roles in Scrum is the Product Owner. That role is defined as:

The Product Owner represents the voice of the customer. They ensure that the Scrum Team works with the right things from a business perspective. The Product Owner writes User Stories, prioritizes them, then places them in the Product Backlog.

Now, this would most likely map to the Product Manager in most software companies. While true at a high level, another key element of Scrum is the daily scrum meeting where every member of the team, including the Product Owner attends.

Now, imagine if you as a Product Manager had to attend a development meeting every day. When would you get out of the office? When would you meet with customers, partners, prospects etc.?

One big mistake a lot of people make is assuming that the Product Owner has to be the Product Manager. While conceptually that may be true, the Product Manager cannot, and in my opinion, should not attend these daily scrum meetings. I’ve worked in PM role in two previous companies that used Agile/Scrum development methodologies, and I think I attended one Scrum meeting. We still had regular communication with the development teams and regular product reviews etc. but we weren’t embedded into the development process the way some people might think we should be.

Other roles such as Product Designer need to be defined to take that day to day decision making role and act as the Product Owner, or at minimum, be the proxy for the Product Owner (if that is the PM) so that the PM doesn’t get bogged down by daily scrum meetings.

Keep in mind, Agile/Scrum is a DEVELOPMENT methodology. It is a great model for developers and engineers and other R&D team members to work and communicate more efficiently. There are very clear benefits to this model. It provides greater visibility into current work status, work remaining, can identify development hurdles earlier and can communicate them outward more easily.

But, in the end, it is still a development methodology. It should have minimal impact on Product Management’s job as a cross-functional leader marshalling the product from development through marketing, sales etc.

Here’s an analogy. Sales teams invariably follow some kind of sales methodology. It could be strategic selling, solution selling, or conceptual selling. It could be some other model, or even none at all. If the sales team decides to adopt or change their sales methodology, do other related teams like Marketing or Product Management have to change how they work?

The answer is NO. So, then why should those changes happen to Product Management if the development team adopts Agile/Scrum? Our job remains the same. Understand the market, customers, competitors, merge that in with business objectives etc. define what needs to be built and move that through all the stages of development/launch/post launch to enable product success.

If in a few years, some better development methodology comes along, and is adopted by the engineering teams, will that change what Product Management does?

NO.

Development methodologies should be a grey box for Product Management. We should have an understanding of them, but we don’t need to become an “embedded” part of their implementation. It’s all about loose coupling and clear lines of communication. We have our objectives, and Development has theirs, and when we need to interface, we do so in an efficient and mutually convenient manner.

Let me put it this way, and pardon the analogy if it is a bit inappropriate. Product Management and Development don’t need to be married to each other to be efficient. The relationship needs to be more like a “friends with benefits” arrangement. i.e. the two hook up on a regular or as needed basis.

Saeed

Why is innovation hard for large organizations?

I came across an interesting post on this topic, and I have to say, that I really agree with what the author, Kareem wrote. In it he mentions three key reasons for the general failure of large companies to innovate:

1. They must protect their current business
2. Too much bureaucracy or too many stakeholders in the process
3. They don’t provide the proper financial incentives for innovation.

I’m sure most of us who have worked in larger companies have experienced the first two. I’ve also seen a lot written about the first two points related to big company culture, management practices etc. People today cite Apple as a great example of a company that has figured out how to deal with those two points.

I want to spend the rest of this post talking about point 3, which I think is critically important and of which I have not seen as much writing.

In any general cross-section of employees, there will be a small subset who can be deemed as truly entrepreneurial and innovative. A lot of them probably come from the Product Management and Engineering teams! And most of those people are smart enough to understand the value they can bring to a company as well as to themselves if they can deliver a successful product to market.

The problem is, in a typical large company, the ROI proposition for bringing an idea to market is completely skewed in favour of the company. Kareem says it really well in his article:

People are incredibly quick to learn which behavior is rewarded in any system. If you want to innovate, there are two options: remain in a system that pays out an annual salary and a relatively meager bonus for your awesome product. Or, strike out on your own, and build a product that might have a significant pay off, while living off savings or investment.

Now imagine a large technology company that has set aside a large pool of money for acquisitions. That number could be in the hundreds of millions of dollars or even higher. The company wants to make acquisitions that help bolster it’s current market position as well as take it into new (likely adjacent) markets.

There are probably lots of innovative startups out there, working on new products that are potential acquisition targets. Now as the company is out there evaluating the market and potential targets, and then spending big bucks to acquire those companies (likely making the founders of those companies wealthy), what are the innovators inside that company thinking?

They are thinking:

“Hey, how do I get me some of that?”

Now imagine if the company took, say, 5%-10% of that acquisition pool and used it to create a fund that would invest AND if successful reward new innovative products by employees. The structure of how this would be done would have to be worked out carefully so as to ensure transparency in the process of who got funded, and clarity in how success was measured and rewarded, but in theory it is possible.

I can think of at least one model, where an quasi-independent group would review the ideas and decide how to provide an internal equivalent to angel/seed funding to get the project to a stage where it could be evaluated in detail. This model would be no different than what one would face if they took their idea to an Angel or VC for funding.

Regardless of how it is done, there could be significant advantages for the parent company by doing this.

• It sends a very clear message that existing employees can see significant upside if they are major contributors to success in the company
• It significantly reduces the potential for “brain-drain” in the company, by stopping some of the best innovators from leaving to form new companies outside
• It provides a lower cost option for the company to “acquire” new innovative products than going out to market and paying a premium for “hot” acquisitions.

The return for the employees who go this route would be lower than what they might get if they were to strike out on their own, but then again, the risks they would face would also be lower. They could leverage many of the large company’s resources as well as the large customer base of the company. While some hardcore innovators may not like this situation, I’m pretty sure many others would.

Imagine an incubator, funded by the large company (and possibly by other external investors as well) that would provide the environment for these ventures to develop, grow and ideally graduate and become successful. If the venture is one that the large company wants to acquire, they can do so relatively easily given their stake in the company. If they don’t want to acquire the company, the market can decide the value of the company and like any other VC, they can regain their investment (and much more) by some kind of liquidity event.

What do you think of this? Is it possible for large companies to develop incubators for their own employee’s to create innovative products and companies? Or are there other issues and complexities that would make this concept more likely to fail than succeed?

Saeed

What’s the opposite of “analysis paralysis”?

I was discussing something with Alan today and during the conversation he said something like:

Well, you don’t want to get stuck in analysis paralysis but you don’t want to go to the other extreme either.

So, I though to myself, “What is the other extreme? Does it have a name?”

We all know that “analysis paralysis” is the state where one cannot make a decision because they get stuck trying to figure out all the possibilities. I’ve seen it happen in people a few times, and it can be painful to watch, as they hum and ha and try to figure out what is the right decision.

On the other end of the scale are those situations where a decision is made by someone with little or no debate, research or analysis, and the person is convinced this is the only, or possibly the best of all options. This to me is the opposite of analysis paralysis.

I call this state “utopia myopia“.

Essentially, a very limited perspective is used to achieve a theoretically ideal outcome, ignoring other perspectives or outcomes. This is very common when discussing new product ideas or solutions to problems. There is always a small number of people or sometimes a sole individual in the group who has a very strong opinion of what to build and why, and will not change their view, nor will they agree that additional research or investigation is needed before a final decision is made.

I once worked for a company where the CEO had a real disdain for market research and said at a planning meeting:

There’s no value in doing research. By the time you do your research, you could already have finished building the product.

Needless to say, that company was not very successful at all.

So, that’s my contribution to the English language this week. Use the phrase if it applies. For example, if someone is stuck on some idea and won’t budge. say:

You know what, you’re suffering from utopia myopia, and you really need to broaden your perspecitves.

Watch how they react, and drop me a line and let me know what kind of response you are getting when using this phrase.

Saeed

How much revenue for each PM in your company?

Someone asked me a question recently and I couldn’t find an answer on the Web, so I decided to ask all of you for help.

After reading my article, “You can never have too many Product Managers“, the person asked me whether I knew of any published numbers that provide guidelines for the number of product managers a company should have relative to it’s revenue.

The answer is, unfortunately: it depends.

It depends of the stage in the lifecycle of the product, the market, the kind of customers etc.

To get data, I need your help. In return for 30 seconds of your time — that’s all it will take I promise — I’ll collect the data and share it back with all of you in a future post.

Survey is closed. Click here for the results.

Thanks.

Saeed

Seth’s Advice for Product Managers: Quit Now

Seth Godin gives some advice to real estate agents. Allow me to paraphrase his advice for Product Managers:

Here’s my best advice (everyone knows a product manager or two, so feel free to forward this along).

Plan A: You should quit being a Product Manager. I’m serious.

Quit being a PM. Get a job doing something else.

Some of you have been waiting to hear that. My pleasure.

…

The ones that are left, that’s you, can consider Plan B:

If you’re not going to be able to make a living by helping sales, by checking to see which bugs have been fixed, by using the never-ending ream of support calls to answer, then what are you going to do? Whining is not an option.

In fact, I think this is an extraordinary opportunity for you.

As [Seth] wrote in The Dip, you’re either the best in the world (where ‘world’ can be a tiny slice of the environment) or you’re invisible.

So become the best in the world at understanding your customers. This means being Draconian in your choices. No, you can’t also do a little of this or a little of that. Best in your world means burning your other bridges and obsessing.

You become the source of information, the watercooler, the person to turn to.

“I have no time!”

Of course you have that time available. Remember nine months ago when you were three times as busy with sales calls as you are now? Invest that time in building up your expertise and becoming the person people who don’t even like you turn to for insight.

The opportunity is to reinvent the way you interact with current users, with prospects, with the mildly interested and with your past clients. The opportunity, in other words, is to stop waiting around for the phone to ring and instead figure out how to do what you do best… connect users and developers in a way that makes them both confident.

Some of you will stick with the standard business card with the standard photo, the standard office and the standard feature request strategy and the standard approach to making the phone ring. It’s going to be a long haul if that’s your route.

I’m betting, though, that the best of you will end up with a product that will survive, thrive and prosper. Best time to start is right now.

Little features and a lesson for Product Management

Today, while working on a different blog posting (to be posted soon), my browser, Firefox, froze. I use FireFox almost exclusively these days, mostly because it works well, and I really like the tabbed browser-window interface. I do a lot of multi-tasking via the web browser, and the tabbed interface makes it very easy to jump back and forth between contexts as I multi-task. Try that with the other dominant browser.

Yes, I know there is some toolbar or something for IE 6 that will do this and that IE 7 has it built-in, but FireFox has had tabs for a lonnnnng time, so I prefer it. And while the tabbing feature is great, that’s not the only little feature I want to discuss.

Firefox has another new feature, not sure when they added it, that will restore the full prior state of Firefox on the next launch, if it had shutdown unexpectedly.

(click to see the whole dialog)

How awesome is that? Well, let me tell you…earlier this evening I was working on a blog posting, typing right inside the WordPress editor, when, as I often do, I switched to another tab to look for some info. I clicked a link on that other page, and then the browser froze. And I mean froze. After waiting a minute and still not having a responsive browser, I had to kill the process in the Task Manager.

Somewhat annoyed at not having saved my brilliant blog posting, I reminded myself that I needed to regularly save my work.

But, when I relaunched Firefox and clicked the Restore Session button, to my amazement, there was the entire post in the WordPress editor, exactly as I had left it. It was not saved in WordPress, but Firefox had brought it back. Awesome. Saved me a bunch of time and yet another reason to continue using Firefox.

So, what’s the lesson for Product Managers?

Keep the user’s experience front and center!

I’m sure the tabbed interface and the Restore Session features were fairly easy to implement relative to other tasks such as accurate rendering of markup, script execution, addressing security issues, dealing with plug-ins etc. And while those are important things to work on, they are expected “buying features” for users. But the unexpected, particularly the ruthless efficiency of something like Restore Session, is what will clinch the deal with many users.

Yet, these kinds of features are often traded off when negotiating with development.

Do you want the security problems fixed or do you want the restore? We can’t do both.

Granted, an open source product like Firefox doesn’t necessarily have to make those trade offs, but for business software, that is not the case. Get your engineers to understand the value of having the product outperform expectations, and task them to help identify little gems of functionality that can be implemented to make users rave about your products.

Saeed — Raving Firefox fan, starting today.

Product Managers need time to breathe…

I’m going to make an assertion here, and please correct me if I’m wrong.

I believe that the vast majority of software product managers are running full tilt in their jobs, caught between the short term tactical cross-functional activities (working with Dev, Sales, Marketing etc) that are thrust upon us, and the important long term market research, business and product planning activities that are fundamental to managing successful products.

Do you agree? Disagree?

Companies want Product Managers to innovate, take bold steps, define new products, enter new markets, yet at the same time deal with all the day to day operational issues that arise and need to be dealt with. I’m surprised more product managers don’t burn out after a few years. Or perhaps they do, and like the trees in the forest, we’re not there to witness them fall.

There’s an interesting post on Innovation at IdeaChampions.com. Entitled, INNOVATION is an INSIDE JOB, the article makes several good points, but the key one is:

Organizations do not innovate. People innovate. Inspired people. Fascinated people. Creative people. Committed people. That’s where innovation begins. On the inside. The organization’s role — just like the individual manager’s role — is to get out of the way.

I couldn’t agree more. A lot of companies want to be innovative, but unintentionally put barriers in front of those best suited for the job by never really getting out of the way. It’s difficult to be inspired, fascinated and creative, if you are constantly required to focus on the short term needs of other teams. How can one extricate themselves so they can get out and learn and think and postulate and research and conclude and innovate?

One solution which I wholeheartedly support is to create Product Management teams who are responsible for delivering the goods. The teams can be structured in different ways. You could combine business focussed PMs with technically focussed PMs or you could split the PM responsibilities across functional areas of larger products. There are likely other ways to split up the responsibilities.

But the goal is to get to a level where the teams can work in a pipeline or leapfrog manner. i.e. while one team (team A) is focussed on bringing a release X to market, another team (team B) is out researching release X+1. Once release X is GA, team A can focus on researching release X+2, and team B is working to get release X+1 developed and out the door.

Now, before you start thinking — hold on a minute, how many product managers are we talking about here? — ask yourself a couple of questions:

• What impact does Product Management have on your company?
• Could it have a higher impact on optimizing Development, Marketing and Sales with a small increase in headcount?
• How well could your company execute if you had deep market knowledge, clear understanding of user AND buyer needs, through competitive information and requirements that were complete, accurate and timely?

If you answered, “Significant”, “Yes” and “Much better than we are now” to those questions respectively, then think about defining product management teams in your company. Give them the time and tools they need to do a first-rate job, and then hold them responsible for it.

Challenge the teams to leapfrog each other in functionality, performance, scalability etc. The teams should view each other in a competitive manner. Why? Because your competitors are looking at you this way. They are trying to leapfrog you. They are looking at your weaknesses and trying to exploit them. They are going to try to out market and out sell you. Why not look at yourself the way your competitors look at you and beat them at their own game?

This may sound a bit unconventional but it works. Intel did this for several generations of their microprocessor chips. They had parallel teams working on successive generations of chips. Each new generation of CPUs (e.g. 286, 386 etc.) was to eclipse the previous generation. Not only did Intel make significant performance gains from one generation to the next, they kept upstart competitors like AMD playing a constant game of catch up.

Both AMD and Intel are successful companies, but which would you rather be? Why not take a lesson from an industry giant like Intel and apply it to your company?

Saeed