Build What Matters: Delivering Key Outcomes with Vision-Led Product Management

Build What Matters

Delivering Key Outcomes with Vision-Led Product Management

Ben Foster &

Rajesh Nerlikar

Copyright © 2020 Ben Foster & Rajesh Nerlikar

All rights reserved.

Build What Matters

Delivering Key Outcomes with Vision-Led Product Management

ISBN

978-1-5445-1618-9 Hardcover

ISBN

978-1-5445-1617-2 Paperback

ISBN

978-1-5445-1619-6 Ebook

From Rajesh

To my wife, Kripa, thank you for supporting every step of my career and for listening to my endless product pontifications like, How come there isn’t a product that ________?

To my managers and mentors, especially Ben, thank you for teaching me the product management fundamentals that enable me to make products that touch lives in a meaningful way.

To my clients, thank you for letting me be part of your product journey.

From Ben

To everyone who taught me along the way, I can never thank you enough. I can only hope this book helps to pay it forward.

To my wife, Ami, your continued inspiration, encouragement, and partnership made this possible. This is as much your book as mine.

Contents

Introduction

Who We Are

Why We Wrote This Book

I. Making Product Management Work

1. Why Product Isn’t Working

Top Ten Dysfunctions in Product Management

Scorecard

The Commonalities

Action Checklist and Resources

2. The Solution

Being Product-Driven

How To Know Whether You’re Product-Driven

Why Being Product-Driven Matters

Introducing Vision-Led Product Management

Ancillary Benefits of an Inspiring Vision

Action Checklist and Resources

II. Creating A Product Vision And Strategy

3. Key Outcomes

Your Customers Need To Care

Product Management in a Product-Driven Company

Driving Business Results via Customer Outcomes

Choosing the Key Customer Outcome

Choosing the Key Business Outcome

Developing Outcome Pyramids

The Durability of Outcome Pyramids

The Process in Action

Action Checklist and Resources

4. Customer Journey Vision

Writing It Down

Being Bold

Determining Your Time Horizon

Elements of a Customer Journey Vision

Ensuring Competitive Differentiation: The Kano Model

Evolution of Customer Expectations

Communicating Your Vision Clearly

Optional Components of a Vision Document

Action Checklist and Resources

5. Product Strategy

How Will You Get Where You’re Going?

Working Backward

Gap Analysis

Sequencing the Work

Piecing It All Together

Action Checklist and Resources

III. Bringing Vision-Led Product Management To Your Company

6. Creating A Balanced Roadmap

Why Roadmaps Are Valuable

Three Categories of Product Development

Why You Should Allocate Top-Down First

Determining Your Allocation

A Prioritization Framework for Each Category

Action Checklist and Resources

7. The Right Processes

Steps for Identifying the Key Customer Outcome

Steps for Crafting the Customer Journey Vision

Steps for Crafting the Product Strategy

Sharing the Outcomes, Vision, and Strategy

Adjusting Direction

Executing Your Roadmap

Creating and Managing the Product Metrics Dashboard

Action Checklist and Resources

8. The Right Team

Making Your First Product Hire

What To Look For When Making Your First Product Hire

The Value of Homework Assignments

Making Your Second Product Hire

Establishing Design

Scaling a Product Organization

Product Owner versus Product Manager

The Role of Product Operations

Conway’s Law

Organizing a Team of Product Managers

Establishing a Healthy Culture

Action Checklist and Resources

Conclusion: Vision-Led Product Management

How Vision-Led Product Management Solves The Top Ten Product Dysfunctions

Outline For Implementing Vision-Led Product Management

Bringing Vision-Led Product Management To Your Company

Acknowledgements

Notes

Introduction

Product management is a paradox. Consider the following questions:

Does product management deliver outcomes for the business or the customer?

Is product management an art or a science?

Does product management succeed by setting the right priorities now or by planning farther ahead?

Should product managers be held fully accountable for results, or do they lack the necessary authority?

We could keep going with these kinds of questions, but the answer to all of them would still be the same: both! That’s the inherent complexity of product management. It’s the reason so many companies struggle to understand the role, and even the companies who totally get it end up struggling anyway. The paradox of product management is also what makes it so fascinating, and in many ways, it’s why we wrote this book. Guiding success in product management and product leadership, in particular, is the challenge that this book aims to address.

In our work as product management advisors, we’ve spoken to leaders of more than 250 organizations and spent thousands of hours with clients, advising and coaching more than sixty SaaS, enterprise, and consumer tech companies. What has become clear to us through our experience is that product management is hard. It is also one of the most important functions in tech companies, so despite its difficulty, it’s critical to get it right.

We’ve seen some hard-working product teams crash and burn, taking their companies down with them, and we’ve seen other hard-working product teams thrive, leading their companies to phenomenal growth. What makes the difference?

As it turns out, effective product teams have one thing in common: a consistent focus on the customer that allows them to paint a clear picture of the product vision for helping customers achieve key outcomes, which are necessary to achieve business goals. This book is intended to show founders, product leaders, aspiring product leaders, and investors who are seeking to maximize results how to create that consistent customer focus and product vision.

We’ve observed a common theme of companies overemphasizing minor optimizations, which distract attention from the more important question of how to better deliver value to current and future customers in the long run. Without a clear vision of the end-state that they are working toward, the ensuing debates and discussions result in suboptimal outcomes at best, and at worst, can become death spirals for the product or even the whole company.

Consider your own experiences in product management. If you’re a product manager or leader, do you repeatedly struggle to make decisions about what should go in the next sprint? Do you feel like you lack a clear sense of direction for product development? Do you get hit from all sides by people with competing ideas or opposing objectives? If you’re a founder, CEO, or investor, have you observed these struggles on your product team?

Product managers have to deal with a heavy volume of feedback: customers criticizing the product and demanding additional features, engineers bemoaning outdated infrastructure or technical debt, and internal stakeholders with misaligned expectations. Pleasing everyone can be challenging and exhausting, and a lack of direction forces many product managers to make poor decisions. As a result, many product managers find themselves on the defensive, operating as gatekeepers against inbound requests. They react to outside pressure instead of setting an end goal for their product and moving tenaciously toward it.

We believe the best defense is a good offense. To go on the offensive, you must get a step ahead of the inbound requests and set a concrete vision for your product that is grounded in customer research, and build buy-in across the organization for strategic milestones to achieve that vision. That’s the core of the Vision-Led Product Management framework, which we will cover in detail in this book.

Who We Are

We are Ben Foster and Rajesh Nerlikar, and we would like to share our stories, so you understand why we are so passionate about product management.

Ben’s Story

I graduated from UC Berkeley at the pinnacle of the internet revolution. Being in Silicon Valley at that time was an incredible way to start my career. A few years in, when the dot-com bubble burst, most companies were downsizing or going bankrupt, but one big company was still hiring like crazy: eBay.

eBay was growing at an impressive rate due in large part to the leadership of its senior VP of product, legendary tech product mastermind Marty Cagan. In many ways, Marty laid the foundation for modern-day product management: empowering product managers and focusing on results over delivery. Being a product manager there was like being on a dynastic college basketball team with a championship-winning coach. The product improvements I helped deliver yielded more than a dozen patents and drove over $100 million to the bottom line. My years at eBay were a whirlwind experience, and I learned many of the fundamentals I still rely on to this day.

In 2010, I moved to the East Coast and joined an energy-efficiency startup in Arlington, VA called Opower, where I met a talented product manager named Rajesh Nerlikar. As VP of product at Opower, I brought my Silicon Valley leadership experience to the company and, more broadly, to the D.C. region. During my tenure, Opower grew from an early-stage startup to a successful growth-stage SaaS company and then to a thriving publicly traded company valued at over $1 billion.

Wanting to share what I’d learned with the leaders of other companies, I spent the next four years as a product advisor for more than forty tech companies, laying the groundwork for what would eventually become the product management advisory firm Prodify. Through my time at these companies, I observed similarities among successful product teams. The ones that achieved amazing outcomes tended to connect their own business success back to customer outcomes, while those that struggled seemed to exhibit a wide range of unhealthy patterns.

Seeking to apply the frameworks I had established in my advisory positions, I returned to operating roles, first as chief product officer of the SaaS company GoCanvas, then at the consumer wearable company WHOOP, where I am currently chief product officer.

Rajesh’s Story

I cut my teeth as a software engineer and startup founder before stepping into my first official role as a product manager on Ben’s team at Opower. While there, I learned the foundations of customer-centric product management. I went on to become senior product manager at HelloWallet and then Director of Workplace Products for Morningstar, where I managed a $40 million product portfolio with a team of twenty people, which included product managers, technical project managers, and product operations/support. I’m now serving as the VP of product at Savonix, a Prodify client and healthcare startup in the Bay Area focused on fighting dementia.

My journey to product advisor and coach started at the Chicago tech and entrepreneurship accelerator 1871, where I enjoyed sharing the product lessons I’d learned with early-stage startups and found myself learning a lot in doing so. When I moved to Austin, I reached out to Ben, and we started working together again, helping other product teams succeed. Eventually, he became CPO at GoCanvas, and I took over the advisory work and operations at Prodify.

Why We Wrote This Book

Through our experiences, we’ve seen numerous examples of amazing product management, but we’ve also seen far too many companies limping along with unclear decision-making and muddled ideas. Some great products and promising startups have circled the drain when they should have been building what matters. Through our advisory work at Prodify, we’re aiming to make a difference for tech companies with untapped potential, so we created the Vision-Led Product Management framework and wrote this book to codify all of the best practices we’ve shared with clients in a way that would be both understandable and actionable.

In the following pages, you won’t encounter random musings on product management or career advice for product managers. Instead, we aim to provide expert guidance to strengthen your product leadership mindset and maximize the impact of your product development efforts.

We’ll share best practices for putting together an effective team aligned with your vision and implementing repeatable processes to achieve it. You’ll also learn how to conduct customer research and make it a habit for your product team. After all, a great product vision can’t be based on guesswork alone, nor can you create it solely within the four walls of your office or over Zoom.

In each chapter, we have included stories from our own successes and failures in product management. Along with our own stories, we will share client case studies so you can see these concepts in action. While we will refer to a few well-known product examples from established companies like Amazon and Tesla, our focus throughout the book is on real-world tech companies that look much like your own. Through these firsthand accounts and client case studies, we will help you understand the application of key points in the book.

In the end, we hope to give you confidence in determining the how and why of your product development efforts, so you can drive better outcomes for your customers and your business. As you develop an increasingly coherent end-state vision for your product and the ability to communicate a strong rationale for your development priorities, you will strengthen your position as a product leader.

Making Product Management Work

Chapter One

Why Product Isn’t Working

Happy families are all alike; every unhappy family is unhappy in its own way.

—Leo Tolstoy, Anna Karenina

We see hard-working product teams struggling all the time, even under the best of conditions. While there are many things that can go wrong, we’ve identified the most common dysfunctions in product management. If some of these seem familiar, then this is the book for you.

Top Ten Dysfunctions in Product Management

Here are the top ten dysfunctions in product management from our perspective:

We’ll delve into each of these dysfunctions so you can see if they are representative of the challenges you’re dealing with in your company. You may find you’ve experienced most or even all of them at one time or another. Rest assured that doesn’t signal incompetence or imply your product team is deficient or unskilled. On the contrary, these issues are so prevalent that almost everyone who has worked in product management will have struggled with them at one point or another. As you read each of them, mark which ones ring true at your company.

Pattern #1: The Hamster Wheel

On a hamster wheel, all that matters is continuing to run, even though you’re not getting anywhere. Similarly, we find that sometimes product teams are almost entirely focused on hitting deadlines with little regard for the outcome. When desired outcomes are unclear or difficult to measure, leadership tends to concentrate on output instead, but what’s the use of spending months developing a product that no customer wants or is willing to pay for, whether you hit the deadline or not?

If you’re delivering the wrong thing, it doesn’t matter how efficiently or quickly you deliver it, and your output isn’t necessarily meaningful or beneficial unless you’re creating value for the customer or the business.

Compare these two questions, and you’ll see the difference in perspective.

Did you ship that feature on time? (output-oriented)

Did that feature deliver value to customers and grow revenue? (outcome-oriented)

Ben’s Story

Measuring Lines of PRD

During my time at eBay, from 2001 to 2005, product management was run by a few different leaders. When I first joined as an entry-level product manager, Marty Cagan was leading product management and design, and there was a true appreciation for the innovative role that product management played. After he left, the engineering leader stepped in to fill his shoes. Her perspective was that product management’s job was to feed the engineering beast, producing volumes of product requirements documents (PRDs) that would keep thousands of developers busy. The joint product and engineering team became extremely efficient at delivering lots of code, less so at delivering consistent results.

With no clear way of holding product managers accountable for outcomes, she defaulted to pure productivity metrics. Product managers were actually issued a quota for lines of PRD written per quarter, and that quota was increased each quarter to demonstrate productivity gains to the COO.

The consequences were predictable. Product managers worked excessively long hours to produce monster PRDs for overdesigned features. I personally wrote a 240-page PRD that required an entire week of meetings to hand off to the engineering team. Looking back, I’m confident the same results could have been delivered with a simplified product design and less documentation, which would have saved engineering capacity and allowed us to address the next business opportunity. Believe it or not, at the time, I was actually proud of myself. In what should have been a teaching moment, I was applauded for the time I put in and the amount of work I created for others.

Pattern #2: The Counting House

In the counting house, the focus is entirely on internal metrics with no regard for customer success. Many product teams become obsessed with internal metrics like revenue growth, monthly active users (MAUs), and customer retention. Sometimes, they even fabricate new metrics because they’re convinced that if some internal number looks good, it must mean the product is a success.

The truth is, most internal metrics are trailing indicators of a product’s success, and therefore shouldn’t be the primary focus of product management. It’s far better to answer the question, How can we effectively deliver greater value to our customers? If you can answer that question and create a good business model around the answer, your internal metrics will almost always follow suit.

Pattern #3: The Ivory Tower

In the ivory tower, product teams become so removed, so far above the customers that they start thinking they know their customers better than the customers know themselves. Consequently, they never really talk to their customers, which means they risk building a product no one wants or needs.