Shifting the Focus from"Doing Things Right" to "Doing the Right Things"
The Product Industry is at an inflection point. Over the past 10-15 years, the Product Management has emerged as a real profession and the industry has seen a great impact as we have gotten very good at building products. That being said, we still have a high failure rate for new product initiatives that is unacceptable. Just being good and efficient at building products right is not enough. We now need to shift the focus to doing the right things. This is a shift from Product Management to Product Leadership, from doing things right to doing the right things right. Let’s explore how we got here and what we can to address The Product Leadership Imperative.
The Golden Age of Product Management – Product Management as a Profession
Over the past 10-15 years, we have really experienced the Golden Age of Product Management. While the concept of Product Management for all intents and purposes was created in the 1930s, starting in 2005 and through present-day, the profession of Product Management and the Product industry has really be established. Through this period, we have gotten very good at Product Management. Once we have identified an opportunity for a product, we have become much better and more efficient at taking the opportunity from idea to product, and the products we are building are better than they have ever been. Through frameworks like Pragmatic Marketing, Stage-Gate, and the Lean Start-up we have built product management models and processes that help us more efficiently deliver better products. Through User-Centered Design and similar approaches, we have put the user and their needs at the center of our design and product. Through development methodologies like Agile, Scrum, and Scaled Agile we have improved the output and efficiency of our development organization. And certified project managers from PMI have helped us better manage projects and programs across our companies to align our efforts and ensure the timely delivery of these projects. We have become very good at “doing things right.”
The Elephant in the Room – Unacceptable Failure Rate of Initiatives
Even with this Golden Age of Product Management, there is an elephant in the room, the unacceptable failure rate of new product initiatives. Clayton Christensen in The Innovator’s quoted research that 60% of new product initiatives are scuttled before they ever reach the market, and of the 40% that do make it, 40% fail to become profitable. That is 76% of new product initiatives that never make a profit. (See an excerpt here http://tiny.cc/cioinnovatorssolution). Those numbers align well with the research that shows that 75% of venture-backed start-ups never return money to their investors - 30-40% are liquidated losing all of their money. (See the article here http://tiny.cc/fastcompanyvcfail). We are building a lot of things - and building them better and more efficiently - but based on these numbers, we are not always building the right things, chasing the opportunities that have the best chance of success.
How does this happen?
Inside Out Companies and Products
One of the most common reasons product initiatives fail is because companies are “Inside Out.” I call this the Field of Dreams approach – “If you build it, they will come.” This is the practice and belief that because you built it customers will naturally want it. Sometimes these are technology or engineering-driven products, building something that is cool or uses a new technology just to use it. Other times they are based on a dated understanding of the market, or simply a single anecdote. Either way, they did not come from full knowledge and understanding of the market. These are often the products that end up searching for a market, or more likely failing altogether.
Sales Driven Companies and Products
Another reason product initiatives fail is that they are Sales Driven - we let a large customer, one-off contract commitments, or a sales leader dictate our product roadmap, not the needs of the market. This was exemplified at a B2B Information company I used to work at where a VP of Sales actually said this “If Boeing asked us to sell them forks, and the deal was big enough, we would find a way to sell them forks.” Luckily, our leadership never let him put silverware on our product roadmap.
The Build Trap
A third reason product initiatives fail is the idea of the Build Trap, captured (and named) so well by Melissa Perri in her book The Build Trap: How Effective Product Management Creates Real Value (2018, O’Reilly). In the book Melissa talks about how companies have created and gotten stuck in the momentum- and measurement-based “build trap,” where they continue to crank out features primarily to meet schedules and objectives, rather than focusing on building the right things by the needs of the market. Actually, it was when reading Escaping the Build Trap that I started thinking about the concept of The Product Leadership Imperative. (Buy it here if you are interested https://amzn.to/3ggZn11).
Product Leadership vs. Product Management
How do we define the difference between Product Leadership and Product Management? Early in my career, there was a story in Stephen Covey’s Seven Habits of Highly Effective People that really resonated with me. An exploration team was cutting its way through a thick forest and making good time until someone climbed up a tree and realized something was wrong. They called down “Stop - we are going the wrong way.” And someone from down below called back “But we are making good time.” This was the first time I understood the difference between leadership and management. Leadership is about going the right way, while management is about making good time. Warren Bennis captures this perfectly: “Managers are people who do things right and leaders are people who do the right thing. Both roles are crucial, and they differ profoundly. I often observe people in top positions doing the wrong things well.” This truly defines the opportunity I am talking about – we need to shift our focus from management “doing things right” and shift it to leadership “doing the right things.”
The Product Leadership Imperative
Often when working with business leaders, I ask the question, “does anyone have more resources than they have ideas or opportunities?” From CEOs to CHROs, to CPOs to product managers I have never had one person answer yes. Every company has more ideas and opportunities for where they can allocate resources than they have resources. Even the unicorns who have hundreds of millions of dollars in funding struggle with hiring the right talent and have their limits. In a world where we have more ideas and opportunities than we have resources -- in a world where 76% of new product initiatives never make it to market or make a profit -- the major problem we need to address is not continuing down the “doing things right” path. Rather, the biggest problem we have is this need to shift our focus to “are we doing the right things?” This is the Product Leadership Imperative – focusing the product industry on the leadership aspects of doing the right things. Doing a better job of aligning our corporate strategies, market and product strategies, and go-to-market strategies to ensure we are not spreading ourselves too thin or “peanut buttering” our resources and making tough decisions in portfolio allocation and product lifecycle management. Choosing to focus on specific market segments where we can deliver tangible value to customers and markets, rather than trying to be all things to all people and not delivering much value to any of them.