A colleague recently shared a video entitled “Escaping the Build Trap”[1]. This video was the keynote address in the 2018 Productized conference. In the keynote address, Melissa Perri discussed how to build organizations that thrive off of product management. The talk is in part based on her book, Escaping the Build Trap: How Effective Product Management Creates Real Value.
Full disclaimer, I have not read the book, nor am I a product manager. I have temporarily stepped into the role of product manager at several companies to fill gaps and I’m still trying to decide if it’s worth investing in reading her book.
The keynote covered a fair number of topics including Agile, strategic frameworks, and what it means to be a product-led company.
The point that really resonated with me was when Melissa talks about the build trap. When an organization enters a build trap, they start producing features or products without really understanding what value it brings to the customer. Oftentimes they are building new features just for the sake of pushing features out. I have seen and been in several companies that have entered this trap. Sometimes, it originates from engineering needing work. Engineering is often the most expensive operating cost. So, when engineers are not working on new features or products for customers, this can make leadership nervous. Now, this isn’t to say that engineering is sitting idle, they can be working on reducing technical debt or improving processes. More on this later. If a company lacks an overall vision, this can also contribute to the build trap. With no overall vision and strategic framework laid out, individuals will have different ideas on the direction of the company. This can lead to initiatives being pushed from many different directions, placing the company on many simultaneous paths.
The issue I have with this keynote address is when Melissa states that in order to escape the build trap, one must create an organization that is product-led. This single focus on being product-led is, in my opinion, dangerous for a company. A company should balance many factors when developing a strategic framework.
In defining what product-led means, Melissa goes onto explain what not being product-led means by defining three other types of companies:
- Sales-Led - Sales-led organizations are organizations where the sales team is selling ahead of the road map. I understand this to mean that the sales team are promising features or products that don’t necessarily exist in the present.
- Visionary-Led - Visionary-led organizations are based on someone’s view of the vision and when that person leaves the company, the question becomes how do you sustain the vision.
- Technology-Led - Technology-led organizations are “all about the cool tech”. They are organizations that work on building out cool “tech” which doesn’t necessarily have value to the customer.
These alternatives are all presented in the extremes and in the presentation it’s made to seem that you are either product-led or one of these other extremes and I think that is dangerous. Why is this dangerous?
Let’s examine what happens when companies are not technology, visionary, or sales-led. Starting with technology, a recent example comes to mind. If anyone had the pleasure of traveling during the 2022 winter holiday season in the United States they either experienced or witnessed the meltdown of Southwest airlines. Although a large winter storm caused initial flight distributions for Southwest and many other airlines, it was the company’s severely outdated internal software system which prevented the company from recovering from the initial storm. The company had neglected to update its outdated crew-scheduling technology. When the storm hit Southwest was unable to track where its crew and planes were. It took Southwest eight days to recover, having to cancel a significant number of flights during this time to reset the system. This is what happens when a company is not, in part, technology driven and tries to scale.
I can’t say that this happened at Southwest; however, I’ve seen other organizations declining to pay down technical debt because there is no immediate correlation to increased profitability either due to increasing number of users or extracting more revenue per user. Technical debt is not seen as creating immediate value for customers. The Southwest meltdown will cost the company around 1 billion dollars[2].
What happens when a company isn’t, in part, visionary-led? A particularly good example of what happens to companies that lack vision is Eastman Kodak. Kodak is best known for developing film for analog cameras. During the 1970s, Kodak was responsible for 90% of film and 85% of camera sales in the United States. They were a dominant player in the area of analog film and were responsible for bringing photography to the masses. Despite the fact that a Kodak employee (Steven Sasson) developed the first handheld digital camera in 1975 and another employee (Larry Matteson) predicted the shift to digital photography, company executives lacked the vision and willingness to shift to this new technology. Kodak’s inability to have a vision for what the future of photography looked like, led to the slow adoption of digital technology. This is widely considered as the major factor which led to the decline of the company. In 2012 the company filed for bankruptcy.
A company can have a strong visionary leader and a well laid out vision and still encounter troubles. This can occur when there is lack of cohesion or buy-in of the vision across the company. The Harvard Business Review has an interesting article on the impact of (not) aligning managers on the strategic vision of a company[3]. When managers are not aligned with the strategy this can create confusion and uncertainty for employees.
Sales is an important information stream for a company. The sales team often understands the competitive landscape. They are the ones listening to the customer in regards to how a company product compares to the competition. The sales team is often a funnel for new feature requests by the customer.
In the keynote address Melissa states that sales-led organizations are selling ahead of the roadmap. I interpret this to mean that sales are promising features or products that don’t currently exist. I don’t see this as being sales-led; I see this as bad practice. In the organizations I have seen where the sales team plays an important role in the company, they are careful to be clear about the current capabilities of the products. The sales teams rely on reputation to sell products.
In some instances, selling ahead of the roadmap can be beneficial. When customers are willing to subsidize the development of certain features this can be a win for both the customer and company. One should enter into these agreements with great prudence, making sure that the final product can be carried over to other customers and that there are clear requirements between the company and customer.
When describing what product-led organizations are, Melissa states that they are,
- Focused on solving customer/user problems to drive business value
- Oriented around outcomes rather than output
- Experimental by nature and driven by continuous improvement
- A place where leadership enables empowered decision making throughout levels
These are all great points and characteristics that a company should incorporate. However, this should not be at the expense of technology, vision, or sales. In essence, a company should be driven by product, technology, vision, and sales. It’s important for a company to balance delivering meaningful products and managing technical debt. It’s also important to establish a clear and cohesive vision while empowering individuals with autonomy to achieve this vision. I don’t think there is any secret trick or single path on how to balance these factors. There will always be a tradeoff between resources and company initiatives.
I wholeheartedly agree with Melissa’s message that companies need to not build products and features just for the sake of building things. Products and features should have real value for the customer. However, I disagree with the implication that a company must fully focus on being product-led without considering technology, vision, or sales. At the end of the day, companies want to build features that are meaningful to the customer. The crux of the matter is understanding what has value to the customers. Customers may not know what they need or want until they see it. Systematically measuring value is also very difficult. With current tools we can measure how customers interact with products but this doesn’t answer the question of why they interact. I would argue that understanding the why is essential for understanding the value. Perhaps these issues are addressed in her book. I’m still on the fence about reading it.
[1] https://www.youtube.com/watch?v=DmJXpI7OJuY
[2] https://www.cpr.org/2023/01/08/southwest-airline-winter-storm-and-technology-breakdown-will-cost-it-up-to-825-million/
[3] https://hbr.org/2019/02/why-visionary-leadership-fails