Product strategy de-mystified

My friend Will Eisner(Sr. Director of Product at Acquia) and I recently did a session on Product Strategy at Product Camp Boston. The session was very well received and I wanted to upload the slide deck and write a blog post describing our main thrust here.

What is strategy?

One of the things that continues to surprise me is the lack of understanding of what strategy is. Most people overuse the term strategic – and add importance to anything and everything by adding the word strategic to it (e.g., job titles such as strategic marketing managers, goals called ‘strategic goals’ etc.).

In one word, Strategy can be called the ‘How.’ How exactly are you going to achieve what you want to achieve? Companies have several goals – some of them financial, others are linked to what they want to be or what difference they want to make in the world. Strategy describes in very concrete terms how they are going to get there. As is described best in the book Good Strategy Bad Strategy, Strategy is the set of coordinated actions that a company takes to achieve its goals.

Not just a plan

If strategy was simply the how, then it can just be a simple plan, right? Most plans miss something key – they don’t recognize which obstacles are likely going to stop you from achieving these goals. Let’s take a couple of examples.

A personal example is when I want to lose weight, I could make a plan that limits portions, adds exercise etc. However that overlooks two characteristics of me: 1. I love dessert 2. When I am stressed I tend to eat more.

Given that, portion control is unlikely to work. How much is too much Hagen Daz French Vanilla ice cream with Nutella?

So what works? Red lines work. Either a food is on my list or its not. Either I am allowed to have as much as I want, or I cannot eat it at all. Thus stuff like Whole 30 diet works for me.

Now let’s take a different example. Of a very different person. Steve Jobs. The man who introduced the iPod, the iPhone, the iPad, the iPooch. But this example is not about innovation. This example is of Steve’s return in 1997. The company was failing. It was a couple of months from running out of cash, and was a minority player in computers. Most people would say that the way to get out of the situation was to innovate, to create new products, new categories. And Steve did innovate –  eventually. But the first thing he did was recognize the obstacle – that Apple had no money to investigate. And had a bloated product line with 15 – 20 models of desktops. So he took immediate steps to address the obstacles – trimming down of product lines to one laptop and one desktop, killing off all printers, striking a $150M financing deal with Microsoft who did not want Apple to go out of business (else they will have more monopoly issues on hand). And then Steve waited to innovate on the heals of an emerging trend – MP3s and MP3 players.

Strategy defines the hills

One very important aspect of Strategy is defining the hills you aim to own in order to be meaningfully different from the competition in such a way that customers value it. Blue ocean strategy is a book that talks about this a lot, and also talks through the case of Yellow Tail wines. This article describes it well so I will not go into the details of the case here.

 

Strategy needs to be designed

Strategy is not derived via a mathematical formula. Just like good software, good strategy is designed, and takes a combination of analytical skills, intuition, creativity and leadership to achieve.

Why is good strategy so rare?

Good strategy is rare not because it is rocket science. It is rare because it requires one to make hard choices, to pick a path, to cut off several options. It means giving up on several attractive, good ideas. In this day of unlimited choice, this seems like an unfamiliar thing to do. The most common course of action is to hedge one’s bets.

Bringing strategy to product management

In order to make strategy useful in product management, you as a product manager need to make sure that you a) Know the strategy well b) Need to be able to communicate it c) Need to be able to align all decisions to it and defend the rationale behind this.

Will’s experience at Acquia is great in this regard. Acquia uses Value points for each story, and how it ties to the strategy. Let’s say that their strategy prioritizes five objectives (could be retaining customers, increasing engagement with the software, expanding within a market segment etc.). Each story that helps these factors is given points for the objectives it helps achieve. This brings the discussion away from what a few vocal customers want or what an executive wants, to what is actually good for business and aligned with the strategy of the product.

Several places I have worked at have had a ‘land and expand’ approach to sales. This has helped strongly influence the strategy of each of the products, and how one logically creates a need for next. A key aspect has been being able to tie in not just the strategies of the product, but how the sales and customer success teams work together to help us get to our eventual goals.

Micro decisions  

A last – but very important – point is that as a product manager you drive a lot of decisions, but there is no way you can be there for each and every decision made about the product. This could be a design decision, a technology choice etc. It is important that you are not just making the right decisions per your strategy, but you are establishing a decision making framework that helps your team make the right decision even when you are not there. Thus you don’t just have to know the strategy, and don’t just have to use it to guide your decisions, you need to teach it so that your team drives the right decisions.

If you do all this, you might – just might – change the world.

 

 

 

Mental models and context

Imagine two scenarios. Two mothers.

Mother one – when it’s time for her one year old son to go to sleep, she gets him ready and rocks him to sleep. As the baby starts to drift off to sleep, she puts him in his crib. She gently rubs his back while he is still in light sleep, leaving only when he has fallen into deep sleep.

Mother two – when it’s time for her one year old son to go to sleep, she gets him ready to sleep and reads him a book. Then she kisses him good night and puts him in his crib. The son complains, and the mother says some soothing words. She sings him a song. But then she leaves the room wishing her son a final Good Night. The son might complain a little, but very soon he starts talking to his stuffed animals, and singing. After about 20 minutes, he is fast asleep.

Question to you: Which mother is doing the right thing?

Your answer might depend completely on your mental model, which is shaped by the context in which you live.

If you have grown up in a joint family, where there are plenty of people to take care of the child, then option 1 sounds wonderful. You are showing all the love and support to the kid. Why not do that?

If you have grown up in a nuclear family, then option 2 sounds great! There are other things to be done, and besides, aren’t we teaching our kids to be independent from n earlier age?

I came across this situation on my tip to India. And the funny thing is that the parents on either side were fascinated by how the other side handled things. My wife and I were amazed at the patience shown in taking care of kids (me less so since I grew up in India). On the other hand we got regular questions like – ‘Oh did your son sleep so fast?’ ‘No, but he will on his own’ – our reply. ‘Oh wow, its amazing that your kids can do that at such an early age’

How does this affect products?

This is a blog about product management. Why am I going on and on about mothers and kids and fathers and sleep and diapers? There are two important aspects that are highlighted here which we tend to overlook – mental models and context

 

A mental model can be thought of as a filter one applies to the actual truth. It takes the overwhelming complexity of what is going on in the real world and makes sense out of it. It would totally ignore several inputs, and highly bias other inputs based on past experience, deeply held beliefs and what else is going on in the person’s life. I am calling this ‘what else is going on in the person’s life’ as the context in which the mental model is working.

Let’s look at some examples of where mental model and context changes the situation completely.

Wheels on bags

One of the most fascinating product stories for me is very simple – wheels on luggage. The first fascinating part: wheeled luggage was introduced in 1970. Decades after luggage was introduced. Why so? Well the initial context was different – people did not have to walk through large airports carrying heavy bags with them. Trains were more popular than planes, there were lots of porters that could carry bags for people etc.

Then the context changed. Airplanes became more popular, requiring people to carry heavy bags across much larger distances with fewer porters. Yet for a long time people carried on with the previous mental models – bags are meant to be carried.

Even after wheeled luggage was introduced it did not immediately pick up popularity. People stuck to their old mental models – especially men. Men saw themselves as strong, macho guys who did not need wheels to help with bags. Things really changed only after TravelPro introduced rollaboards that became popular with flight crews. These role models ultimately led to mass adoption of wheeled luggage.

Hence such a ‘simple invention’ – putting a freakin wheel on a bag – took so long to gain acceptance.

What is the right meal for me?

 

One of the best examples I have heard of is from Des Traynor in his talk Product Strategy in a growing company. He takes a simple question – what is the right food for a male 35 years old who works in tech?

The context of consumption changes everything. Without understanding the context you cannot answer it. Example – what if this person is going out on a date who he really, really likes to impress? Likely a meal that gives him plenty of time to chat over (likely) alcohol is a good idea. Steak might be optimal. But what if the context is – oh this person needs to eat while working on a presentation for a client due in 1 hour. He cannot waste time, has to multi-task. Pizza delivered to his deck sounds like a much better idea.

Growth

I would argue that one of the biggest determinants on how fast a company will grow is how much the product, marketing and sales of a company aligns with the mental model and context of the user. Anything that makes users have to change either is a speed bump.

There is a lot of software companies now selling predictive apps – applications that can make judgement based on predictive analytics, that are promised to be better, faster or cheaper than human judgement. I used to work for one. A roadblock is making the end user believe that the application is indeed better than their own judgement. We are all inclined to believe apps that predict things we know less about. Take the weather for example. Predictive models have been used for while – we tend to use them rather than looking at the sky and determining how the weather will be this afternoon. However for other purposes not so much. For example, predictive applications in sales – sales people tend to be skeptical that analytics can tell them what their accounts are likely to buy more than they would themselves, despite plenty of evidence to the contrary.

Final words

Context and your user’s mental models changes everything. Understand them well – ignore at your own risk 🙂

Red Cross – better site for more blood donations

Yesterday I got a Voicemail from Red Cross asking for urgent blood donations. Given the fact that I visit India once a year or so and then cannot give blood for a year, right now is a golden opportunity. It’s been over a year since I visited and one month to go before I visit again.

So I go to Red Cross’s website on my phone, find a site and drive where I can register, and then what happens? It asks me for my username and password.

 

 

What are the chances I will remember this? Zero. So I ask for it to reset my password.

Then I get an email with my new password.

 

Of course I am on my phone and so have no way of copying and pasting the password. So I put it off till I get in front of a computer. Now I remembered to complete this anyway because I was going to blog about this :). But how many people never finish this transaction and how much potential blood donations does Red Cross loose every year? Come on Red Cross. The web experience matters. Stop doing more calling efforts etc. and just make it easy for people to sign up and donate blood. It will be money well spent.

 

 

Slack vs. Email the context

I have noticed something strange. For some reason, I prefer to read updates in Slack vs. reading emails about it. This is despite the fact that slack updates are often one liners, not as well written as emails, and lack a lot of details. Why so then?

It’s all about the context.

Think of the last meeting or presentation you went to where someone went on and on about something. And you had no idea what they were saying.

Many times when that happens, it is because the person forgot to set context. Often called the curse of knowledge. Specifically, the person might just be following up a discussion from a previous meeting, but he or she might be so immersed in the details, that he assumes that you are too. Hence you will understand everything immediately.

Not so.

One of the most important things I learned at McKinsey – start a meeting with a recap. Take three minutes to state where we are.

But what does that have to do with Slack? With slack, you are clicking on a channel. In that brief period of about a setting you are mentally setting context that this conversation is about X. At Tamr we use Slack extensively. When a slack channel is about a project, I know what the conversation would be about. When it is a channel called random, I expect gifs, jokes, and articles only somewhat related to work.

Meanwhile an email subject line might be ‘Update.’ There is no previous conversation at times to fully scan. Hence slack as a preference – lowers cognitive load, and keeps the conversation going!

Taking perspective: an essential PM skill

The other day I was in a meeting with one of my teams. There were people from various groups – Customer Success, Design, QA and Engineering. And I found myself debating with every one of them.

Later I thought – why am I debating with everyone? Do I not agree with anyone? What is wrong with me?

But then I realized – ah that wasn’t so bad. You see, I was taking perspective.

One of the master PM skills is representing who is not in the room. I was often playing the role of the customer. In other cases I was not representing people who were not in the room necessarily, but advocating for people in the room who were not speaking up (or maybe they might have if I had given them a chance :)).

Anyhow I found this happens more often than not recently. So I must be doing something right – or messing up entirely.

Lack of functionality an advantage

Recently my wife and I started subscribing to the Boston Globe. And no, not the website or the iPad app. But the newspaper. Why would anyone do that in the age where all news is available on your fingertips via the internet, for free, and in the most current form?

This is the case where the limitations of the product actually has benefits. The product is news on paper – and just the news. No facebook app, no music, no glowing screen. Much less functionality, and somewhat worse form factor.

Why is it better? Because it does not attract our children. The screens of iPad/computer attract our children like bees to honey. They pretty much don’t care about a piece of paper. Which means Kerri and I can read it in peace. The lack of functionality is actually a distinct advantage for us.

Where have you seen a functionality gap to be a disadvantage? Please do comment

A confession – I am addicted

I have a confession to make. I am an addict.

There – I said it. It feels like a weight has been lifted off my shoulder.

And my addictions are many. But the biggest one is email.

What else would you call it?  The first thing I do when I get myself out of my bed? Check email.

But it is getting better. It used to be the last thing before I went to sleep. And the first thing even before I was out of bed. And then there was Facebook.

Now things are slightly better. There is no Facebook app on my phone. My 90 days without Facebook really helped.

Email no longer puts in a red notification on my Phone. That helps.

As all addicts, I have hope that I will overcome. And be fully present with the people that I am with, not checking my email, checking if someone else in the world had something to say to me.

Tell then….woo 3 more emails! I must be important!

Strategy is the How

This post was originally published on the High Start Group blog – http://www.highstartgroup.com/strategy-is-the-how/

Strategy is one of the most overused words in ‘business language.’

‘Our strategy is to make our customers happy, be a provider of high quality and low cost widgets, demanding a price premium while being the best channel partner there ever will be in the history of the universe’

A statement I made up. But not so unrealistic given other stuff that exists.

The thing is – this is not a strategy. This is what an organization wants to be. This is a vision and a set of goals. Which is fine. A vision should be lofty and inspiring, and something that the people in the organization can get behind. Goals should be lofty, yet not completely unrealistic. Vision is what we might be at some point in time. Goals are milestones towards achieving the vision with; normally with some type of timeline attached.

Credit: GoodStrategyBadStrategy.com

So what is strategy?

I have been reading a book called ‘Good Strategy Bad Strategy’ by Professor Richard Rumelt of UCLA Anderson School of Management. Really fascinating read. The author dedicated several chapters to explaining what strategy is, how to recognize what the strategy for a given company is, and how to define your own strategy. At the very basic level, strategy is the how. Not the plan, but what are the coherent set of actions that are needed given the set of problems the organization is expected to face. And most importantly, what are the trade-offs we will make to achieve those.

Let’s take an example

There are 1000s of books written about strategy, so I will stick to a basic example. Let’s say I am your neighborhood pizza store. I am not part of a chain. My specialty is that I offer gourmet pizza, it is completely customizable, tastes great – better than any other location in the area. Right now I serve pizzas by the pie, for dine in or take out, made fresh to order. My pizza is made with all natural ingredients, and cost 2x more than other pizzas. It also takes 30 minutes to prepare from the moment I order. Most other pizza places take 10 minutes.

I want to expand I am now trying to figure out whether I should start offering Pizza for delivery, or open a full service restaurant which will be 3 times bigger than my current location.

At the basic level, let’s review the current trade-offs, from the perspective of the owner

• I only prepare Pizza fresh when the customer orders it. This means I am unable to serve those people who just want to get a slice on the go. But my Pizza tastes great!
• I use natural, fresh ingredients. Hence my prices are higher. But knowing this gets me a lot of customers who are health conscious. Especially people with kids.
• My pizza takes longer to prepare – which also means people in a hurry cannot get it

Now let’s look at the two options.

Offering Pizza for delivery

One of the key questions to answer when expanding a business is – for whom? Who are the type of customers for which you plan to deliver Pizza? What are their needs? So the owner might conduct some market research, and find that the people who want to order these pizzas are parents who love to dine at the location anyway, but cannot make it there because of kids bedtime. They do not mind waiting some time to get the food as long as it is of similar quality.

In this case it makes logical sense to extend in this line of business. Sure, you need additional marketing, pizza making capacity, ability to deliver etc, but this line leverages a lot of existing strengths.

On the other hand, the owner might find that people who order pizza in are normally college students who want cheaper pizza, really fast, and lots of it. Sure the owner could expand in this line, but then what different is his pizza place as compared to the domino’s and papa johns around the corner? How does the owner adopt to this new segment?

Opening a restaurant

Opening a larger restaurant with a broader menu is the other option. This requires certain new skill sets – managing a wait staff, adding menu items other than Pizza (e.g., it could be a salad and pizza place), expanding the footprint of the store etc. But what I like about this option is the complementarities of the situation to the existing place.

1. It takes 30 minutes to get Pizza – why not have starters and alcohols to upwell customers at that time?
2. If there is demand, why not extend the Pizza place (in terms of number of people)?

The question then becomes – will the Pizza place do well as a restaurant? Is it visibly distinguished from other restaurants in the other area? The owner needs to review these impediments and then finally make a decision on whether to open a restaurant or not.

It’s all about decisions and design

The key thing is that in either of these options, the strategy was not what we wanted to do. The strategy was ‘now that we have decided what we want to do (i.e., the vision and goals), how do I get there.’ The strategy supports major goals. In this case, there was a goal of expansion; the strategic planning exercise went through looking at options on how to achieve the goal, reviewing the expected obstacles, making the necessary trade-offs, and then designing the strategy to tackle them.

Strategy is the how. Not the what. Figure out what you want to be first, and then determine the how.

A brilliant move

A friend of mine is the VP of Product at one of Boston’s hottest startups. I am leaving him anonymous, though I do plan to send him this post and see if he wants to be recognized.  <Update> The company is Yesware and my friend is Jake Levirne.  His CEO and him came up with a brilliant move – they made customer support report to the VP of Product.

This is amazing.

Customer support has often been perceived as a cost center. As a place where we explain to the “pesky users” how to use our brilliant, clearly intuitive, ‘who-wouldn’t-understand-this’ product. Users still screw up – that’s why we send them to a department designed to solve their problems as soon as possible and get them away from us.

No more.

The brilliance of this move is what it signals:

1. Making customers/users successful is the Product’s job. If users are having trouble with your product, it is because your product is not as easy to use as you thought it to be
2. Customer support is no longer a pure cost center – it is one of the primary ways to engage customers, get their feedback, and make the product better for all

This startup has gained tremendous traction by making their product easy to use, and engaging with their customers. More companies should consider this.

What I learned at McKinsey

This post originally appeared at http://shobhitchugh.blogspot.com/2013/09/what-i-learned-at-mckinsey.html.

 

After nearly 2 years of total time at McKinsey, I joined Lattice Engines as a senior product manager. And I love my new job! But in the midst of this new job, I have often reflected on what I learned from my time at McKinsey. Was working there after business school really valuable?

Not even counting the network and brand, and the friendships I developed while at McKinsey, I completely believe it was. Just like Business School, I answer this question by the following statement – if the experience significantly changes (and improves) the way I think and act, I believe it is valuable. In particular, there are some elements of the McKinsey culture that have become part of the way I work. I will classify them under two categories: Work style and Communication and Interpersonal skills.

Work Style

1. Efficiency and Urgency: I have a sense of urgency to do things faster, more efficiently, that I did not before. At McKinsey, there was a constant emphasis on using the 80-20 rule to have maximum impact with less effort; this was the only way you could actually complete the work assigned to you. That has completely rubbed off on me, though I do sometimes push for getting things done in an unrealistic timeframe.
2. Scheduled PS sessions: We had 2 problem solving sessions scheduled weekly, to proactively think through problems we might face. Having these on the calendar forced us to come up with answers with artifical deadlines, and kep the project moving forward. Also, these sessions gave us a way of stepping back and reviewing the progress as a group, look at the big picture, get input from multiple stakeholders and make better decisions about the future of the project
3. First day answer: There was always a urgency of getting to an early answer. On a first day, it was just a hypothesis; you will spend several weeks proving or disproving the answer. But having to come up with an  early answer makes you focus on what are the things you need to do to come up with a refined answer, and use facts to back it up. In addition, this helps bring around a focus on Iterative problem solving and end-product focus: We began every study with a storyboard; an outline of what the final product (i.e., the final presentation) will look like. This helped us understand and prioritize our analysis, and also help drive prioritization of work
4. Put something on paper: There was also an emphasis on coming in with a perspective, and in particular putting something down on paper which forces people to react. This is a powerful technique because most people are overwhelmed with too many things to handle, and if you ask them something, they might not put too much thought into their answers. Putting an opinion in front of them forces them to react, and either agree or disagree, and produces better results

Communication and Interpersonal skills

1. Bucketing or ‘chunking’: Give someone a set of six points, and they will not likely remember anything. Give them three points, with two sub-points each, and they will likely remember what you said. This is probably the most useful habits I developed; rolling up points into themes, and communicating in sets of 2-4 themes at a time. This has made my presentations and communications so much more effective, that this alone is worth the time spent at McKinsey.
2. Respect for different personality types: McKinsey lives on MBTI types; people use MBTI as a way of communicating how they work, and to understand how they can work better with others. For me, it helped in two major ways. First, even though I don’t use MBTI types anymore, when I start working with someone, I try to get a sense of how they like to work. I also respect people’s preferences more, and try to understand what they say based on their personality. Second, MBTI has helped me understand myself better. I know that since I am INTJ, I need time on my own to think through things before meetings, I love to organize things and build plan before I proceed, and that I love to think big picture, but need to watch out for the details when I work. 
3. Team Learning: A unique thing we did close to the beginning of each project was to hold a team learning session, where everyone mentioned their MBTI type, their learning goals, and how they like to work. This session was very valuable, both as a team-building exercise, but as a way to surface information that can help the team tremendously in the future, to avoid misunderstandings, and to support each other in achieveing individual goals
4. Dialogues and handling different points of opinion – At the end of my one year learning workshop, I learned two very valuable frameworks for conversations. One was treating dialogues as a balance between listening and asserting, and techniques to make sure that you do each of these more effectively. Second, I learned a way of handling different points of opinion by getting to an understanding of the facts and assumptions behind each persons arguments, and understanding what assumptions you need to test for everyone to get on the same page