Should Your Company Implement a Product Model?

In Marty Cagan's words, "If you're not embarrassed by the first version of your product, you've launched too late."

Marty Cagan is the most prominent voice on the product model. After spending decades in what I will call traditional companies that have existed for over 50 years or more, I am convinced that the product model won’t work.

First, the product model often enters a company through the IT organization. A company’s systems are usually driven by packaged solutions that drive the core processes of a company. These systems don’t lend themselves to be the root of embarrassment if you release early. However, many IT organizations don’t often think about it this way, and they apply the product model broadly.

Not only do they start with core systems, but they also try to convince business functions like finance or supply chain to shift into a product model. Create a product manager in the business for a package solution that doesn’t ship often… balance that with a technical product manager and an engineering team to support the effort. Of course, you will wrap the whole effort into “Agile” delivery. Which often means 2-week sprints within a program increment of 8 – 12 weeks and that releases at the end of the increment (ideally). It's not exactly very agile or fast. The reality is that most of these approaches lead to significant scope reduction to maintain the schedule. In addition to the lack of certainty in planning and predictability, the culture of most corporations struggles to adapt. Their “flow” inside the company just isn’t tuned to launch early, iterate often, and fail fast.

Technology is moving at a pace that most companies simply can’t keep up with. New ventures focus narrowly on problems, often chipping away at a traditional company’s value proposition. In reaction to these new threats, companies invest in digital products—new customer experiences, mobile applications, greenfield systems, data platforms, and more.

These new investments are where a product model can make a difference.

These new investments are where a company needs to ship quickly and be embarrassed.

These new investments require you to launch early, iterate often, and build a culture that is so customer-obsessed that the focus on delivering your new products is relentless. Your customers will embrace the early releases and bumps along the road due to the value creation they are experiencing for themselves.

So, how do you get there? How do you build a customer-obsessed, product-model organization that can deliver digital products within your company at the speed of light?

Most companies start by creating new digital teams. Maybe they will hire a Chief Digital Officer. They change the title of existing employees in different departments from marketing specialist to product manager. From project manager to technical product manager. From engineer to technical lead. Some employees may be moved into an engineering function, others into a new team to be product managers under a Business Unit Leader or Marketing Leader. For some reason, the company can’t quite rip off the band-aid of its organizational construct as it embraces a product model. Leading to points of friction.

I argue that there is a different, more radical way to at least start the journey towards a product model.

Create a single Product Leader responsible for both the product management and engineering of the product you are trying to build.

By creating a self-contained organization responsible for delivering a digital product, you have one person to hold accountable. By creating a single organization, you break down the barriers and remove the friction. You bring the customer-obsessed product manager together with the engineering, user experience, and customer validation teams. As a single unit, you are all responsible for the delivery and launch of the product.

As a single product team, you can quickly iterate on the product itself and on the flow of product delivery, learning and improving along the way.

There are two more key constraints that have to be discussed to make a product model work in a traditional company – Resources (Budget and Employees) and Time.

Resources

In a start-up, money and employees are tight. There is often a huge sense of urgency because of this. Founders in a start-up feel the pressure of the burn rate – Money in the bank divided by monthly costs equals time remaining. This pressure doesn’t exist in most corporations, but it needs to. Give your product leader a fixed budget and resources. Set specific goals, not on features released, but on customer engagement. If those goals are met, that can unlock additional resources to increase the runway for the product team. This may not lead to more employees focused on the product, but it could lead to more budget to extend the time the team has to improve the product.

Time

So many companies are numb to projects taking longer than anticipated. They absorb excuses like requirements weren’t well defined, the system was more complex than originally thought, and a vendor didn’t perform. A start-up doesn’t have enough resources to absorb these excuses. They have to ship products, learn from their customer, and iterate. Time and Resources go hand in hand. Fixing both will force the team to figure out the value proposition they need to deliver to get the customers to try or, better yet, buy the new product.

To summarize in the words of Marty Cagan – A great product model, means you need to be able to think like your customers.