4 Core Tensions & Opportunities for Product in the Enterprise

4 Core Tensions & Opportunities for Product in the Enterprise
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A few months ago, I was given the opportunity to speak at the Product Management Festival in Zurich, among a diverse and curious crowd of product managers, designers, developers, and leaders, where I talked about individual strategies to create a product culture at a legacy enterprise. I also gave a follow-up webinar where I was asked what were the main themes I see related to product management in traditional companies. Now that the holiday buzz is behind us and we’ve kicked off a brand new year, I thought it would be useful to synthesize my thoughts on this topic.

To give a bit of background about myself, I’ve meandered through different roles and contexts which shape the professional I am today – from startups to the Fortune 15, business analyst to PM. So I definitely do not pretend to know it all; all I can speak to are my unique perceptions that color and inform my work. A wannabe sociotechnical theorist at heart, I believe society and technology are in constant co-influence on one another, and understanding of this concept is fundamental for effective management of any product, strategy, or team.

All that being said, I will focus here (for the sake of brevity) on the four core tensions and opportunities I see related to modern product management in corporate environments, as I don’t think there is enough written on this topic from a first-hand perspective i.e., from those on the ground, the ones defining and implementing product strategy. There is obviously great thought leadership and theorizing on how to approach innovation in the enterprise, tailored especially for organizational leaders and the C-Suite, but there is a significant gap when it comes to specific application for practitioners. Reality is usually much more messy than the case studies make it seem.

SPOILER ALERT: I definitely do not have the answer, the silver bullet to making large companies run like startups (Eric Ries might, though!). But, as any good product manager will tell you, you must first start with the problem and corresponding opportunity...

I. Innovation vs. Execution

The first tension is that between innovation and execution. Successful organizations obviously need to get both right to succeed. The tension lies in the fact that innovation is telling you to “fail fast” while execution dictates that “failure is not an option.” True innovation is challenging at most enterprises because market pressures and institutional momentum tend to sway them towards improvement of the status quo – those business models and ways of workings that have been successful in the past. But incrementalism and myopic execution are the anathema to innovation. In this environment, it is nearly impossible to gain the energy, introspection, and external awareness needed to break through legacy habits.

As Product Designer, Nikkel Blaase, aptly noted:

Optimising the status quo by improving quality and customer satisfaction is what all successful companies are very good at. This is why they tend to fall back into these optimising habits, when it comes to new innovation efforts, as it pretends to be safe and predictable in times of extreme uncertainty...When innovative new product categories create new markets and substitute companies’ core businesses, getting better at things people want less will not help them to survive. Nokia could have improved their phones as long as they wanted, but it would not have kept them unscathed from the iPhone...Innovation hurts and acts destructively.

So a common practice is for large organizations to form innovation groups, insulated from day-to-day business, where they can explore and experiment future-state ideas. While this definitely has its merits, in practice, if you separate your innovation and execution functions too much, you get a schism between teams – not just in practical application of strategy, but in the work culture where it becomes a very stark “us vs. them” view. There is frustration on both sides, where the do-ers feel their work is outdated and soon to be retired for the next shiny thing, and innovators deal with the view by other teams that they’re working on nebulous, moonshot ideas. There is also an implied hierarchy by labeling some team members as “strategists” or “innovators”; what does that make everyone else?

At the end of the day, real innovation is driven by an obsessive focus on customer needs, technological developments, and firm capabilities within a culture that allows teams to deliver those key elements and is comfortable with their own creative destruction.

II. Digital Channel vs. Product

Similar to the struggle between innovation and execution in the enterprise is the decoupling of digital channels from the core product. You see this with older organizations like banks, where the products themselves – like checking and savings accounts, credit cards, loans, etc. – have been around longer than the digital channels to support them. These channels include the websites and mobile apps that came about to initially complement the existing product but, as digital becomes a core component of the modern experience, they started to be tightly integrated, at least in customers’ minds. In other words, the digital experience is part and parcel of the total customer experience.

The problem is that management structures are not as quick to keep pace. The teams that manage the physical product can be distinct from those managing digital. And, because of the siloed nature of large businesses, they are often not working together as tightly as they should. As much as any group tries to foster an entrepreneurial culture, it means very little if there is a disjointed end-to-end product experience, so it is important to be conscious of that and work across functions to solve at the macro level.

III. Scale + Impact

A distinct opportunity is that to make impact at scale at an established organization with an existing reputation and extensive customer base. Even small enhancements can easily touch thousands, if not hundreds of thousands of users, instantaneously. But with great power comes great responsibility. In systems thinking, we are taught to look at implications of our work beyond the immediate output. However, this gets lost in the rapid pace of software development. When teams are heads-down focused on the next release, they can lose sight of second- and third-order impacts of their work that can have very serious consequences, especially at scale. What better example than the backlash Facebook and other tech giants have gotten recently for surfacing fake news?

Another seeming benefit from scale that actually hinders progress is the curse of resources. Too much money that large businesses tend to have thrown blindly without rigor ends up in bloated projects, wasted efforts and, more palpably, slower development due to increased coordination costs and higher likelihood of misalignment. As they say, nine women can't make a baby in one month, so understanding the value of being truly Lean and operating by those principles is key.

IV. Vision + Autonomy

The last core element important for teams of all sizes, but especially crucial for traditional companies trying to stay relevant, is the relationship between vision and autonomy. Management writer Daniel Pink outlines three elements of motivation: autonomy, mastery, and purpose – basically having the freedom, skills, and direction to achieve a goal. We want to believe that we are somehow effecting change in our professional lives, so proactive people tend to join large organizations to have this grand impact, and then they get frustrated. Either progress is too slow because traditional management methods used for legacy businesses don’t work as well when applied to innovation. Or the team may be super nimble, but it is operating on an island, in its own little bubble, separated from the core business. In this case, the team lacks a clear vision for how their work ladders into the overarching company mission.

Wherever execution of the status quo and protection of corporate hierarchy is prioritized over independent thinking, innovation will suffer. On the flip side, decentralized decision making falls apart without a collective understanding of the team’s North Star. If you lack a vision, your team winds up running around in circles, which is why this fine line between vision and autonomy is so critical.

In sum, there is obviously no one-size-fits-all model to tackle digital transformation, especially within more traditional corporate cultures and management structures. Change management literature definitely helps lay the philosophical groundwork, but it takes a bit of experimentation with different models, practices, and approaches from product teams to find out first-hand what works for them. Understanding some of the major inhibiting or liberating facets of product management in enterprise settings is the first step in understanding the problem – and opportunity – space. By harnessing these elements at their core, we can start to cultivate environments for our teams where a true “Product” mentality is not just allowed, but encouraged.

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