The One Thing High Impact Product Teams Have In Common

Building Products The Right Way

Product management has come a long way as a discipline in the last couple of decades, with an increased focus on developing best practices. Yet as teams have sought the right way to build products and services, and ultimately create products that meet customer needs, has anything been lost in the mix?

“A lot of the conversation about best practices has specifically been about emulating a certain set of well-documented big tech companies,” says Matt LeMay. “The reason for that makes sense, because product development is difficult. It involves a lot of ambiguity, which is scary - and so there's been this wish to say, ‘Okay, well, who are the companies who have really succeeded, and how are they doing things?’

But the problem is that if you look at the commercial circumstances of those companies, they're really hard to replicate. And in a lot of cases, they aren't circumstances you'd want to replicate either. For example, Spotify had its first profitable quarter in 2018, which was long after a lot of companies had started looking at the Spotify model and saying, ‘oh, we need to do exactly what they're doing.’”

Amazon is another good example, according to Matt.

“A lot of companies borrow best practices from Amazon, but this is a company that has so much cash that they're in a very different situation from most of the companies that are trying to emulate them."

Facing Reality and Asking the Right Questions

With the desire to follow best practices not always aligned with commercial pressure, then, where do product management teams go from here? For Matt, this is about facing the existential reality of the business.

“You can say that something isn’t the right way of doing things, that it’s not how you were told to do things,” he says. “But if that's the existential reality of the business, then that's the existential reality of the business.

When the CFO is looking at your team as a line item and asking what you're delivering for the business - if you as a team aren't having that conversation and don't know what the answer is, it puts you in a really tenuous position.”

In order to first understand, and then to prove their business worth, teams therefore need to ask themselves the right questions about their work. This requires a focus on their impact: on what the goals of the business are, how the team contributes to these goals, and how they are measuring this contribution.

Working With Impact

As Matt notes, the impact a team can have often depends upon things that are outside of their control, such as fluctuations in the market. It’s not possible to generate new growth in a user base, for example, if demand for a product simply isn’t there.

That said, focusing on impact does enable a team to tie its work to the fundamental success of the business. And it’s not always about profit, either.

“In the product and design world, we consider the feasibility, desirability and viability of products,” Matt says.

“But what viable means is super different from a business to a business and from a team to a team. If you're working on a product where you're venture backed and the aim is to grow at all costs, or if your team is focused on exploring new business models and innovating, then you might not want to be thinking about profitability at all…”

“One of the challenges here is that there is no absolute standard for what an impactful product is.”

For Matt, all of these variations, and the inherent difficulty of product development as a practice, mean a flexible approach is required - even when frameworks are used.

“There's been this debate around whether or not product managers should be responsible for the profitability of their product, and it's really tough to answer that, because the honest answer is that it depends on your product. It depends on your business, on your business model and your funding model, on what people are expecting and what promises have been made,” he says.

“One of the truths of product development is that it is really difficult. And part of why I like doing this work is that good frameworks exist to facilitate conversation, not to replace conversation.”

What All High-Impact Teams Have in Common

Aligning their work with specific business aims - and maintaining clear sight of these aims at all times - enables teams to succeed. But there’s another crucial ingredient in the mix: specificity.

“I have found very consistently that the highest performing teams have goals that are both high impact and high specificity,” says Matt. “That is to say that their goals are no more than one step away from something that the business really cares about, and they're specific - they need to achieve a specific number by a specific date.

Sometimes teams are really reluctant to commit to this because if a goal is high impact, then it’s outside of your control. So something that is high impact and has high specificity means that you are promising to accomplish something that is outside of your control.

It’s human nature to resist that. Like, ‘how can we commit to getting 1000 new users on the platform? How are we supposed to do that? What happens if we can't?’ These are all reasonable fears and questions, but until you have those specific numbers, you can't have the conversations you need to have.”

Indeed, without a clear view or commitment to the specifics, it becomes very likely that different parts of the organization - or even people within the same team - have different ideas about what success means, and what they are working towards.

This inevitably leads to anxiety, and can particularly affect the success of innovation within a business.

“I've worked with a lot of teams that are innovation teams or innovation adjacent teams,” Matt says. “The thing that has hurt them the most is a lack of clarity around what they are accountable for. Are they responsible for business impact, for revenue, for profitability, or for something else like strategy or initiative? There can be a lot of anxiety around what is really expected of them.

If this conversation isn't had explicitly, then that anxiety, that lack of clarity, can put teams in a weird middle position where they're not really exploring new things, but they're not really succeeding in old paradigms either. And that's one of the main reasons I see some of these innovation focused teams fail.”

Clarity and Transparency Make for Happier Teams

Even with the pressure to achieve their goals, for Matt, high impact and high specificity teams are always happier because they have clarity on what’s required of them, and they know that their success is aligned with the success of the business.

“The unhappiest product people I've worked with are the ones who see their job as to transform the organization single handedly, to get it to be product led, or user centric, or just to fight the business in some way,” he says.

“There's been an unfortunate tendency among some product teams to take an oppositional pose towards the business at large, to work on stuff that's interesting and stuff that ‘really matters’, no matter what the big bad business might tell them to do. But at the end of the day, the big bad business is writing your checks, the big bad business is why you have a job.”

Once teams are able to recognize this, it also makes it easier for them to handle the difficult conversations and trade-offs that inevitably occur.

“When goals are navigated in the open, trade-offs can also be navigated in the open,” Matt says.

“There's an example I use in the book. Imagine you're working on a team that handles subscription revenue, and you realize that you have a number of users who are paying the subscription but never use your product. What's the ethical thing to do? Do you send them a message and say, ‘Hey, we noticed you haven't been using the product, and we don't want to take your money for no reason’?”

To answer this, teams need to consider how much revenue is at stake, what they’re responsible for, and the ethics of the company at large.

“If your team is responsible for a huge amount of revenue, and the unused subscriptions represent a tiny amount of revenue, then it might be worth sending that message, because you're creating goodwill and that is really important,” says Matt.

“On the other hand, if those subscriptions represent the same amount of revenue your team is responsible for, then it's a different conversation to have, because you might be putting the business in an unsustainable situation by doing what feels like the right thing.”

As Matt notes, having these conversations is really important, but it requires clarity over what the business impact needs to be. This kind of clarity and transparency is hugely beneficial to an organization, not only for the way it enables the work of individual teams, but also because it encourages collaboration.

“A lot of impactful things are harder to do in your own little corner of the organization. It breaks my heart a little bit when teams try to make their remit narrower and narrower so they don't have to deal with dependencies, only for that team to no longer exist because they're not having a big enough impact.

This wish to make everything autonomous and loosely connected, to eliminate dependencies at all costs, doesn't reflect the reality of building complex products,” he concludes.