Escaping the Build Trap: A Guide to Becoming a Product-Led Organization

Quick Orientation

“Escaping the Build Trap: How Effective Product Management Creates Real Value” by Melissa Perri serves as a comprehensive guide for organizations aiming to move beyond simply shipping features to consistently delivering genuine value for both customers and the business. Drawing on her extensive experience as a product manager, consultant, and educator, Perri dissects the common pitfalls that lead companies into the “build trap” – a state where success is measured by output rather than outcomes. The book provides a practical framework encompassing roles, strategy, process, and organizational dynamics necessary to transform into a product-led entity, enabling sustainable growth and innovation. This summary will navigate through each chapter, capturing the core ideas and actionable insights presented by the author in a clear and accessible format.

The Build Trap

This section introduces the core concept of the “build trap,” defining it as the state where organizations prioritize shipping features (outputs) over achieving desired business and customer results (outcomes). The section highlights the dangers of this mindset, illustrating how it can lead to a decline in market share and vulnerability to disruption.

Understanding the Build Trap

The build trap is a dangerous state for companies because it distracts them from what truly matters: producing value for customers, hitting business goals, and innovating against competitors. When organizations become fixated on the quantity of software produced rather than the actual value it creates, they fall into this trap.

• Misunderstanding Value: Instead of connecting value to desired outcomes for businesses and customers, companies measure it by the sheer volume of things they build.
• Quantity over Quality: Celebrating the number of features shipped becomes the primary metric of success, even if those features fail to achieve their intended goals.
• Detrimental Incentives: Employees are often motivated and judged based on these output-centric proxies, rewarding quantity of code, designs, or backlog items rather than the value delivered.
• Reactive Mode: Companies stuck in the build trap are often in reactive mode, trying to copy competitors or satisfy one-off customer requests without a coherent strategic intent.
• Loss of Sight: This focus on output leads to losing sight of what made the product attractive in the first place and fails to analyze how features contribute unique value and strategic progress.

The Value Exchange System

Fundamentally, successful companies operate on a value exchange where they provide solutions to customer problems and needs, and in return, customers provide value back to the business (money, data, etc.). The build trap emerges when companies misunderstand or fail to prioritize this exchange.

• Core Principle: Companies create products or services to resolve customer problems, wants, and needs.
• Customer Value Realized: Customers only perceive and gain value when their problems are truly resolved and their needs are met.
• Business Value in Return: Only after the customer realizes value do they provide value back to the business.
• Defining Business Value: From a business perspective, value is anything that fuels the business, such as money, data, knowledge capital, or promotion.
• Challenge of Customer Value: Customer value is harder to measure directly, leading companies to use easily quantifiable proxies like feature counts.
• Need for Understanding: To truly define and deliver customer value, companies must deeply understand their customers’ and users’ problems.
• Enabling Learning: Gaining this understanding requires getting employees closer to customers, which necessitates the right organizational policies.

Constraints on the Value Exchange System

The value exchange system is influenced by factors on both the customer and business sides. While customer influences are largely external, businesses have control over their own constraints, which, if mismanaged, can prevent effective value delivery.

• External Customer Influences: Customers are influenced by their communities, available technology, and market trends, which are outside a company’s direct control.
• Internal Business Constraints: Businesses are constrained by their people, processes, policies, strategy, and culture.
• Control over Internal Constraints: Unlike external influences, businesses have full control over how they manage their internal constraints.
• Sacrificed Value: When internal constraints are too rigid, value is sacrificed on both sides of the system, hindering effective exchange.
• Rigid Processes: Many companies follow rigid development processes that leave no room for experimentation or learning if a feature actually delivers value.
• Output-Oriented Optimization: Companies often optimize their entire organization for increasing output (number of features, releases) rather than outcomes.
• Unawareness of Impact: Many companies are unaware of how their internal constraints negatively impact value production because they aren’t measuring outcomes.
• Loss of Strategic Focus: Without measuring outcomes, companies lose track of their strategy and vision, leading to the build trap.

Projects Versus Products Versus Services

A crucial shift needed to escape the build trap is moving from a project-based mindset to a product-based one, recognizing the fundamental difference between projects, products, and services.

• Project-Based Cycle: Many companies operate on a project cycle with defined scope, deadlines, and milestones, moving to the next project once the current one is complete.
• Lack of Aligning Strategy: Projects often have their own outcome measures but lack an overarching strategic connection above them.
• Confusing Frameworks: Companies stuck in the build trap often confuse project management frameworks (like PRINCE2 or PMBOK) with product management frameworks.
• Products as Value Vehicles: Products are defined as artifacts (hardware, software, goods) that deliver value repeatedly to customers without requiring new building each time.
• Services Rely on Humans: Services primarily use human labor to deliver value, though they can be “productized” or automated.
• Combination Approach: Many companies use both products and services, and these should be optimized together as a system for value delivery.
• Projects as Part of Product Development: Projects are essential for feature enhancements, but thinking only in terms of projects prevents the long-term nurturing required for product success.
• Product Management’s Importance: Product management is the discipline focused on organizing for products over projects, optimizing them for continuous value achievement.

The Product-Led Organization

Becoming product-led is the path to escaping the build trap, characterized by prioritizing, organizing, and strategizing around the success of products as the primary growth driver. This contrasts with other organizational models.

• Product-Led Focus: Product-led companies prioritize product success as the main engine for growth and value creation.
• Contrast with Other Models: Organizations can also be led by sales, visionaries, or technology, each with its own potential to fall into the build trap.
• Sales-Led Pitfalls: Sales-led companies let contracts dictate strategy, leading to one-off features that don’t scale and reactive development.
• Visionary-Led Challenges: Visionary-led companies depend heavily on a single person, which is powerful but unsustainable and can crumble when that visionary leaves.
• Technology-Led Issues: Technology-led companies are driven by the latest tech but often lack a market-facing, value-led strategy, creating cool things with no buyers.
• Product Strategy’s Role: Product strategy integrates business, market, and technology, leading with a value proposition.
• Becoming Product-Led: Transitioning requires examining and changing roles, strategy, process, and organizational policies/culture.
• Mindset Shift: The change isn’t just technical; it requires a fundamental shift in mentality from delivering outputs to achieving outcomes and embracing experimentation.

What We Know and What We Don’t

Product development is inherently uncertain, and a key aspect of effective product management is recognizing and navigating the knowns and unknowns to reduce risk and drive informed decisions.

• Uncertainty in Product Development: Product development is full of unknowns and requires separating facts from areas needing learning.
• Known Knowns: These are facts gathered from data or critical requirements that are understood to be true about a situation.
• Known Unknowns: These are clarified assumptions or data points that you know you need to investigate or problems you need to explore; they can be clarified through discovery and experimentation.
• Unknown Knowns: This is intuition based on experience, which should be acknowledged but also tested for bias through experimentation.
• Unknown Unknowns: These are the surprises, things you don’t know you don’t know, which are discovered through research and can significantly alter direction.
• Product Management’s Domain: Product management is the domain of identifying and investigating known unknowns and working to uncover unknown unknowns.
• Beyond Known Knowns: Anyone can build based on known facts, but product managers possess the skill to sift through information and identify the right questions to ask.
• Optimizing Value: Product managers identify features and products that solve customer problems while achieving business goals, effectively optimizing the value exchange system.

Mini-recap: This section established the problem of the build trap, defining it as an output-over-outcome focus, explained the fundamental value exchange system and the constraints it faces, differentiated projects from products and services, introduced the concept and benefits of a product-led organization, and highlighted the importance of understanding knowns and unknowns in product development.

The Role of the Product Manager

This part delves into the crucial role of the product manager, defining what constitutes an effective product manager, debunking common misconceptions, outlining the career path, and discussing how teams should be organized to support good product management practices.

Bad Product Manager Archetypes

Due to a lack of formal training paths and prevalent misconceptions, product management often suffers from common ineffective archetypes that hinder value creation. Recognizing these is the first step toward defining what a good product manager does.

• Lack of Formal Training: There are few established paths to learn product management, leading to many individuals entering the role without prior experience or proper guidance.
• Tactile Focus: Training often focuses on tactile tasks like writing requirements or managing meetings, stemming from traditional Waterfall environments.
• Stakeholder Focus: Early training often emphasizes satisfying internal stakeholders rather than deeply understanding customer needs.
• Agile Adoption Without Product Management: Companies eagerly adopt Agile but often miss the crucial front-of-funnel work of generating and validating ideas, as Agile focuses on software production.
• Waterfall Mindset in Agile: Many product managers in Agile settings still operate with a Waterfall mindset, lacking the skills for strategic thinking and user understanding.
• Measuring the Wrong Things: Success is often measured by writing detailed specs or shipping on time, rather than the impact and value of the product.
• Ignoring the “Why”: Effective product management requires understanding the “why” behind building a product; without this, features are often useless.

The Mini-CEO

One of the most damaging and inaccurate archetypes is the “Mini-CEO,” where product managers wrongly believe they have sole authority over their product and can dictate direction, leading to arrogance and alienating their teams.

• Inaccurate Job Description: Many job postings incorrectly describe product managers as “Mini-CEOs,” fostering a misunderstanding of the role’s authority.
• Lack of Direct Authority: Unlike CEOs, product managers typically lack direct authority over people or the power to unilaterally change teams or directions.
• Reliance on Influence: Effective product managers must rely on influencing others to move in a certain direction rather than issuing mandates.
• Arrogance and Alienation: The “Mini-CEO” mindset leads to arrogance, dismissing team ideas and alienating colleagues.
• Focus on Personal Ideas: This archetype is fixated on implementing their own ideas rather than focusing on producing value for customers and the business.
• Lack of Humility: Escaping this trap requires humility, realizing that the job is about delivering value and solving problems, not just implementing one’s own vision.
• Importance of Collaboration: Successful product managers involve their teams, listen to customer problems, and seek data to validate ideas.

The Waiter

Another common archetype is the “Waiter,” a product manager who simply takes orders from stakeholders, customers, or managers without strategic thinking or decision-making, leading to a lack of direction and a focus on quantity over value.

• Order-Taking Role: The waiter archetype is characterized by simply gathering requests and turning them into a list of development items.
• Lack of Goal or Vision: This approach lacks an overarching goal, vision, or strategic framework for decision-making.
• Popularity Contest Prioritization: Without clear goals, prioritization often becomes a popularity contest based on who is making the request.
• The Product Death Cycle: This reactive order-taking leads to implementing ideas without validation, a core element of the product death cycle.
• Customer’s Job vs. PM’s Job: Waiters wrongly believe it’s the customer’s job to come up with solutions, instead of focusing on deeply understanding their problems.
• Reactive vs. Strategic: Waiters are reactive thinkers, lacking the strategic mindset to push back and explore deeper problems.
• Learned Helplessness: Often, there’s a sense of learned helplessness, where waiters don’t believe they can challenge requests or explore alternative solutions.

The Former Project Manager

Many individuals transition into product management from project management roles, but confusing the two disciplines leads to a focus on delivery timelines (“when”) rather than strategic value (“why”), hindering effective product development.

• Blurred Lines: Many companies still mistakenly believe that the project manager and product manager roles are the same.
• Project Manager Focus: Project managers are primarily responsible for the “when” – timelines, milestones, and hitting deadlines.
• Product Manager Focus: Product managers are responsible for the “why” – why are we building this, how does it deliver value, and how does it meet business goals?
• Agile’s Impact: Agile methodologies distribute some project management responsibilities across the team, reducing the need for a dedicated project manager in the traditional sense.
• Lack of Strategic Experience: Individuals transitioning from project management often lack the strategic mindset and experience needed for effective product management, which involves understanding the customer, business, market, and organization.
• Focusing on the “When”: Product managers who don’t fully grasp their role may revert to focusing on delivery timelines rather than strategic value creation.
• Critical Skill Set: Answering the “why” requires a critical skill set for a great product manager.

A Great Product Manager

A great product manager is a skilled facilitator and leader who balances the needs of the business, technology, and design to create products that solve real user problems and drive business value. They lead through influence and focus on understanding the “why.”

• Balancing Multiple Needs: An effective product manager works with teams to create products that meet business needs and solve user problems.
• Interfacing with Disciplines: They must effectively interface with business, technology, and design departments, harnessing their collective knowledge.
• Leading Through Influence: Lacking direct authority, great product managers lead by influencing their teams and the organization, convincing them of the right direction.
• Owning the “Why”: Product managers own the “why” of what they are building, communicating the goal and strategic direction to the team.
• Team Ownership of “What”: The team collectively owns the “what” – the actual product or features being built.
• Strategic and Experimental Approach: Figuring out what to build requires a strategic and experimental approach, with the product manager at the helm of experiments.
• Reducing Risk: Ultimately, the goal of a product manager is to reduce risk by focusing on learning and tackling assumptions scientifically.

Tech Expert Versus Market Expert

Companies often make the mistake of seeking product managers who are deep experts in either technology or the market, when the true expertise needed is in product management itself – the ability to bridge these areas and make informed decisions.

• Misconception of Expertise: A common mistake is seeking product managers who are primarily tech or market experts.
• Product Management Expertise: Great product managers are experts in the discipline of product management, which involves bridging different domains.
• Sufficient Knowledge: They need enough knowledge in technical and market areas to communicate effectively and make informed trade-offs.
• Tech Literacy, Not Fluency: A product manager needs to be tech literate, understanding enough about technology to discuss complexity and make decisions, but not necessarily a coder.
• Learnable Market Knowledge: While market knowledge is valuable, it’s something that can be learned; a product manager needs to know how to leverage market analysts’ skills.
• Balancing Skill Sets: Effective product management involves balancing the skill sets within the team, with the product manager acting as the central bridge.
• Bridging Disciplines: A great product manager carefully balances insights from all disciplines (business, tech, design) to strategize and decide what’s best for the product.

A Great Product Manager (Continued)

This section continues to illustrate the qualities of a great product manager through an example, emphasizing the importance of starting with the “why,” deeply understanding user problems, using data, and involving the team.

• Starting with the “Why”: Great product managers begin by understanding the purpose and desired outcome, aligning with the company’s vision and goals.
• Deep User Empathy: They spend significant time talking to and learning from users to understand their frustrations and pain points.
• Connecting User and Business Goals: They align identified user problems with business objectives, evaluating how solving a problem will contribute to achieving goals.
• Data-Driven Approach: They pull data to understand user behavior and validate assumptions about problems and potential solutions.
• Involving the Team: Great product managers bring their development and design team members to user research sessions to foster shared understanding of problems.
• Focusing on the Problem: They prioritize deeply understanding the problem before jumping to potential solutions.
• Experimentation to Learn: They design and run experiments to validate potential solutions and learn the best way to achieve their goals.

Start with Why

The “why” is the cornerstone of effective product management. Product managers must understand the purpose behind building something and its expected outcome, pushing back on prescribed solutions that lack this foundation. This section also clarifies the difference between a product owner and a product manager.

• The Importance of “Why”: Understanding the purpose, desired result, and success metrics is crucial before diving into solutions.
• Risks of Solution-First Approach: Diving into solutions without understanding the “why” invites the risk of building the wrong thing due to bias.
• Bias Mitigation: Fighting bias requires learning from users and experimenting rather than relying on predetermined plans or handed-down solutions.
• Skipping Success Metrics: Organizations that hand down solutions often neglect setting success metrics and goals, making it impossible to measure impact or make corrections.
• Handicapped by Planning: Poor planning and strategy, where features are committed prematurely, can handicap product managers from effectively exploring and validating.
• Product Owner vs. Product Manager: While a product owner focuses on tactical tasks like managing the backlog, a product manager has a broader strategic responsibility, focusing on defining value and ensuring the right product is built.
• Product Ownership as a Piece: Product ownership is a component of product management, but a good product manager possesses the skills to prioritize work against outcomes, discover value, and manage uncertainty.
• Career vs. Role: Product manager is a career requiring developed skills and experience; product owner is a role played on a Scrum team.

One Role, Many Responsibilities

The responsibilities of a product manager vary based on organizational context, product stage, and leadership level. While foundational skills remain constant, the balance between tactical, strategic, and operational work shifts as a product manager grows in their career.

• Contextual Responsibilities: A product manager’s tasks change based on whether they are on a Scrum team, the stage of the product, and their leadership position.
• Strategic, Operational, Tactical: Responsibilities can be categorized into tactical (day-to-day building), strategic (market positioning, future vision), and operational (tying strategy to tactical work).
• Shifting Balance: As a product manager grows, the percentage of strategic and operational work typically increases compared to tactical work.
• Foundational Skills: Working with development teams, understanding user needs, and analyzing data are foundational skills relevant at any level.
• Scaling Responsibility: As product portfolios grow, product people need to take on a wider overview to ensure everything works together as a system.
• Danger of 100% Operational: A product manager focused solely on operational tasks risks neglecting strategy and visioning work, hindering the success of features.
• Trusting the Team: Pushing project management effort to the team allows the product manager more space for strategic and visioning work.
• Alignment is Key: Senior roles focus on defining vision and strategy, while teams explore and execute, requiring alignment across levels.

The Product Manager Career Path

Establishing a clear and structured career path for product managers is essential for attracting talent, providing growth opportunities, and building a strong, experienced product organization capable of leading a company effectively.

• Lack of Clear Paths: Traditionally, there have been few formalized career paths for product managers, with many entering through lateral moves or promotions from other roles.
• Need for Growing Talent: Companies need to actively cultivate product management talent by creating entry-level positions and mentoring programs.
• Product Management as a Discipline: Effective product management is a discipline that requires experience and practice to master, not something learned in a short course.
• Mentorship is Crucial: Pairing junior product managers with experienced senior product managers is vital for skill development and growth.
• Shortage of Senior Talent: The lack of established entry-level programs contributes to a shortage of experienced product managers in the market.
• Typical Career Levels: The typical career path includes Associate Product Manager, Product Manager, Senior Product Manager, Director of Product, VP of Product, and Chief Product Officer.
• Associate Product Manager: Entry-level role focused on learning the ropes, ideally paired with a senior mentor.
• Product Manager: Works with a team on ideation and execution, focusing more on tactical and operational aspects.
• Senior Product Manager: Individual contributor focusing on complex product problems and charting new territory, balancing strategic and operational work.
• Director of Product: People manager overseeing a group of product managers aligned around a product or product line, responsible for strategic roadmaps and operational effectiveness.
• VP of Product: Oversees strategy and operations for an entire product line, connecting company goals to product line growth, and in larger companies, responsible for financial success.
• Chief Product Officer (CPO): Highest level role overseeing the entire product portfolio, responsible for driving economic success through product growth and interfacing at the executive and board levels.

Organizing Your Teams

The way product teams are structured and organized significantly impacts their effectiveness in product development. Organizing around value streams and strategic goals, rather than technical components or features, is crucial for escaping the build trap and promoting outcome-oriented work.

• Impact of Structure: Team organization is critical for the success of product development.
• Common Organizational Structures: Companies typically organize around value streams, features, or technical components.
• Technical Component Issues: Organizing around technical components can promote a poor product management mindset, leading to teams creating work for components already in a steady state.
• Feature-Based Issues: Organizing around features can lead to an output-oriented mindset, where teams focus on developing more things within their specific feature area rather than aligning with overall goals.
• Loss of Strategic Alignment: When teams are organized around components or features, the work may not be aligned with the overall product strategy and vision.
• Prioritizing Value: Moving beyond component or feature ownership requires aligning work with the overall vision and strategy, prioritizing initiatives that drive value.
• Balancing Coverage and Scope: Effective organization balances ensuring coverage over the product with aligning teams around the goals they are trying to achieve.
• Organizing Around Goals: Organizing teams around strategic goals, as exemplified by TransferWise, allows them to prioritize ruthlessly and focus on achieving specific outcomes.

Marquetly’s Product Team

This section uses the example of Marquetly to illustrate the challenges of poor team organization and the steps taken to restructure around value streams and strategic goals, supported by bringing in more senior product leadership.

• Ineffective Initial Structure: Marquetly’s initial organization around technical components hindered effective product management, leading to teams creating work for already stable areas.
• Lack of Seniority: The company lacked sufficient senior product people to coach and guide the junior product managers.
• Need for Restructuring: The company needed to restructure around value streams to align teams with value delivery and strategic goals.
• Hiring Senior Leadership: Bringing in an experienced Chief Product Officer (CPO) was the first step to provide strategic direction and coaching.
• Aligning Around Value Streams: Restructuring involved identifying the core value streams (e.g., student experience, teacher platform) and organizing teams around them.
• Reducing Redundancy: Organizing around value streams often reveals that fewer people are needed compared to a component-based structure, as teams focus on essential work.
• Importance of Product Vision: Organizational structure should be built in conjunction with a clear product vision, as value streams become apparent through this vision.
• Balancing Seniority and Juniority: The goal is to balance senior and junior team members within the new structure to ensure appropriate scaling and growth.

Mini-recap: This part explored the role of the product manager, identifying common ineffective archetypes, defining the characteristics of a great product manager who understands the “why” and bridges different disciplines, outlining the typical career path from associate to CPO, and emphasizing the importance of organizing product teams around value streams and strategic goals for effective product development.

Strategy

This part focuses on the critical role of strategy in escaping the build trap, defining what constitutes a good strategy, identifying common strategic gaps within organizations, and outlining a framework for strategy creation and deployment across different levels of the company.

What Is Strategy?

A good strategy is not a rigid plan but a deployable framework that guides decision-making and enables action toward achieving desired outcomes. Confusing strategy with a detailed plan is a common pitfall that leads to the build trap.

• Strategy as a Framework: A good strategy is a flexible framework for decision-making, not a detailed, rigid plan.
• Plan-Based Pitfall: Thinking of strategy as a wish list of features or a detailed outline of tasks leads to the build trap.
• Lack of Validation: Committing to detailed plans or feature sets without validation is dangerous and often results in building useless features.
• Difficulty Answering “Why”: When strategy is seen as a plan, teams struggle to articulate why they are building something or how they know it’s the right thing.
• External Influence: Strategy based on consulting advice or competitor actions without internal validation is risky.
• Strategic Planning vs. Strategy: Traditional “strategic planning” often results in detailed task lists tied to budgets rather than a guiding framework.
• Focus on Outcomes: A good strategy transcends feature iterations and focuses on higher-level goals and desired outcomes.
• Long-Term Sustainability: A good strategy should sustain an organization for years, adapting based on data and market changes, not changing yearly or monthly without reason.

Strategic Gaps

Stephen Bungay’s work on strategy deployment identifies three key gaps that arise when companies treat strategy as a plan, causing friction and hindering effective execution: the Knowledge Gap, the Alignment Gap, and the Effects Gap.

• Failure to Achieve Expectations: When strategy is treated as a plan, companies often fail to achieve their expected results.
• Gaps Cause Friction: This failure stems from actions taken to fill three key gaps between outcomes, plans, and actions.
• The Knowledge Gap: The difference between what management wants to know and what the company actually knows, often leading to demands for excessive detail.
• Overcoming the Knowledge Gap: Instead of demanding more detail, management should focus on defining and communicating strategic intents or goals.
• Strategic Intent’s Role: Strategic intents communicate the company’s direction and desired outcomes, pointing teams toward what needs to be achieved.
• Demand for Detail: Lack of clarity and alignment often fuels the demand for more and more detailed information.
• The Alignment Gap: The difference between what people actually do and what management wants them to do (achieve business goals).
• Overcoming the Alignment Gap: Instead of providing detailed instructions, organizations should allow each level to define how it will achieve the intent of the level above.

Strategic Gaps (Continued)

Continuing the discussion on strategic gaps, this section delves into the Alignment Gap and the Effects Gap, highlighting how a lack of alignment and a misguided response to unmet expectations hinder effective strategy execution and autonomous action.

• Misaligned Actions: In companies with an Alignment Gap, team activities don’t connect back to the company’s overall vision and goals.
• Feature Requests from Leadership: Leadership often passes down feature requests rather than expected outcomes, making it difficult to change course even if the features prove ineffective.
• Consequences of Adherence: Adherence to predetermined plans, even when teams know they are building the wrong thing, leads to missed goals and penalization.
• Need for Freedom to Explore: Product teams need the freedom to explore alternative options and adjust their actions based on data, provided they are aligned with strategic intents.
• Leadership Alignment is Crucial: Lack of leadership alignment at the top is a major obstacle to successful product management and strategic execution.
• The Effects Gap: The difference between expected outcomes of actions and what actually happens.
• Misguided Response to Effects Gap: When results fall short, companies often impose more controls, which is counterproductive.
• Enabling Adjustment: Giving individuals and teams the autonomy to adjust their actions based on results is what truly leads to achieving goals.

Creating a Good Strategic Framework

Building an effective strategic framework requires aligning the company’s vision with product development, fostering a continuous evaluation cycle, and recognizing that initiatives are often “bets” with inherent uncertainty, allowing for experimentation and quick course correction.

• Two Parts of Strategy: A good company strategy includes an operational framework (day-to-day activities) and a strategic framework (realizing the vision through product/service development).
• Strategic Framework’s Importance: Getting the strategic framework right is essential for developing great products and services.
• Aligning Vision and Products: A strong strategic framework aligns the company’s strategy and vision with the products developed by the teams.
• Continuous Evaluation: Companies should continuously evaluate their position and take action rather than relying on artificial yearly cycles for strategy and budgeting.
• Initiatives as Bets: Thinking of initiatives as “bets” (Data, Insights, Beliefs, Bets – DIBBs) sets a different expectation, acknowledging uncertainty.
• Embracing Uncertainty: Upper management’s willingness to embrace uncertainty about customer needs fosters an environment that embraces experimentation and innovation.
• Quick Course Correction: This mindset allows for quick course correction when initiatives don’t work as planned.
• Synchronization: Effective strategy communication synchronizes product development and management, with information flowing up, down, and across the organization.

Strategy Deployment

Strategy deployment is the act of communicating and aligning strategic narratives across different levels of the organization, ensuring that the goals and objectives are appropriately tailored to the time scale and context of each level, enabling focused action without being overly prescriptive.

• Interconnecting Stories: Strategies are interconnected narratives told at different time scales throughout the organization.
• Time Scales Matter: Stories must have time scales that are relevant to the people hearing them (e.g., teams thinking in weeks need shorter-term goals than executives thinking in years).
• Setting the Right Level of Goals: Strategy deployment involves setting goals and objectives at the appropriate level for each part of the organization to narrow the playing field and enable action.
• Unconstrained Teams Struggle: Teams without appropriate constraints feel overwhelmed by too many options and are hesitant to act.
• Appropriately Constrained Teams Thrive: Teams with a clear direction set at the right level feel safe to make decisions because their work aligns with organizational goals.
• Avoiding the Build Trap: Lack of appropriate direction, either too prescriptive or too broad, leads to the build trap.
• Levels of Strategy Deployment: In most product organizations, there are four major levels: Vision, Strategic Intent, Product Initiatives, and Options.
• Communication is Key: Strategy deployment requires significant work in communicating and aligning these narratives up, down, and across the organization.

Strategy Creation

Strategy creation is the process of defining the direction a company will take and developing the framework for decision-making. This iterative process, akin to the “Kata” practice, involves understanding the current state, identifying obstacles, and experimenting to reach goals, with information flowing from the teams back up to inform the overall strategy.

• Defining Direction: Strategy creation determines the company’s course of action and establishes the decision-making framework.
• Iterative Process: Strategy creation is an ongoing, iterative process that takes time and focus, not a one-time event.
• Kata Approach: Inspired by Toyota’s Improvement Kata, strategy creation involves systematically tackling problems to reach goals.
• Understanding Vision: The process starts with understanding the company’s vision – where it wants to go.
• Identifying Obstacles: Strategy involves identifying the problems or obstacles preventing the company from reaching its vision.
• Experimentation to Tackle Problems: Experimentation is used to systematically address these obstacles and learn the best way forward.
• Product Kata: A customized approach for product development, the Product Kata involves understanding direction, current state, obstacles, and using experimentation cycles.
• Information Physics: Information flows from the teams’ learning and analysis back up to inform strategic decisions at higher levels, maintaining alignment.

Company-Level Vision and Strategic Intents

The company vision is the foundation of the strategic architecture, providing purpose and direction. Strategic intents are the focused, outcome-oriented goals that communicate how the company plans to achieve that vision in the near term, aligning efforts across the organization.

• Company Vision as Linchpin: The company vision sets the direction and provides meaning for all subsequent strategic levels.
• Framework for Products: A strong company vision provides a framework for thinking about and developing products.
• Vision + Mission: Combining the mission (why the company exists) and vision (where it’s going) into one statement provides a clear value proposition.
• Compelling Vision Statements: Good vision statements are short, memorable, clearly articulated, and provide context on how the company will achieve its aspirations (not just wanting to be a leader).
• Communicating the Vision: Leaders must actively communicate the vision, explaining choices and painting a picture of the future, not just relying on a statement.
• Strategic Intents Explain “How”: Strategic intents communicate the company’s current areas of focus and how they contribute to realizing the vision.
• Time Scale of Intents: Strategic intents usually take one to several years to achieve.
• Aligning to Current State: Intents are aligned with the company’s current state, focusing on the most important things to move closer to the vision.

Strategic Intents (Continued)

This section continues the discussion on strategic intents, emphasizing the importance of keeping the number of intents small for focus, aligning them with business value, and illustrating how this approach shifts decision-making away from prescriptive features to outcome-oriented goals.

• Focus Through Few Intents: Keeping the list of strategic intents small is crucial for focusing the entire organization.
• Higher-Level Focus: Strategic intents should be high-level and business-focused, like entering new markets or creating new revenue streams.
• Company-Wide Impact: Strategic intents are about the whole company’s efforts, not just product solutions.
• Aligning with Business Value: When setting intents, organizations should consider how each part of the company can contribute to achieving business value goals.
• Shift from Prescriptive Features: Setting strategic intents moves decision-making away from leadership dictating features to focusing on desired outcomes.
• Avoiding Peanut-Buttering: Focusing on a few key intents prevents spreading resources thin across too many areas of work.
• Decision-Making at Product Level: Strategic intents align decision-making at the product level with the broader business goals.
• Winning with Intent: Aligned strategic intents empower product development teams to prioritize work that contributes to winning in the market.

Product Vision and Portfolio

The product vision communicates the purpose and value proposition of a specific product, emerging from experimentation and learning. Companies with multiple products manage them within a product portfolio, overseen by the CPO, who ensures alignment with strategic intents and balances investments for overall growth and innovation.

• Product Vision’s Purpose: The product vision communicates why a product is being built and its value proposition for the customer.
• Emerging from Experimentation: Product visions emerge from experimentation around solving user problems, becoming more defined as solutions are validated.
• Avoiding Over-Prescription: The product vision should not detail every feature but focus on the main capabilities and qualities important to the user.
• Anchoring in Problems and Solutions: The product vision and portfolio vision anchor teams in the problems they are solving and the solutions they are exploring.
• Product Vision Ownership: The VP of Product typically owns the product vision, ensuring alignment across teams working on that product.
• New Products from Unmet Needs: If a problem to be solved doesn’t fit the current product vision, it may necessitate creating a new product and managing a product portfolio.
• Product Portfolio Management: Companies with multiple products manage them under a product portfolio, overseen by the CPO.
• Portfolio Vision: The CPO creates a philosophy for how the product portfolio contributes to the company vision, ensuring products work together as a system.

Product Vision and Portfolio (Continued)

This section continues the discussion on product vision and portfolios, emphasizing the CPO’s role in overseeing the portfolio, balancing investments across products and initiatives, and ensuring time and resources are dedicated to innovation to stay competitive.

• CPO’s Role in Portfolio: The Chief Product Officer (CPO) is responsible for setting the direction and overseeing the entire product portfolio.
• Portfolio Questions: The CPO answers key questions about how products work together, their unique value, overall guidelines, and what should be stopped.
• Product Initiatives from Portfolio Work: Product initiatives stem from the work needed across the portfolio to achieve strategic intents and further product visions.
• Balancing Investments: The CPO balances investments, people, and capacity across different product areas to achieve overall success.
• Making Time for Innovation: Building innovation into the portfolio requires dedicating teams and resources to exploring new opportunities, often by saying “no” to other things.
• Amazon’s Innovation Model: Amazon exemplifies building innovation into its portfolio by spinning up secret teams to explore new business areas.
• Strategic Time and Space: Successful companies set aside strategic time and space within their portfolio for innovation initiatives.
• Portfolio as a Framework: The product portfolio acts as a framework for balancing and prioritizing different types of work and investments across the company’s product offerings.

Mini-recap: This part defined strategy as a decision-making framework, highlighted the dangers of strategic gaps, introduced the concept of strategy deployment across different organizational levels, explained the iterative nature of strategy creation using the Kata approach, detailed the importance of a clear company vision and strategic intents, and discussed the management of product visions and portfolios, including the CPO’s role in balancing investments and fostering innovation.

Product Management Process

This part outlines the product management process, focusing on how product managers use the Product Kata to systematically uncover and validate the right problems to solve and the best solutions to build, emphasizing learning and iteration over simply shipping features.

The Product Kata

The Product Kata is a systematic problem-solving process that guides product managers to uncover the right solutions by understanding the direction, evaluating the current state, identifying obstacles, and experimenting to learn, fostering an outcome-oriented mindset.

• Systematic Problem Solving: The Product Kata provides a structured approach to building products from a problem-solving perspective.
• Forming Impactful Habits: Repeatedly practicing the Kata helps product managers develop habits of continuous learning and problem identification.
• Uncovering Initiatives and Options: The Kata process helps in uncovering both product initiatives (larger problems to solve) and options (potential solutions).
• Understanding Direction: The first step involves understanding the relevant strategic intent, product initiative, or vision – the “goal.”
• Evaluating Current State: Assessing where you are in relation to that goal is crucial for identifying what needs to change.
• Identifying Obstacles: Pinpointing the biggest problems or obstacles preventing you from reaching the goal is the core of problem exploration.
• Experimentation Cycle: The Kata leads to planning experiments to tackle the identified obstacle, predicting outcomes (hypothesis), and reflecting on what was learned.
• Iterative Process: The cycle repeats, with learnings from one round informing the next steps in problem or solution exploration.

Context Matters

The specific steps and tools used within the Product Kata vary depending on the context and the phase of the product’s development. It’s crucial to apply the right tools at the right time, avoiding unnecessary experimentation when the problem or a good solution is already well understood.

• Varied Application: The implementation of the Product Kata and the tools used vary based on the context and the stage of the product.
• Phased Approach: The process moves through distinct phases: understanding direction, problem exploration, solution exploration, and solution optimization.
• Avoiding Premature Tools: A common mistake is applying a tool or practice at the wrong stage (e.g., experimenting unnecessarily early).
• Focus on Core Value Proposition: Reserve robust experimentation for problems that are core to your product’s value proposition, where unique solutions are critical.
• Learning from Best Practices: For problems that are not core to your value, learn from existing best practices, implement them, and iterate based on data.
• Experimentation for Uncertainty: Robust experimentation is most valuable when there is a high amount of uncertainty around the solution idea.
• Building to Learn: Design all design and development work to serve the goal of learning, not just shipping features.
• Quality Over Quantity: Focus on building the right things effectively rather than producing a high quantity of potentially useless features.

Understanding the Direction and Setting Success Metrics

Defining success metrics is a critical step in the product management process, enabling teams to quantify their goals and measure progress toward achieving desired outcomes at different levels of strategy, from product initiatives to individual options.

• Quantifying Initiatives: Success metrics are essential for quantifying product initiatives and communicating their potential impact.
• Understanding Product Health: Product metrics provide insights into the health of the product and, consequently, the business.
• Avoiding Vanity Metrics: Focus on actionable metrics that drive decision-making and behavior change, not just impressive but meaningless numbers.
• Actionable Metrics: Convert vanity metrics into actionable ones by adding context, such as a time component (e.g., users this month vs. last).
• Avoiding Output Metrics: Do not measure success based on output-oriented metrics like features shipped or story points completed, as these don’t tie back to business value.
• Product Frameworks: Utilize frameworks like Pirate Metrics (AARRR) and HEART metrics to guide the selection of appropriate product goals.
• Pirate Metrics (AARRR): Measures the user lifecycle through the product funnel: Acquisition, Activation, Retention, Referral, and Revenue.
• HEART Metrics: Measures Happiness, Engagement, Adoption, Retention, and Task Success, often used for specific products or features.

Setting Direction with Data

Product metrics at various levels of strategy, including initiatives and options, are crucial for setting direction and measuring progress. Utilizing data platforms and setting realistic goals based on investigation are key components of this process.

• Connecting Metrics to Business: Product metrics ultimately contribute to business outcomes like revenue or cost, connecting product activities to the overall business health.
• Metrics at Every Level: It’s important to have success metrics at each level of strategy (initiative, option) to measure progress along the way.
• Lagging vs. Leading Indicators: Retention is a lagging indicator; measure leading indicators (activation, happiness, engagement) that predict future outcomes.
• Mutually Destructive Pairs: Use a system of metrics that balance each other out to prevent gaming a single metric (e.g., measuring both acquisition and the retention of those acquired users).
• Data Platforms: Implementing a metrics platform (e.g., Amplitude, Mixpanel) is essential for a product-led company to enable data-driven decision-making.
• Realism in Goal Setting: Set realistic goals based on data, historical trends, and an educated hypothesis about what is feasible.
• Investigation Before Metrics: You cannot set effective success metrics without first investigating and understanding the underlying problem.
• Problem-Relevant Metrics: The success metrics set should be relevant to the specific problem discovered and the solution implemented to solve it.

Problem Exploration

Deeply understanding the customer’s problems is the foundation of effective product management. This phase of the Product Kata involves using various research techniques to identify pain points, uncover root causes, and validate that a problem is truly worth solving before jumping to solutions.

• Voice of the Customer: Product managers need to actively talk to customers to understand their problems deeply.
• Beyond Data Analysis: While data is important, it doesn’t tell the whole story; talking to humans is essential for understanding the context of problems.
• Generative Research: Problem-based user research is generative, aiming to discover the problems that need to be solved, not just test existing solutions (evaluative research).
• Identifying Pain Points and Root Causes: The goal is to pinpoint the customer’s pain and the underlying reasons for that pain.
• Risk of Solving Before Understanding: Rushing to solve problems before understanding their root causes is risky and relies on luck for success.
• Fighting the Problem-Solving Instinct: It’s easy to jump to solutions; product managers must consciously focus on falling in love with the problem instead.
• Problem is Not Lack of Feature: Avoid mistaking the lack of a specific feature for the actual user problem; delve deeper to understand the underlying need.
• Validating the Problem: Use experiments and research to validate whether a perceived problem is widespread and truly worth addressing.

Breaking Down Barriers and Getting Creative

Obstacles like corporate bureaucracy can make it difficult to talk to customers. This section emphasizes the need for product managers to be creative in finding ways to access and learn from users, ensuring that valuable customer insights are obtained despite constraints.

• Bureaucracy as an Obstacle: Corporate structures can sometimes hinder direct interaction with customers.
• Getting Creative: Product managers need to find creative ways to bypass or navigate these barriers to access customer insights.
• Learning Some Information is Better: Even limited access to customer feedback is valuable; the goal is to learn as much as possible within constraints.
• Alternative Access Methods: Explore working with sales or account managers, utilizing online tools (like Qualaroo), or leveraging personal networks.
• Focusing on the “Why”: When customers suggest solutions, push back to understand the underlying problem and their desired outcome (“why”).
• Customer’s Role: Remember that it’s the product manager’s job to ask the right questions and uncover the problem, not the customer’s job to provide solutions.
• Navigating Constraints: Successfully navigating organizational constraints to gather customer insights is a key skill for a product manager.
• Value of Customer Insight: Obtaining valuable customer insights is crucial for effective problem exploration and ultimately building the right product.

Validating the Problem (Continued)

Problem validation is an ongoing process within the Product Kata. This section illustrates how initial research can uncover deeper, more significant problems than initially perceived, emphasizing the importance of continuous learning and adjusting the focus based on new insights.

• Uncovering Deeper Problems: Initial problem exploration can reveal underlying issues that are more significant than the initially identified problem.
• Adjusting Focus: Based on new learnings, the team should adjust its focus to tackle the more impactful problem that stands in the way of achieving its goals.
• Generative Solution Research: Sometimes, the next step in problem exploration involves generative solution research to understand what users value in a potential solution.
• Beyond Proving a Hypothesis: Generative research is about gaining a deeper understanding of user needs and desires related to solutions, not just validating a specific hypothesis.
• Identifying Solution Factors: Through this research, teams can identify the types of things that matter most to users in a potential solution.
• Iterative Learning: The process of problem exploration and validation is iterative, with each step building on the previous learnings.
• Following Up on Insights: When surprising information emerges, follow up with users to understand the context and true nature of the problem.
• Quantifying the Problem: After identifying the deeper problem, quantify its impact to understand its scale and importance.

Solution Exploration

Once the problem is well-understood and validated, the focus shifts to solution exploration. This phase involves generating multiple potential solutions and experimenting with them to learn which ones effectively address the user’s problem and move the team toward its goals.

• Shift to Solutions: After understanding and validating the problem, the process moves to exploring potential solutions.
• Experimenting to Learn: The primary goal of solution exploration is to learn which solutions are most effective, not necessarily to build a final, scalable product.
• Generating Multiple Options: Don’t jump to the first idea; generate and consider multiple potential solutions.
• Testing Effectiveness: Experimentation helps to determine whether a solution effectively addresses the user’s problem.
• Moving Toward Goals: Successful solutions move the team closer to achieving its defined goals.
• Iterating on Solutions: Based on experimentation results, iterate on solution ideas, refining them based on what is learned.
• Killing Bad Ideas: Embrace the opportunity to quickly kill solution ideas that don’t prove effective, saving time and resources.
• Focus on Value: Ensure that the chosen solution ultimately delivers value to both the user and the business.

Experimenting to Learn

Experimentation is a core practice in solution exploration, focusing on “building to learn” rather than “building to earn.” This involves designing small-scale tests to validate hypotheses quickly and efficiently, reducing the risk of investing in ineffective solutions.

• Building to Learn: Experimentation is fundamentally about building tests to gain knowledge, not to create a finished product for revenue.
• Understanding Customers: Experiments help to deepen understanding of customer behavior and needs.
• Validating Value: They provide evidence of whether solving a particular problem delivers value to users.
• Quick Validation: Experiments should be designed to quickly prove or disprove a hypothesis.
• MVP Misconception: Avoid the misconception of MVP as simply the first release; focus on the “minimum amount of effort to learn.”
• Solution Experimentation: Refer to this phase as solution experimentation to emphasize the learning objective over building a final product.
• Temporary Nature: Experiments are not designed to be long-lasting or scalable solutions.
• Reducing Risk: Experimenting early reduces the risk of investing significant time and resources in the wrong solutions.

Experimenting to Learn (Continued)

This section continues the discussion on experimentation techniques, detailing specific types like Concierge, Wizard of Oz, and Concept Testing, explaining their purpose and how they can be used to gather feedback and validate solutions at different levels of scale and formality.

• Concierge Experiments: Deliver the end result manually, with customers aware it’s not automated; good for gaining deep understanding through close interaction.
• Benefits of Concierge: Quick to start, no coding required, provides rich qualitative feedback, and helps learn how to build the software correctly later.
• Scalability Limitations: Concierge experiments are labor-intensive and not designed for large-scale use.
• Wizard of Oz Experiments: Look and feel like a real, finished product to the customer, but are manually operated on the backend; good for testing demand at scale.
• Zappos Example: Zappos famously used a Wizard of Oz approach to validate demand for buying shoes online.
• Risk of Leaving Up: Leaving Wizard of Oz experiments running too long is risky due to their manual nature.
• Combining Techniques: Wizard of Oz can be combined with other techniques like A/B testing for further validation.
• A/B Testing: Splitting traffic to test different solution ideas; useful when there’s sufficient traffic for statistical significance.

Experimenting to Learn (Continued)

This section continues the discussion on experimentation techniques, introducing Concept Testing and discussing when robust experimentation might not be necessary, highlighting the importance of choosing the right tool for the level of uncertainty and risk involved.

• Concept Testing: High-touch interaction to demonstrate or show solution concepts (landing pages, prototypes) to gauge feedback.
• Generative or Evaluative: Can be generative (understanding desires) or evaluative (testing a hypothesis with a clear ask).
• Landing Pages: A common concept testing method with an “ask” (e.g., email signup) to measure interest.
• Dropbox Example: Dropbox used a simple video (concept testing) to demonstrate its value proposition to investors and secure funding.
• When Robust Experimentation is Not Needed: Robust experimentation is not always necessary, especially when the problem and solution are well-understood or based on best practices.
• Prototypes: Useful for testing specific user flows or features when the problem is known but the best user experience for the solution needs to be explored.
• Timing of Prototypes: Prototypes are best used after problem exploration and initial solution ideas have emerged.
• Choosing the Right Tool: Select experimentation methods based on the amount of uncertainty, risk, and the specific questions that need to be answered.

Experimenting in Complex Industries

Experimentation is not limited to consumer software; it can be applied in complex industries with long development timelines and hardware components to reduce risk and learn quickly, requiring creativity in designing tests that simulate the desired functionality or user experience.

• Experimentation is Universal: Experimentation can and should be applied across all industries, regardless of complexity or development timelines.
• Reducing Risk in Complex Systems: Experimenting in complex industries helps mitigate the risk of costly failures by validating components and user needs early.
• Creativity in Experiment Design: Finding ways to simulate functionality or user experience is key when working with hardware or long development cycles.
• Learning from Simulation: Simulating the product or components allows for rapid learning without the time and cost of full manufacturing or development cycles.
• GiveVision Example: GiveVision used a phone strapped to glasses to simulate their “seeing” technology for sight-impaired users, learning valuable feedback quickly.
• Identifying Important Problems: Early research and observation in complex industries help identify the most critical problems worth solving.
• Iterative Approach: Even with long timelines, an iterative approach through experimentation helps refine the solution and gain confidence.
• Avoiding Guesswork: Experimentation prevents relying solely on guesswork when building complex systems.

Experimenting on Internal Products

The principles of product management and experimentation are equally applicable to internal tools and products. Treating internal users with the same focus and rigor as external customers leads to improved efficiency, employee satisfaction, and reduced operating costs.

• Internal Tools are Products: Internal tools and products should be treated with the same product management principles as external-facing products.
• User Experience Matters: The user experience of internal tools directly impacts employee efficiency and satisfaction.
• Applying the Product Kata: Use the Product Kata to understand the direction, diagnose problems, explore solutions, and optimize internal tools.
• Internal User Research: Conduct research with internal users to understand their pain points and needs when using tools.
• Experimentation Techniques: Apply experimentation techniques like concierge, concept testing, and prototyping to internal tools.
• Easier Access to Users: Internal users are often more accessible for research and testing.
• Improved Efficiency and Satisfaction: Focusing on internal tools leads to happier employees who can get more done, reducing operating costs.
• Avoiding Neglect: Internal tools are often neglected, but they are crucial for the company’s overall operational effectiveness.

Choosing the Right Solution at Marquetly

This section concludes the product management process by illustrating how Marquetly’s team used experimentation and data to evaluate potential solutions, make a “build, partner, or buy” decision, and build a business case for senior leadership based on validated outcomes.

• Evaluating Options: After validating the problem, the team evaluates different solution options.
• Build, Partner, or Buy: Consider different approaches to implementing the solution, including building in-house, partnering with another company, or acquiring existing technology.
• Risk Mitigation: Experimentation helps to mitigate risks associated with different solution approaches by testing feasibility and user adoption.
• Iterative Experimentation: Conduct multiple rounds of experimentation to refine the solution and gain confidence before committing significant resources.
• Measuring Success: Clearly define success metrics for experiments to determine whether the chosen solution is effective.
• Building a Business Case: Use the data and learnings from experimentation to build a strong business case for senior leadership, demonstrating the validated outcomes.
• Data-Driven Decisions: Rely on data from experimentation to inform decisions about which solution to pursue.
• Aligning with Strategic Intents: Ensure the chosen solution aligns with the company’s strategic intents and contributes to achieving broader business goals.

Building and Optimizing Your Solution

Once a solution is validated, the focus shifts to building and optimizing the product. This involves translating the validated vision into a product, prioritizing work effectively, and defining “done” not by shipping but by achieving the desired outcomes and continuously iterating based on metrics.

• Translating Vision to Product: After validating a solution, translate the evolving product vision into a tangible product.
• Tools for Alignment: Use tools like North Star documents and story mapping to align the team around the product vision and the work needed.
• North Star Document: Explains the product’s problem, proposed solution, key success factors, and expected outcomes, providing context for a wide audience.
• Story Mapping: Helps teams break down work, align around goals, and understand the user journey and necessary features.
• Prioritizing Work: Effective prioritization is crucial for determining which features to build in the first version and subsequent iterations.
• Cost of Delay: Utilize frameworks like Cost of Delay to prioritize work based on urgency and value, optimizing for capturing maximum value at the right time.
• Trade-offs in Prioritization: Consider the trade-offs between scope, value, and time to market when prioritizing for the first release.
• Avoiding Overscoping: Avoid overscoping the first release, which can delay time to market and lead to missed opportunities.

Building and Optimizing Your Solution (Continued)

This section continues the discussion on building and optimizing solutions, emphasizing the importance of the “Definition of Done” being tied to achieving outcomes, the iterative nature of product development even after the first release, and the necessity of continuous learning and problem diagnosis based on metrics.

• Definition of Done: Redefine the “Definition of Done” to mean achieving the desired outcomes and goals, not just shipping features.
• Beyond the First Version: The work is not complete after shipping the first version; continuous iteration is needed to reach and maintain goals.
• “Version 2 is the Biggest Lie”: Avoid the mentality of shipping a first version and moving on without measuring outcomes and iterating.
• Success Criteria for Launch: Set clear success criteria for the first release to measure its impact and guide subsequent iterations.
• Using Metrics in the Kata: Use the success criteria in the Product Kata to diagnose problems hindering goal achievement and systematically tackle them.
• Continuous Diagnosis: Maintain a mindset of continuously diagnosing problems and trying to understand how to solve them, even after launch.
• Building with Intent: This iterative, outcome-focused approach ensures you are building with intent and escaping the build trap.
• Organizational Support: Success in this process depends on an organizational environment that supports experimentation, learning, and outcome-oriented work.

Mini-recap: This part detailed the product management process, introducing the Product Kata as a problem-solving framework, explaining the importance of context and phase-appropriate tools, outlining how to set direction and success metrics using data and frameworks, guiding through problem exploration and validation techniques, describing various solution experimentation methods, and discussing the process of building and optimizing solutions, emphasizing outcome-based definitions of “done” and the importance of continuous iteration.

The Product-Led Organization

This final part explores the crucial organizational components that underpin a product-led company, including outcome-focused communication, aligning rewards and incentives with desired behaviors, fostering a culture of safety and learning, adopting a venture capitalist-like budgeting approach, and prioritizing customer centricity throughout the organization.

Outcome-Focused Communication

Effective communication is vital for a product-led organization, ensuring visibility into progress toward outcomes at all levels. Establishing a consistent cadence of meetings tailored to different audiences helps maintain alignment and empowers teams.

• Visibility is Key: Transparency into progress helps leaders trust teams and grant autonomy.
• Preventing Regression: Consistent communication of progress toward outcomes prevents companies from reverting to old, output-focused habits.
• Tailored Communication: Communication should be tailored to the specific audience and their level of focus (e.g., executives focusing on strategic intents, teams on options).
• Matching Cadence to Strategy: The frequency of communication should align with the time horizon of the strategic level being discussed.
• Quarterly Business Reviews: Senior leadership discusses progress towards strategic intents and financial outcomes.
• Product Initiative Reviews: Focus on progress of options against product initiatives, preliminary experimentation results, and funding decisions for product development.
• Release Reviews: Showcase features ready to ship, providing visibility into the pipeline for marketing, sales, and executives.
• Beyond Meeting Decisions: Meetings are for indicating progress and raising flags; decision-making often happens outside these formal cadences.

Roadmaps and Sales Teams

Roadmaps in a product-led organization are strategic tools that communicate direction and the current stage of product development, not rigid Gantt charts. Effective communication about roadmaps, especially with the sales team, is crucial for alignment and building strong working agreements.

• Roadmaps as Strategic Tools: View roadmaps as explanations of strategy and product stage, not fixed delivery schedules.
• Living Roadmaps: Roadmaps should be continuously updated to reflect new learnings and changing priorities.
• Tailored Communication: Communicate roadmaps differently depending on the audience (internal teams vs. external sales).
• Key Roadmap Components: Include themes, hypotheses, goals/metrics, stage of development, and milestones.
• Standardized Stages: Align on terminology for development stages (Experiment, Alpha, Beta, GA) for clear communication.
• Working Agreements with Sales: Establish clear agreements on what the sales team can communicate to customers based on development stages (e.g., only GA products).
• Enabling Sales Strategy: Product management activities and roadmaps should enable and support the sales strategy.
• Reducing Tension: Clear communication and working agreements reduce tension between product and sales teams.

Product Operations

As product organizations scale, managing processes, reporting, and coordination becomes complex. A product operations team is crucial for streamlining these operational tasks, enabling product people to focus on core product work and ensuring effective communication and alignment across the organization.

• Scaling Challenges: Tracking progress, goals, and processes becomes difficult as product teams grow.
• Streamlining Operations: A product operations team is dedicated to streamlining operational and process work for product teams.
• Reporting to CPO: In larger organizations, product operations typically reports to the CPO, often led by a VP-level leader.
• Key Responsibilities: Includes collecting and reporting data, managing analytics platforms, standardizing processes, and organizing critical meetings.
• Enabling Informed Decisions: Product operations helps product people make informed decisions by surfacing relevant data and reports.
• Focusing on Core Work: By handling operational tasks, product operations allows product managers and leaders to focus on strategic and tactical product work.
• Criteria for Inputs/Outputs: Product operations defines the criteria for how work is reported and shared, not how teams build the product.
• Efficiency Engine: The product operations team acts as an efficiency engine, aiming to automate and optimize processes, ideally remaining lean.

Rewards and Incentives

Aligning rewards and incentives with outcome-oriented behaviors is critical for fostering a product-led culture. When employees are rewarded for shipping features rather than achieving goals and learning, it reinforces the build trap and stifles innovation.

• Motivators for Behavior: Rewards and incentives significantly influence employee behavior.
• Misaligned Incentives: Tying bonuses or compensation solely to shipping features reinforces the build trap and output-oriented mindset.
• Penalization for Not Shipping: Companies that penalize teams for not delivering on predetermined feature lists, even if those features are ineffective, create a perverse incentive to build the wrong thing.
• Stifling Innovation: This type of reward structure discourages experimentation and trying new things for fear of not meeting delivery deadlines.
• Outdated Measurement: Holding people accountable to new ways of working while judging their success with outdated, output-focused methods is counterproductive.
• Pushing Back: Product managers and employees can and should push back on misaligned reward structures, advocating for outcome-based incentives.
• Focus on Business Forward: Rewards should incentivize moving the business forward, achieving outcomes, learning about users, and finding business opportunities.
• Sales Incentives: Adjusting sales incentives (e.g., tying to retention numbers) can mitigate the risk of overpromising or targeting the wrong customers solely for commission.

Safety and Learning

A culture of psychological safety is essential for product-led organizations, enabling teams to experiment, take calculated risks, and learn from failures without fear of severe reprisal. Leaders must trust their teams and provide boundaries for experimentation.

• Psychological Safety: A culture where employees feel safe to take risks, experiment, and admit failures is crucial for innovation.
• Trust from Leadership: Product managers need trust from the organization to explore different options and push boundaries.
• Experimentation as Risk Mitigation: Experimentation is the ultimate risk-management strategy, allowing for quicker, quieter, and less costly failures than large-scale product launches.
• Learning from Failure: Failure should be viewed as an opportunity to learn and inform future decisions.
• Avoiding Slow Failure: The most dangerous failure is failing slowly by releasing products that don’t deliver value and never measuring their impact.
• Quick, Quiet Failure: Encourage small-scale, early failures that provide valuable learning without significant cost or public exposure.
• Boundaries for Experimentation: Leaders should set boundaries for experiments (time, budget, user population) to manage risk while still allowing for exploration.
• Demonstrating Value of Learning: Product managers can gain buy-in by demonstrating how experimentation helps de-risk solutions and leads to better outcomes.

Budgeting

Traditional annual budgeting based on predetermined deliverables hinders a product-led approach, incentivizing spending regardless of value and preventing agility. Adopting an investment-minded approach, similar to venture capitalists, allows for funding based on validated outcomes and progress toward strategic goals.

• Annual Budgeting Issues: Annual budgeting based on predetermined deliverables incentivizes spending regardless of value and prevents teams from changing course.
• Penalization for Not Spending: Companies that penalize teams for not spending their full budget discourage efficiency and finding cheaper solutions.
• Killing Agility: Rigid annual budgets prevent rapid learning and iterating throughout the year.
• VC-like Approach: Product-led companies budget and invest based on validated outcomes and the stage of their work, similar to how venture capitalists fund startups.
• Funding Based on Progress: Allocate funds to initiatives as they demonstrate progress and certainty toward achieving desired outcomes.
• Investment Stages: Fund exploration with smaller amounts, and allocate larger investments as opportunities become validated and ready for scaling.
• Focusing Teams: This approach focuses teams on achieving specific outcomes to secure further funding.
• Preventing Overspending: Tying budgeting to progress and validated outcomes helps prevent overspending on ineffective initiatives.

Customer Centricity

Being truly customer-centric is a fundamental requirement for a product-led organization. It involves deeply understanding customer needs and desires, prioritizing their experience, and ensuring that all decisions and actions are guided by creating value for the customer.

• Core Requirement: Customer centricity is essential for becoming truly product-led.
• Understanding Customer Needs: It involves putting yourself in the customer’s shoes and understanding what would make them happy and move the business forward.
• Guiding Decisions: Customer centricity should guide all decisions and actions within the organization.
• Examples of Customer-Centricity: Companies like Amazon, Netflix, and John Deere demonstrate customer centricity through their focus and practices.
• Prioritizing Customer Experience: A customer-centric culture prioritizes delivering a positive experience for the customer.
• Deep Customer Understanding: It requires actively seeking to deeply understand customer needs and desires through research and interaction.
• Beyond Processes: While processes are important, true customer centricity is embedded in the organizational culture and mindset.
• Value Exchange Focus: Customer centricity is crucial for figuring out what products and services will effectively fulfill the value on the customer side of the value exchange.

Marquetly: The Product-Led Company

This section provides a concluding narrative on Marquetly’s transformation journey, highlighting how the implementation of product-led principles, including outcome-oriented mindsets, strategic prioritization, experimentation, and leadership buy-in, enabled the company to escape the build trap and achieve significant success.

• Transformation Takes Time: Escaping the build trap and becoming product-led is a process that takes time and effort.
• Overcoming Output Mentality: Companies must overcome a long-standing output-oriented mindset among employees.
• Results Drive Buy-in: Demonstrating tangible results and achieving strategic intents drives buy-in from those initially resistant to change.
• Strategic Prioritization: Prioritizing strategy on a rolling basis, rather than in artificial yearly cycles, allows for greater focus and flexibility.
• Investment-Minded Budgeting: Adopting a VC-like budgeting approach, funding initiatives based on validation, leads to more effective resource allocation.
• Killing Ideas Early: Being willing to kill ineffective ideas early frees up resources to focus on what truly matters for achieving goals.
• Leadership Buy-in is Crucial: The CEO’s understanding and adoption of the product-led mindset were critical for the transformation’s success.
• Empowering Product Leaders: Surrounding oneself with smart product leaders and trusting teams to achieve outcomes empowers the organization.

Big-Picture Wrap-Up

Escaping the build trap and becoming product-led is a transformative journey that requires a fundamental shift in how an organization operates and thinks about value creation. It’s about prioritizing outcomes over outputs, fostering a culture of learning and psychological safety, and empowering product teams to deeply understand and solve customer problems in alignment with strategic goals. This change is challenging but essential for sustainable growth, innovation, and ultimately building products that customers truly love.

• Core Lesson: The most important lesson is the necessity of moving from an output-focused mindset to an outcome-focused mindset, where success is measured by the value delivered to customers and the business.
• Next Action: Evaluate your current organizational structure, processes, and incentives to identify areas that reinforce the build trap. Begin advocating for changes that promote outcome-oriented thinking and empower product teams.
• Core Lesson: Effective product management is the key to navigating uncertainty, reducing risk, and consistently delivering value.
• Next Action: Invest in developing the skills and capabilities of your product managers, focusing on teaching them how to understand the “why,” conduct research, and experiment to learn.
• Core Lesson: Strategy is a dynamic framework that guides decision-making and enables action, not a static plan.
• Next Action: Work with leadership to define a clear company vision and a few focused strategic intents that align the entire organization towards desired outcomes.
• Core Lesson: Building products is about solving problems for users, not just shipping features.
• Next Action: Implement or refine a product management process (like the Product Kata) that emphasizes problem exploration, solution validation through experimentation, and continuous iteration based on metrics.
• Core Lesson: Organizational culture, policies, and incentives are powerful drivers of behavior and must support a product-led mindset.
• Next Action: Re-evaluate your reward structures and budgeting processes to incentivize achieving outcomes and learning, not just shipping features.
• Core Lesson: Customer centricity is at the heart of being product-led.
• Next Action: Create channels and a culture that encourage product teams to get close to their customers, understand their needs, and use those insights to drive product decisions.