The Three Phases Of Great Tech Companies

Startup Aug 14, 2017

The different phases organizations go through to reach a state where great Product Managers flourish.

Max Bennett wrote a post on the difference between bad, good and great Product Managers. His explanation is spot on, but purely from the perspective of an individual PM.

I want to take this one step further, as PM’s are dependent on the organization. Being a PM is not a one-man show. To be successful you need to interface with many different departments.

You can be a great Outcome Thinking PM, but if your organization is still stuck in Feature Factory mode it is difficult to focus on outcomes, if not impossible.

The approach your company has towards developing products is what matters most. Organizations go through three distinct phases to reach a state where great PM’s will flourish.

Phase 1: Feature Factory

Almost all organizations start out in this phase. The company does not have product-market fit and vision. The organization has a vague and often implicit idea of the problem they are solving.

Feature Factories focus on shipping features. Features appear from anywhere in the organization. There is little structured process to decide what to work on and what not.

Release of features is celebrated. The company motto seems to be ship and forget. Once a feature has been completed the organization moves on to the next big thing and does not look back.

Feature Factories focus on getting their delivery pipeline right. The goal is to churn out as many features as possible. More features means more value. That’s why they love a long Product Backlog that resembles a Christmas Wishlist. It represents a gold mine of valuable improvements.

Phase 2: Solution Producer

The company realizes a lot of cool features are not panning out as they should. The giant Product Backlog puts a lot of pressure on everyone. Each Backlog Item is like a monkey. All these monkeys need to be fed and nurtured. This costs a lot of time and keeps people from performing valuable work. Everybody gets frustrated and people start thinking: there must be a better way!

The company sets up a discovery pipeline: a process for managing the Product Backlog, while taking into account relevant stakeholders. The discovery pipeline forms the process before you start working on something. Everybody needs to follow the process, no exceptions. What should we work on and why? What is the problem we should be solving? How will it work? There is a lot more emphasis on research before working on something.

As a consequence of the structured process, PM’s start to say no a lot more often. The organization develops a clearer vision as they start understanding the customer problems. Developers understand what the PM wants to achieve and surprise him/her by making solutions better than expected.

The company shifts from shipping features to producing solutions to solve problems. The company starts delivering less features, but with higher quality and more value for the customer.

Phase 3: Validation Machine

As the vision and problems needing to be solved become more clear, the company becomes more confident about the direction of the product. The company knows the problems they want to solve and now they want to be sure they are solving them good enough. The organization is now able to focus on achieving outcomes.

The company starts setting up a validation pipeline. It is no longer good enough to react when KPI’s go down. The approach to data analysis switches from reactive to proactive. Before development starts, there needs to be a clear hypothesis how it positively affects outcomes. After release, features are rigorously validated to check if they meet desired outcomes.

Features not meeting desired outcomes are adjusted or rolled back. The organization focuses on outcomes and has a clear vision on their product. There is a well defined process before, while and after working on a feature, which is why this phase is called: Validation Machine. The whole company has a complete pipeline aligned and geared towards achieving desired outcomes.

Validation machine: complete pipeline aligned and geared towards achieving desired outcomes together with a feedback loop.

The product has a lot more focus and few poor features are developed. When they do see the light of day, they are quickly killed off or improved. The company starts delivering less features but really starts nailing them, because there is a tight feedback loop with desired outcomes.

Moving Through Phases Is Hard

Without the right collaboration between departments it is not possible to be a great PM. Different departments need to work together to achieve the right goals. There needs to be a complete pipeline from discovery, delivery to validation, together with a tight feedback loop.

Being aware of the context you need to operate in as a Product Manager helps to understand what is currently missing to take it the next level. You need to help set the right context, before you can perform at the level you want to operate in.

There is no straightforward recipe to move your organization between phases. Organizational change is hard. There are countless books on this subject. What works to convince your organization to make changes might not necessarily work for another. Even if convincing succeeds, getting agreement on the right changes to make is difficult.

If you gain agreement on the right changes to make, then you need to evaluate and adapt if necessary. When you find a process that works well, you need to make sure to stick to it. It is easy to fall back to old ways under time pressure. The sweet comfort of old routines that brought us so far will always remain appealing.