8 Reasons Product Functions Fail
In this latest article, Dragon Argent analyses some of the common mistakes' product functions make, what impact these mistakes can have, and how to avoid them. We’ve done this in conjunction with our partner, Skull Mountain, the UK’s leading Digital Product Management consultancy.
This is a longer than usual article as we’re keen to explore this topic in some detail and if you’d like to follow up on the themes addressed, we’d love to put you in touch directly with Skull Mountain.
1. Lack of Vision.
What’s the issue?: This is by far the most common mistake – lack of consensus around the vision, lack of understanding of the vision, or a lack of vision entirely.
What’s the impact?: Without vision, no one knows what they are working towards and therefore nothing can be achieved. If you can’t define strategy or goals, then you can’t validate anything.
We have also seen serious disagreement here within businesses. A strategy to ‘maximise monthly profit’ vs ‘build enterprise value for a sale’ couldn’t be more different. Subsequently, we see many product functions drive forward entire roadmaps when they don’t have clarity on why they are even there in the first place.
How to avoid this: Structure your roadmaps to articulate from the bottom up: what problem statements your features and functionality are solving, what objectives are being met by solving these problems, what goals these objectives are driving towards and why these goals are meeting your ultimate business focus – your vision.
2. Poor Goal Definition.
What’s the issue?: All too often we see goals defining deliverables such as “our priority goal for Q2 is to launch an app” or goals defining initiatives like “increase customer experience”. On the face of it, these goals are utterly meaningless. Why? Because they simply don’t define where the business needs to be at a time in the future.
A goal serves as a statement of where a business needs to be and by when, to continue to grow and win against competitors. This then enables supporting teams such as product, marketing, engineering or financial to have aligned functions, meet milestones of achievements and ensure strategic targets are met.
What’s the impact?: It is critical that product teams can talk this language and define goals, as it is ultimately how you steer a business. Your product function should know exactly where the business / product / service needs to be to be winning and it should be ensured that all other functions are working towards providing the solutions to get there.
How to avoid this: Very strong and clear communication between your product function and business leadership is vital to articulate exactly where the business needs to be for it to be successful.
3. Chasing Output, not Value.
What’s the issue?: All too often product functions focus on output – delivery of products, services and the relentless pursuit of new features and functionality. Yes, that is what commonly drives the most value, but it would take a brave product function to advocate stopping and standing down an engineering team for a few sprints, even if that was the best and most valuable thing to do for the business.
What’s the impact?: It is critical that product functions and product leaders don’t fall into an output trap – delivery for deliveries sake. If you have a culture that is too skewed towards delivery as a benchmark of success, we would be confident that you are not optimising your investment in growth.
How to avoid this: Having a value-led culture and supporting the methodology in your product function means your teams now have the confidence to spend a significant amount of their time and energy figuring out where value lies and investing more wisely for growth. Get this right, and you should see stronger, faster growth and a team that constantly questions where value lies.
4. Falling Foul of Individual Bias
What’s the issue?: This is a tricky issue to articulate - it comes from personal experience as much as observation. There is an inherent bias in product roles that can make it extremely difficult to impartially promote the right thing for the business vs being successful as an employee within that business.
What’s the impact?: The impact is obvious – your product function won’t be encouraged to be impartial or to be bloody-minded about maximising your investment in achieving your businesses goals. It’s very hard to be impartial from within an organisation.
How to avoid this: Again, this comes back to clear goals and vision and a value led mindset. If you get that in place, it will be very hard for impartiality to exist and much easier for people to show and feel successful in delivering value to the business.
5. Ignoring Holistic Customer Value
What’s the issue?: Some of the best product people come from non-product backgrounds. They happen to be the best because they can see the bigger picture of the wider business context and more importantly, the entire customer lifecycle and experience. Today, technology is so far along that it should be viewed in 98% of cases as a supporting enabler to business and customer needs, not the solution.
What’s the impact?: Having a product function that focuses too much on technology as a solution means that you are only managing one aspect of the customer lifecycle, the product experience. You won’t be able to ensure that you are acquiring the right customers – those that retain most profitably. A great metric here is to look at your payback per customer in number of weeks. It is not about the acquisition of customers or retention of customers; it is about acquiring retention.
How to avoid this: You can only acquire retention when you know intimately who the right audiences are for your product or service, what propositions work for them, how to onboard them and how to give them an amazing long term experience. This requires product functions to manage the full customer lifecycle.
6. Celebrating False Validation
What’s the issue?: False validation is a brutal and difficult issue to diagnose but, in essence, it is the false validation that you are or have achieved product market fit.
An example of this would be to imagine a digital marketplace that connects businesses to service suppliers. The team have just launched, they have huge praise of the service, lots of supplier sign ups and lots of traffic/ engagement. The team celebrate the successful launch and plough on with this success.
Nevertheless, without sign ups and conversions from the paying businesses, this is false validation. It is very easy to get a supplier to sign up and be on the service, however it is brutally hard to get a business to sign up and then purchase a service too.
What’s the impact?: The impact is extreme – you can exhaust your entire runway or waste years of investment building features and functionality or serving the wrong customers for your business. Ultimately you can crash the business entirely.
How to avoid this: By being ruthless with metrics and asking these key questions: what is servicing my business goals, by how much and why? This should be a relentless mantra.
7. Hiding Behind Process
What’s the issue?: Most people truly believe that if they turn up to work and follow a process perfectly then good things will happen. Unfortunately, the world doesn’t work this way. Process is just a tool, one of many at your disposal.
What’s the impact?: Entire teams can hide behind processes, or worse, be measured by their ability to follow a process. This will result in waste and inefficiency, as well as a stifling of innovation and most commonly a lack of accountability. If your teams are hiding behind processes or too bound by them, you will be cumbersome in your growth – if you grow at all.
How to avoid this: Engender a culture of relentless pursuit of value and use value delivered as the most important metric. This is best served by having a cultural framework to operate within that is backed up and supported by process.
8. Lacking Hustle
What’s the issue?: This is a very intangible issue but teams that lack hustle will not find success. Good product people can drag a product into growth and break down numerous barriers to get there.
What’s the impact?: A lack of hustle results in slow growth, missed opportunity and most of the issues outlined above in this newsletter.
How to avoid this: Solid recruitment strategies to get the right people on board. At Skull Mountain for example, we look for people with huge enthusiasm, integrity and who have either run a business or materially changed one. People like this usually know how to hustle for success! Alongside this, diversity is hugely critical. You want a broad range of people who can answer problems with a variety of solutions. If you don’t have diversity, you will have a team that only have one answer to each problem and as a result you will solve less problems. Finally having the right culture and a solid success framework to support this is key.
If these eight reasons that product functions fail resonate with the tone of your business then we hope this article has been able to shine light on where the issue may lie and how to resolve this. If you would like to discuss your business further, please let me know and we will put you in touch with our trusted partners at Skull Mountain.
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