More 2 Marketing

Susan
More to marketing. Welcome to more to marketing, a podcast on marketing, product and everything in between. I’m your host, Susan, and today we’re talking strategic product thinking and product management. I am very excited to introduce and esteemed guests, Rich. Rich coaches, executives, product management teams and also revenue software organisations he has consulted over 200 tech companies and has literally written the book on the Art of Product Management. So make sure you get. Your hands on that as well, guys. He also is a frequent speaker and lecturer at UC Berkeley, and I’d love to welcome you here to tell us a bit more about yourself.
Rich
Great. Thanks. And actually the the Berkeley information is a little old. I’ve since moved to Portland, OR about an hour’s flight north of San Francisco. But I do have a regular teaching gig in Dublin, Ireland, which is always fun. And you know, I end up guesting mostly by zoom these days with a lot.
Rich
Of you know, product camps and tanks and and such. Portland’s not that so big a place. So. So here we are.
Susan
But you’ve definitely done a lot in the space of bringing communities together and teaching. So tell us a bit more about your career and.
Rich
Sure. Uh. So useful to say I I have 40 years of tech in, in behind me there. So the first.
Susan
How you’ve started?
Rich
15 or 18 years that I was working for companies, you might have heard of tandem computers, Sybase, HP, a couple of startups. I hung out my shingle in 2001. Not coincidentally, just after 911 and all the economy fell apart. So I need to make a living.
Rich
These days what I do is I coach, as you said. I coach heads a product, so that’s CPO’s or PVP’s or whatever it is at the company. I usually coach the most senior product person. Act primarily companies that build software as their product, as opposed to organisations that have a software team that’s a cost centre somewhere because they’re in a different. Business.
Susan
And that must make a difference as well about how you train them, because you’re get you’re getting right in there to all the nitty gritty and also teach them so many different avenues on how to develop.
Rich
Alright so. Absolutely. Right. Good. And and that’s that’s I think the essence of it because if you, if you’re building software for money, if the thing that your company does is licence or sell software and it has to be good enough there, it beats the competition right then you you really worry about product strategy and pricing and packaging and. Getting alignment with the sales and marketing organisations and such, because if you build crappy software, your company goes out of business and you all lose. Your jobs and. If you build. Really good software and you’re not clear with sales and marketing and the outbound side. Why it’s useful? Who it’s for, what the benefits are, how to describe value. Then you also run out of revenue and you close your doors and you all go home and try again. So for me, that’s the essence of product management. If you look at it groups within banks or government agencies or airlines or such, they’re cost centres. And that’s really important because the goal. Of the CFO. Of that organisation is to reduce the amount we spend on tech, not to build great tech, and so almost everybody in an IT organisation turns out to be in much more of a ticket taking or order taking mode because they’re not making decisions. They’re not driving company strategy. Uh, and the rest of the company sees them as an expense rather than an asset and a benefit, so pretty hard to, you know, be strategic if you’re in an organisation that the rest of the company doesn’t really think is.
Susan
Yeah, and I can appreciate that. That’s very hard to us to also change some businesses thinking around too if they’re not going to actually go, actually we need to invest here for not just ourselves and our business, but for our customers too.
Rich
Right. I I think that’s right. And and often we end up in this sort of middle space where the executive team really believes that tech is import. But not enough to charge for and not enough to pay for and. And that leaves us in this place where we have a lot of magical thinking about how easy it is to build tech, and usually that rolls into what we think of as the project model, which is we’re going to build this thing for the business. Big air quotes here. Which by definition, if you’re not in the business, I’m not sure what you’re doing right, but if if we if we’re going to build this new order entry system for the business or this new, you know reservation system for the business or this new whatever, there’s this idea that we’re done. And then we move all of the designers and developers and product managers onto a new thing. And honestly, that’s the worst decision you can ever make about tech because techs never finished. It’s never done. It’s never perfect. Everyone in the company has an infinitely long list of things they’d like to do to improve it. When you move the team off. You lose all the intellectual history and there’s actually no one left to fix it when it. Breaks. So inevitably, in IT, organisations where they have too many projects and too many, you know goals and too many. Demands they peanut butter over this small number of people they have onto too many projects or products and they all go badly.
Susan
I have to 100% agree with your comment about the project ends. They assume there’s nothing more. They forget they signed on. There might have been a giant big scope of work. It gets shorter and shorter and shorter things turn into an MVP stage 2-3 and then they go, oh, we don’t need. Stage two, we don’t.
Rich
Need stage 3, but you do. In fact, I coach my folks. Never ever, ever. Ever to use the acronym MVP. He. Because almost every single person in the company has a different idea of what that means, and the folks on the sales and marketing side believe what it means is since the P stands for product, something we can sell for money, that’s really market worthy and is finished and is. Great. So even though we on the tech side keep saying in every single meeting. It’s an MVP and what we mean by that is we are only doing a part of it and we’ve taken all the good features out. We’re trying to get it, you know, early in market to get some test. Thing that’s almost impossible for sales and marketing organisations to hear, because when we say MVP, they see the P as product and that means we’re going to attach price to it and we’re going to spin up all these campaigns and we’re going to sell a bunch of it. And on the engineering side, on the product side, we’re deeply frustrated because.
Rich
We did that, we trimmed features, we rushed things. We did a partial UI. We know it’s not done. Then.
Susan
We know there’s more to do to make it better and enhancer.
Rich
We know this. Well, even more than that. It may not be saleable or workable, right? So. So if you go back to Eric Reese’s book on the lean startup where he popularised the phrase MVP, his definition is the least amount of work we can do to learn something about our market, not to sell, not to collect money.
Rich
Not to, you know, solve customers problems. It’s a learning exercise. So whenever we say MVP, I assume about half of the folks in the room.
Susan
Testing.
Rich
Won’t understand what we’re doing or will intentionally go to a different place, so I use phrases like non working prototype and non revenue early adopter software and. Mock up or sketch? Yep, OK. If what we really mean is a mock up or a non working prototype, we should use those words.
Rich
Because it’s pretty. To it’s pretty hard to attach revenue goals onto a non working prototype, especially if you tell your customers that’s what it is, right?
Susan
Exactly.
Rich
So so again the the project mentality says, well, first early on we’re going to write this really long set of specs and we’re going to have. This. Big idea and then we’re going to cut it back and cut it back and cut it back and cut it back to make some deadline. And what we end up with isn’t really market quality isn’t really ready to sell, doesn’t completely work, has. Warts and problems all over it. And then we take all those folks. And we move them on to the. Next thing to do a half job. Right on 1/3 of the specs on 1/4 of the budget. And we’re surprised, shocked, actually. We’re shocked that we have this. We have this collection of broken toys, right, none of which really meets customer need, none of which has a staff on it, none of which has anybody who’s going to maintain and fix it.
Susan
Disappointed. Didn’t. Yeah.
Rich
Or add the next 20 features or follow the competition or earn money because we. We’ve we’ve fooled ourselves. Into the idea that calling it an MVP somehow gets it done three times as fast at a half the cost, and there’s, and there’s no downside to that. And and every so every time I work with a, you know, a senior product person who ever says those initials, yeah, we we stopped for a sidebar.
Susan
Makes complete sense here. Everyone on the same page so that you’re set up for success, and that’s where you. Ultimately want is success.
Rich
That’s right. And and using words that are the words they. Mean like early, early revenue access for selected customers. I know what that means and that’s different from engineering thought experiment to see if the software scales.
Rich
And if that’s what you mean, then that’s what you should say.
Susan
Exactly. And it also means that expectations are set on both sides.
Rich
That’s right. And and I find. Then that by product managers and I need to keep repeating this at every meeting. We say it’s not done, it’s not revenue, it’s not complete. We’ve trimmed all the good stuff and at the end of every meeting that’s forgotten because some customer calls up and wants to give us money for it, right. And sales people are paid. Shockingly, sales people are paid to take money from customers for things customers say they want not to get. All these fussy bits about what product did or didn’t say in the meeting on Tuesday that I wasn’t paying.
Susan
Exactly. They’re probably doing something else on their laptop at the time, looking how. Much to make out of this.
Rich
That’s right. They’re busy checking their quotas to see if you know, month to date we’re ahead or not.
Susan
No, I think that’s that’s brilliant insight as well, particularly when you’re starting a project or if you see that a pivot is needed to be able to set it all up in the right framework. So everyone knows where every stage actually means and it has a meaningful heading to. It.
Rich
Yeah, I I would also caution though that that and and I love my sales and marketing counterparts, they are not interested in how we build product.
Rich
So if you’ve ever listened to some product manager, spend an hour lecturing their marketing and sales counterparts. On Scrum or XP or you know backlogs or one weeks, one week, you know, sprints where it’s fundamentally not. It’s fascinating to us because we live it every day and we care about it. It’s of 0 interest to the folks who are trying to move product. And so we we have this idea that we’re going to educate them. And instead what we really want to do is cut to the chase and have as few words as possible.
Susan
I think that that’s one of the reasons why in my career I was very much a marketing person and then I took on a brand to own and actually build and deliver and create and be creative and build product and working with the product people cause I turned into a product person. There too, I.
Rich
That must have been. Painful.
Susan
I wanted to. I wanted to learn their. Language. And so I went off, and I did Greenbelt lean 6:00 so that I could talk more with them, so that I was because that was what they were using and agile. So I learnt both of those so I could work with them better and get things done in the same language. And it was quicker to be able to do that. But not everyone does does that takes the time.
Rich
Sure. Well, even more than that. So so notice that’s the language of engineering.
Rich
It’s not the language of product.
Susan
Yeah, they they were using a lot of the scrum because of the agile cameras over, yeah.
Rich
I understand I’m. I’m a big agile fan, but for me agile solves the question of how do we efficiently build software and it answers none of the because we’re going to come back to to this product strategy in a moment, right? It doesn’t answer any of the interesting product.
Rich
Questions. Who is it for? Why are they going to pay us money? Where is the competition? Right? What’s what’s the economic value? How? What do we say about this that shows benefits? Right? The agile engineering or development model answers the question that assumes all of the product strategies been done and all of the prioritizations been done and all of the market analysis have been done and all of the competitive been done and it answers the question of what should we next build.
Susan
True, yes.
Rich
And do we have some decent stories or specs for it? Right. It story points aren’t about customer value. They’re about measuring engineering, right? So when we when we confuse agile with product management. We end up talking about the engineering processes of building stuff, but we miss everything in my view that’s interesting about product.
Susan
I think that’s a great a great piece to share with everyone as well because a lot of the time. It does get mixed up.
Rich
Of course it does.
Susan
And this might be a really good segue into I’m a huge, huge fan of chocolate cake. As you know, we’ve talked about chocolate cake quite a bit. I’m making one for Christmas Day. I’m very excited. Can we say yummy?
Rich
Yes, yes.
Susan
But what? How do you apply chocolate cake when it comes to product management? So help us understand more.
Rich
Ah so. Got it. And and and so the back story on this because you and I have talked about before, I did a talk in Cambridge in the UK early this year, I think it was March at a great conference called the Business Software Conference and it’s much more CEO’s than it is product folks. And so the question is how do we communicate with CEO’s who are really not? Interested in the details of how we’re planning and doing and building. That’s not their problem, right? How do we describe the the the problem of interrupts to the engineering team and how we don’t seem to be getting much done. And so I had to back off and say, well, what’s an analogy that everyone in the room understands? And it goes like this. Imagine that you make this chocolate cake early in the morning. You put it on your kitchen counter. Let’s assume you have some teens at home. Some teenagers, right? What do we know at the end of the day?
Susan
There’ll be no cake left. Yeah, maybe a crumb.
Rich
The cake is gone, right? Maybe a crumb. And how did that cake disappear?
Susan
Piece by piece during the day when. He walked past.
Rich
That’s right, even smaller. So your your teenagers are going to walk through, grab a fork and not even take a slice. They’re just going. To even off an edge. Right, right. And and and everybody knows this. And so we had this long. You know, I did this whole talk about chocolate cake and everybody sees this, but they don’t know where I’m going until I asked them to raise their hand, say, raise your hand if you’re a CEO and most of the hands.
Susan
Very true.
Rich
Up and then keep your hand in the air. If in the last three weeks you walked down to your engineering team and said anything like the following. Hey, I need this one little tiny thing. It’s not going to be that hard. Customer tells me it’s easy. I bet it’s only 10 lines of code. Can’t we fit it into this week’s Sprint? Right. All the hands stay up. OK. And the and the takeaway for the CEOs is? Every time you steal a few crumbs for the thing that seems small, your kick gets smaller. At the end of the quarter, we discover that we worked really, really hard all quarter. Everybody worked weekends all quarter, but we didn’t get any of the important things done that at the beginning of the quarter, we promised ourselves and that we. We planned to sell and make money on because every single day there were just a couple or 6 or 45 interrupts from every single executive and every single stakeholder for something that was small. And at the end of every day we realised we worked hard, but we didn’t make any progress on the things that we promised ourselves and put on the road map. And so that’s an attempt to highlight for the CEO and the executive team something different from engineers are lazy and don’t work hard, which I’ve never seen, right. I mean, I hear it all the time, but I’ve never actually seen that team. Right up to there’s a behavioural problem in the executive suite that’s causing us to never stay focused for more than five hours on the thing we’ve said was most important for this year.
Rich
Right. And and so I spend a lot of my time trying to. Reframe and communicate to the folks who need to know but don’t want to hear about the technical details about how planning works and how strategy works and how chocolate cake works so that we can get to the place where they’re they’re going to get an innate natural sense that every time we interrupt the engineering team. Or something small, it turns out not to be small. And the team is never idle. So every time we do that, we’re pushing back by another few days. The thing that we all agreed at the beginning of this staff meeting or the quarter was the most important thing that’s going to generate revenue at the end of the quarter, everybody gets punished.
Susan
Exactly. And then you’re not hitting your quotas or anything like that as well? No, and that that seems like an ongoing cycle in many places as well, that’s. Very hard to break.
Rich
Oh yeah, it’s very hard to break and and it’s a it’s not an intellectual problem. It’s a behavioural problem.
Rich
Right, so this is about whether the executive team can be aware enough of what they’re doing. And the impact of what they’re doing to try to rein themselves in. If you’re a junior product manager at the bottom of the org chart, you don’t have enough political juice to tell the CEO to go # sand and leave you alone right now. If you’re the absolute head of product, if you are on the in the executive team in the. Suite. This is your daily battle.
Rich
And you know, usually there’s some phrase like, that’s a great idea. I love that idea. Which of the three major commitments that we’ve made this quarter and announced to the world, would you like to postpone for six weeks so we can work on your new idea? Because I’m stuck.
Susan
And and it it. Is it really is you, you. See it all the time I’ve seen it all the time. As. Well, where you’ve had the IT department creating something then told Ohh no, there’s a a bug here. We have to fix from the old product as well and it’s like, OK, well, what do we do? Do we continue on this new one or do we fix the old one?
Rich
Right. And and.
Susan
We’ve only got so many hours and. Hands.
Rich
That’s right. And if we go back to the fact that in a project world, we keep abandoning things, right, the the real answer if if you’re really in the software business and you take it seriously, everything you’ve ever built has to have maintenance and and ongoing support attached to it. So every time we build a new product, we either. Have to grow the team. Or we have to absolutely end of life. The thing that it replaces and never, ever, ever take a support call or contract for it. Again, right that that. This is an ongoing commitment. It’s, you know, if if we think about having children here, right, I haven’t personally been through the birthing process. My wife did it, and I was there, and it was very painful. And I can’t imagine anybody doing it a second time. But the day you bring your three day old or seven day old infant home, your job’s not done right. You’ve got 18 years worth of maintenance and improvements to do here before you send them off to uni, right? If you bring in more kids, you’re going to have more work to do. Again, notice what I did was I took us out of the tech realm.
Rich
And into a realm that every executive probably understands.
Susan
Exactly.
Rich
Right. All right. And the idea. That we’re done with. Until it breaks, is is a fundamental misunderstanding of how tech is built and maintained. And so you know if if we’re going to do a new thing, we should budget basically forever to build it, maintain it and extend it. Or not start or not start.
Susan
And that is an option as well.
Rich
I think that’s fine and and so. The the the. Other thing that I endlessly coach my chief product folks on my VPS product is we have to speak to the execs in the language of money. Not tech. So when when somebody says, oh, build this thing for me, right? I want to come back and say, well, our best guess is that’s going to take a half a team. Forever. OK, so that’s depending on your currency. Let’s say that’s a 1,000,000 Australian a year.
Rich
Every year until the end of time or we end of life. This so tell me a story why our investors are going to get a 5X or 8X revenue bump out of this because it’s going to cost us a million a year. Right. And everyone in the room now knows what we’re talking about because we attached a currency symbol to it.
Susan
One that everyone understands as well.
Rich
That everyone understands and they could say, well, we don’t really think that takes a 1/2 a team. We think it takes 1/3 of a team. We can have that argument, right? But the idea that we’re going to finish it and move on.
Yeah. Awesome.
Rich
Fundamentally wrong. So. So how do we express ourselves in language that the rest of the company can understand and care about? Because the finance folks know what it means to add another million in development costs every year, because we’re never going to finish. And they know what ratios we’ve got to make here or what improvement has to be. And now we have them on our side because we’re being asked to spend a million a year for something that’s going to save the company 100,000 a year. And you may not know this, but 100,000 is less than 1,000,000.
Susan
I know. Imagine if they didn’t understand that place.
Right.
Rich
So so everyone in the everyone in the room understands what it means when you say it’s going to cost us a million a year to save a half a million, right. And then the hands go up and say well.
Susan
It’s your problem.
Rich
Let’s not do that.
Right vote.
Susan
Exactly. Let’s go back and see what we’re going to do, where we.
Rich
That’s right, that’s right. But when we speak in the language of tech and we talk about backlogs and, you know, code check-ins, it doesn’t hit anybody viscerally. It doesn’t. It doesn’t make them sit up and notice.
Susan
Need to go. And I I feel there’s a lot of companies that do this, even looking back at my career. Yeah, where we’ve built, say a, A, a, a mobile phone plan and we we need to now go back and add more data or something to it because it’s now out of market. So we need to have some development work. Those people are now working on the next product. They’re not working on adding something to the existing one.
Rich
Right. Right.
Susan
So it’s about dividing time and trying to, as you said, you enter those arguments of the fight.
Rich
That’s right. And by the way, I’m going to guess that when we did that last packaging or pricing. Then we did it as quickly as possible because we knew we had to move on to the next thing and we didn’t set it up so that it was going to be easy to change the amount of data that we ship, right?
Susan
Well, I did change things there so I can proudly say that I did bring in some quicker, faster ways to do it in the future. We could do things in two days instead.
Rich
Good for you.
Susan
Of two weeks.
Rich
Perfect. Good.
Susan
But again, not everyone thinks like that. How to do it faster later? How can we do faster turnarounds where we need to? That doesn’t break people that we can build it for success.
Rich
That’s right. And so, so, you know, when we think about product strategy, we want to play out the next 20 rounds of the. Say OK, it’s it’s. 100% likely that we’re going to need to change all of the parameters of this plan.
Susan
Yeah.
Rich
Right. So we can either pay that next year or we can pay it this year, but. But we think about it right and and and so if you’re just taking a ticket from somebody on the business side who says spin up a plan that has 8.4 megabytes per minute or 16 gig per month or whatever it is, right?
Susan
Exactly.
Rich
And we hand code that because we’re not thinking about the business, we’re not thinking about the future. We’re trying to get it done in, in as short as possible. So we can move on. We end up with this huge stack of. Poorly maintained, poorly designed, hard to fix stuff, and then everyone’s kind of confused as to why it’s hard to change things.
Susan
It is. It’s 100% about that planning stage.
Susan
Which for me when I came in, I was looking. I heard about how the process worked. I understood it. I listened, and then I went OK what happens in these situations? So I sat down with the team and we identified the main situations that would come up, just like you suggested. And then what could we build? What tools do you need?
Susan
Built so when we’re building this new plan, let’s add that in as part of the phasing.
Rich
Right. That’s right. And if you do it in as part of the phasing, it’s usually way, way cheaper and faster.
Susan
Exactly, exactly. And that’s what I could actually show for management to go. Ohh yeah, this makes complete sense. Tick, we’ve got a 50% savings here if we do it now. So I was able to develop that with the team to make sure that the future was covered.
Rich
And by the way, that might take two extra weeks.
Susan
But the rewards?
Rich
But it’s going to save us. It’s going to save us six months next year.
Susan
And money, if we go back to that currency.
Rich
And and money. That’s right. So. So again, we we have to express the choices that we’re making in language that the go to market side of the company understands and cares about. Yeah. Do you know Doctor Sheldon Cooper from Big Bang Theory? OK.
Susan
100% one of the biggest TV shows that was in. Australia for quite a while too.
Rich
That’s it. When, when? When, when we as product folks stand up and spend an hour lecturing about the in inward workings of how we’re making the food in the kitchen. Right. Everyone in the room sees us as Sheldon, right. They tune us out. They’re reading their email. They’re moving on. Right.
Susan
Yes.
Rich
We have just like we have to shape our products and our messages for our end audience. We have to shape our communications and language for our internal audience so that they care.
Susan
I think that’s probably one of the other challenges that’s faced is about. When you have a focus on a single account, timeline or quarter targets.
Rich
Yes.
Susan
It’s hard to align everybody there. What insights would you provide for for those instances where you have to maybe break through or elaborate more when you’re facing those challenges?
Rich
Yeah. I I think if if we peel that back to ask why that happens first, right? So before we fix it, let’s understand it and I spend most of my time at enterprise software companies, right. And as this thing from consumer software companies and the the thing that makes them enterprise companies is that they’re they’re going to close 11 deals this quarter. For 1/2 a million to 5 million apiece.
Rich
And the Board of Directors knows the names of everyone of those deals, and and because they’re polite board members, they only call the CEO once a day, each to ask how those 11 deals are going right only once a day each.
Susan
Only once.
Rich
Right, so so. Everyone on the sales organisation, then by implication marking. And, you know, wherever else goes with that. They know the names and the amounts on these deals for months, and the idea that some product manager is going to stand up and say that’s a feature we aren’t going to deliver because I don’t feel like it, right, it’s fundamentally wrong, right. If if we, you know, we have four and a half million lined up with JP Morgan Chase or you know and Z. Banker, whoever it is, and we’re going to have to fire people if we don’t close that deal, there’s pretty intense pressure to agree to whatever they’ve asked for, whether it makes any sense or. Not right. And so as if we think like product execs and we’re in the room where it happens. Thank you, Hamilton. We we have to get ahead of this right. And there have to be some ground rules. And generally I start with the economics of this so.
Susan
We’re getting back to the dollars, I understand.
Rich
Dollars they understand. So, for instance, rather than saying that’s a stupid feature, we can solve it some other way. Don’t close the deal. Right. Right. I would come back and say.
Rich
Well, the two things that are biggest on a road map are each forecast to bring in 20 to 50 million next year because they’re going to solve the needs of 1000 of our customers. And here’s twenty of their names. And here’s all the people we’ve promised them to, right. Remember, there’s no excess teams lying around. Waiting for work. OK, so we can do that thing for this one customer. Here’s what we’re going to sacrifice, right? We name the individual project, programme, release product, whatever it is. Right. And we attached the amount that we all agreed that was going to be worth it – .
Right. Language of our audience here and it and it’ll turn out again half a million smaller than 20 million if it really is a major piece of work that we have to finish to upgrade all of our customers and get them onto the next version and reduce our churn, right. And the number is bigger than this one deal having called that out. I can sit back a little bit and let the sales team sort. Because the VP of Sales or the chief revenue officers paid on total revenue for the company not not just this one deal, right?
Rich
And therefore has an incentive to maximise revenue for the company, not just this one deal. The other thing that’s true of enterprise sales teams, they generally only have a couple of accounts. And so when they say everyone in the. World needs this. What they’re really saying is of the two accounts I call on, both of them asked for this right? And and notice that’s different from. We actually went out in the market and we determined that 40% of all of our customers are going to walk away from our product if we don’t ship this thing. Hmm.
Susan
Exactly. Very different language and enterprise.
Rich
Very different language and so and sales people are smart. I love them and I’m not at all offended that they make twice what I make, you know, and and and what are their, what are the key skills of an enterprise salesperson, right. They’re persuasive. They’re persistent and they’re really good at positioning whatever they have to be. The customer’s needs, right? So when there’s a deal that needs a thing and they turn all those tools right back into the company and they’re persistent and they’re persuasive. And by the way, the definition of a millisecond is the time. Between when a product manager says you can’t have something and when you escalate it to the CEO. Right. So.
Susan
Maybe Andrew.
Rich
It is sales sales people are doing the thing that we are paying and rewarding them to do that we’re selecting for and then on the product side, we seem surprised. That that they’re doing exactly what we’ve paid and hired them to do, but they’re facing inward instead of outward, right. It’s not that they don’t like us, it’s that we’re not important. We’re not as important as hitting quota for the quarter and getting a bonus because that’s why they’re salespeople.
Susan
And this touches on the role of leadership. So sales is definitely one of the the leaders within an organisation. With what’s your view on leadership when it comes to project management and being involved? We talked a bit about your training of the CEO to think more like the chocolate cake mentality, but what? What is the role of leadership when we’re thinking about mitigating situations and how to potentially avoid some of these situations even coming up?
Rich
Sure. I think certainly at software companies proper and maybe it’s some other. Companies, your most senior product person has to be on the same senior staff with all the other C level folks, right? Not reporting up to the VP of Engineering, not stuffed somewhere 5 levels down in IT, right? I I generally am not excited when they’re reporting to marketing, but that happens sometimes, right and so? If we think of this, I think of this as a coalition build. Problem. OK, if if the head of product can figure out who else on the executive committee cares about the long term and the general economic health of the company and goes offline and preps them and convinces them and sells them on the need to hold the line against specials for all of our customers. Right then, it’s not just one person crying and screaming and banging their shoe on the table in the exec meeting. The finance folks probably get it at some point. If you show them the math. Engineering’s with you. Usually marketing can go either way, but if marketing cares about volume. Right. If we need to close 500 customers next quarter and we’re building something for just one of them, then marketing is going to fail. Right. So so I look around that and say who else is on my side of this argument in general? And can we do a bunch of prep work so that when this next deal comes up? And you’ve heard the example from me, right? But it’s always just got off the phone with a big customer who told us if we could deliver teleportation by Friday, they would write us a check for 2,000,000, right? It’s whatever you choose. Right? But but the point is that that we have to have sort of preconditioned.
Susan
Only two million. I reckon it be home.
Rich
Half of the executive team to know what that means when they hear it. Mm-hmm. And to be on the same side of the argument, if, if, if I’m the if, if the product person’s the only one taking this up. Well, you’re going to have a new head of. Product in six more weeks.
Susan
I completely agree with you, even from some of my own examples of the past, it’s better to prep your main people that are going to be your most vocal so that they can at least you either know their feelings before they walk in so you can prepare for it and maybe have that discussion with them if it might not be aligned, get alignment and go in there so you know.
Rich
Yes.
Susan
You’re going to walk away with. Probably a. Less or the positive compared to going back to scratch or getting a new job in. Six weeks.
Rich
Sure. One one other instance here. When we’re talking about money, that’s really important to me. So if you’re in a software company that’s got outside investors, venture capital, it turns out that the venture capitalist value straight ahead, licence revenue at six to 15X and services. Revenue at 1/2 X. Because if if we’re just selling licences, we can sell one more licence with no more work done because it’s the same bits, right? It’s almost 100% margin.
Rich
If we have to have. Folks configuring and building special connectors and onboarding and training and going on site. And right all of those things get in the way of growing a company quickly because first of all, we really don’t make money on it, even though we think we do and we can’t sell one more enterprise copy of our stuff unless we hire 27 more people on the service side and. So I make the argument to the CEO that says you want to be collecting less money for services and have fewer people doing services, and we want to engineer away as much of that as we can so that you, the CEO, can retire to Fiji 6 years earlier because the investors are going to take you on an IPO. Because revenue software is worth. 12 to 30 times but the same amount from from a a service contract is right and and it’s it’s a non obvious point but when we put it into money terms.
Susan
This Yep makes complete sense.
Rich
Most CEO’s get.
Susan
Definitely, particularly if you’re selling, they’re retiring 6 years earlier. They’re already booking their ticket.
Rich
Whatever. Yes, right. Just tell me when. When I get to go.
Susan
When we’re thinking about Rd maps, what do you think when executing when executing strategic project thinking? Is there types of Rd maps that you prefer to use or utilise yourself? Or is there a better way that we can divide and conquer between all the different? I suppose you call them sneeze to make sure that they’re involved.
Rich
Yeah. Let me let me frame that with a couple of observations. I never expect all of this me as an execs in a company to ever agree on priorities, OK, marketing wants us to do more things that marketing needs appropriately, right? Support wants us to do more things that support needs. Sales wants us to do. More things that are deal based finance wants us to change all the systems. Like when we add those up, that’s usually 20X to 50X our engineering capacity. OK, so. So the idea that we as product folks are going to wait around for the rest of the executive team to find harmony and alignment, right? I’ve with one or two exceptions. I’ve never seen it happen. OK. So this idea that we’re going to.
Rich
Just wait. Right. I I I think that’s a mistake, right? So so the couple of things. First of all, I I’m I’m a strong believer in OKR’s or swim lanes or themes, right? And so let’s imagine a road map that has four swim lanes and three of them are the big things we’re doing that that the markets and the customers and and therefore sales.
Rich
I can care about and one of them is and one of them is. All of the maintenance and support and expansion and architecture and scalability and security that we have to do to stay in.
Rich
Business, even though nobody’s asking for it right now, OK. And then when a new thing comes in, instead of saying, do I like it or not, I first ask, well, does this fit into one of the three strategic swim lanes that we’ve all agreed are the things that are most important this year?
Rich
Right. And if not? Can we discard it? Right. And then if it fits into one of those swim lanes, we get to ask the better question, which is do we think this item is more effective than the ones in the near term part of the road map because we can shuffle those if we want, right? But only if it goes into the right swim lane and we think it’s a. A better choice? Right. And that helps the executive team not get lost in all the boxes. Because honestly, you look at the road map and Scott boxes and. Nobody cares, right?
Susan
So many boxes, so many colours.
Rich
So many so many coaches. And by the way, they’re almost always they always have code names which don’t mean anything to anyone in the company except the folks on the team, right? So if you have a swim lane that’s about bringing your product to Europe. Then you want box that say French language, Spanish language GDPR, right? Not project Thor and Project Avenger.
Rich
Right. Because we want them to communicate what that is and then those should fit into some swim lane that says, oh, getting to Europe. That’s projected to be 20 to 40 million next year, OK. So if there’s something else that Europe needs that’s more important than Italian, right? Let’s figure out what it is and.
Susan
Size it up.
Rich
We. Size it up and we may have to move the Italian work back a year. OK. But we know why we’re doing it. Because it’s in the swim lane that says. Bring product to Europe that we can actually sell and make money on. Mm-hmm. Right. The other thing and and again I’m thinking enterprise salespeople. When I show my road map to enterprise sales teams, there’s immediately one of two reactions. There’s only two one is OK. I see the thing that I need on there because you promised it to me and I can check my brain out because there’s nothing else interesting. Or there’s a thing that my deal needs, and it’s not on the road map, right, which which is the usual case. Right, jump up and down. And and clearly there must be resources on the engineering side to do this because it’s important to me. Right. And if you say no, well, then let’s just escalate it to the CEO.
Susan
Jump up and down.
Rich
Who knows how big this? Deal. Is right. So in general, when I present a road map internally, I expect half of the folks to leave early and and start the escalations because we can’t possibly have all the things they need on the road map.
Susan
Very true.
Rich
I get better responses when I show it to customers because they understand what we’re doing and and they really want the. Product as a whole to be better.
Susan
So with Rd maps 100% here we’re talking about language being very easy to understand, so no code names in here. Yep, various succinct. Swim lanes includes something on maintenance as well, so everyone knows that’s ongoing. It doesn’t. Just drop off.
Rich
And it’s and it’s big. It’s as big as everything else combined.
Susan
Yep. What? What other tips or other tools do you use when you’re talking to C-Suite to get them to understand what’s going on and how?
Rich
Yeah, I really like the now next later framework. I think Jenna Basta really brought that out in, you know, early on in her product career. But I like to attach rough time frames. OK, so this quarter. And by the way. We should be about 90%. Correct on what we’re going to ship this quarter because it’s already too low to right the next one or two quarters and and my estimation is that’s about 60% right, partly because the world is going to change partly because everything is going to slip partly because deals are going.
Rich
To change you know. We’re not actually committing anything two quarters away. We’re hypothesising we’re suggesting, but the language I use with the executive team over and over again, many times in the same meeting is this is our current list of what we plan to do. We absolutely reserve the right to move all of these around or replace them as needed.
Rich
Because the world isn’t going to stand still, right? And then the later I usually like to put something like 1 1/2 to four years. Because if it’s a year and a half away, honestly we can’t sell it. We can’t really market it and everybody. Leaves it alone.
Susan
Yeah, that makes complete sense.
Rich
Because when when I use the word later without any time frame. Now is this week. Next is the next two weeks and later is anytime this quarter.
Susan
Again, coming back to one of your first points, everyone has a different understanding of those terms.
Rich
That’s right. That’s right. And and it’s and it’s that’s right and it’s OK to be unhappy with what’s on the.
Susan
Lay it out, people know.
Rich
Road map by the.
Rich
Way everyone’s always unhappy with on the road map because it’s never enough, OK? And it’s never soon enough.
Susan
Well, it’s a road map. It’s. Yeah, exactly. It’s a road map. So they. Can’t have it today.
Rich
That’s right. It’s never soon enough. It’s never big enough, right? There’s never enough things on there. So I never expect anyone to be thrilled with my road map. But I need them to understand the distinctions between they had a dream in the shower this morning, and we’re building it.
Susan
Ohh, this comes to my next question which I I was really excited to ask you. What advice would you give to someone embarking and doing a workshop on strategy pro thinking for the next upcoming. I did have in here in the question 12 months but maybe we make that a bit of a shorter time period.
Rich
That’s OK, whatever you like. A couple of pieces of ice. First of all, anything in the backlog that’s below about position 15, we’re never going to do. OK. Ever.
Susan
As long as we’ve actually listed the prioritised the backlog properly.
Rich
Does doesn’t right things get added to the backlog faster than we take them off the backlog. That’s true everywhere. OK, so anything in position 30, it’s never going to see the light of day unless something dramatically changes. OK. So the idea that we’re going to size everything in the backlog. Complete waste of time, right? And so sometimes I like to plan this in a sort of capacity model instead. OK, we’ve got six teams.
Rich
This team works on admin tools for our product. Half of all their energy is keeping the things we already built working OK. It’s a team of seven, so we have three or four people worth of capacity for anything having to do with the admin part of. Our system, OK, so. Let’s let’s grab some posted notes if that’s how you do it. Right. But we’re only going to be able to do 4 things next year. OK? So let’s make a list of no more than 9. Right, let’s argue about which things make the list of nine or ten or eight right. Everything else is not going to happen next year, OK? And with a small enough number of pieces, you can actually have a smart strategic discussion about. Markets and competition and urgency. Right. Human brain can probably keep seven things in at the same time, right? And and two of them are going to be obvious and go right to the top and two of them are going to clearly not make the cut. So we’re going to argue about the middle 5, right. That’s strategic. I think trying to forecast all things till the end of time is a waste, right. Trying to forecast anything past one digit. Right. They want revenue. They want 4.25 million or 4.28 million. Nah, our guess is 3 to 5 million and and that that’s a guess, right, so. You you can’t over specify. You can’t be overly precise, right? And everything you can do to cut the problem down to the small number of choices, we will actually be able to make. Right. There’s always someone in finance who wants us to estimate everything in the backlog, have a nice day.
Susan
And what are we not going to do by doing that?
Rich
That’s right by. The way it’ll take the entire team all quarter to do that, so we’re going to build nothing this quarter. Sure. We’re just gonna estimate. OK, that’s, you know, and I would say it that way. I, again, I’ve been fired enough times. I’m not worried about it. I get really blunt and American on these things where I say that’s a complete waste of time. But if you want to pull everybody off of all the things that are on the road map, remember the road map to estimate?
Susan
And yeah.
Rich
Everything that’s not on the road map. We’ll do that. Please tell sales and marketing there’ll be nothing new to sell and nothing new to market and nothing new to say.
Susan
And the delays will be X and it will cost you Y.
Rich
Well, the delays are. Everyone next quarter, OK. So anything on the road map? We’re just going to erase the date at the top and we’re going to change it from Q4 to next year’s Q1.
Susan
M.
Rich
And any revenue that you planned and any campaigns you planned, push them off quarter, right? Ain’t happening.
Susan
I I agree with that one. That one is fostering for me as well. I’ve made sure that they get added into as an SLA, so that if we’re working with a client and they go, I want to know, I want the backlog done. OK, well, the SLA for each one of those items is X, which will delete everything. By by that times X.
Rich
I’m sorry SLA. Tell me what the SLA is.
Susan
Service level agreements. Yeah. So, so for me, in this instance, there’s five days. So everyone and then will take five days to estimate and then everything else gets.
Rich
I know what it stands for, but I. Don’t know what it is here. Blown out? Nope. Nope, I don’t let my teams do that. How many? How many? How many customers does your company have?
Susan
What do you do? Ohh this is an example from the. Past.
Rich
I understand. So if you have a company that has 500 customers and they each have just one request a week.
Susan
Hmm.
Rich
OK, which means your team is getting 500 requests a week. OK, and we’re going to promise to have all those sized in five days.
Rich
OK. So again.
Susan
Definitely didn’t have 500 customers, it was 1.
Rich
It does doesn’t matter. It doesn’t matter well, if it’s just one, then they own you and you do whatever they tell you to do. But again, here’s here’s my approach. I I have thing I call. Count the digits.
Susan
OK, without the dish.
Rich
OK, so it says with no more than three numbers that we’re going to multiply together. We’re going to try to figure out how many digits there. Are in the upside for your. You OK? Is it a $50,000 idea per year? Is it a $500,000 a year idea? Is it a $5,000,000 a year idea? OK, now we product folks should be able to do a. Guess the number of digits in less than 5 minutes. Mm-hmm. OK. And you know what? Most of them are going to be $50,000 ideas. And so we’re going to do none of. Those. Right. But but instead of saying I hate you, I hate your idea and your. Clothing is ugly, right? I’d rather say, you know, we could certainly reduce the tech support time on each call by a minute per call. When we do a rough multiply of that, what we pay our support people, how many calls we get, that’s probably going to save us between 10 and $50,000 a year. OK, I have some other things in the queue which are roughly the same size that are 100 times more valuable. Language of money, right. And rather than saying, we’re not going to do. It. Because, you know, I don’t like you. We get to say we’re going to take that. We’re not even going to put it on the backlog because it’s so much smaller on. An outcome basis. Than any of the other things we’re working on, we’re going to we’re. Not going to speck it. We’re just going to let it go. Yeah, right. And and. And I’m trying to coach my teams to take 80 to 90% of all the incoming requests. And put a stake through their heart in less than 10 minutes. OK, because otherwise if you do the math.
Susan
Miss so much of it.
Rich
If you do the math, if you say, well, we’re just going to spend 2 hours on each request. And we got 300 requests this year this week. OK. OK, so that’s 600 hours and we have 5 people on the team. OK, I guess we’re going to do nothing but that and work all nights and weekends. Right when when you aggregate it, when you look at the larger picture, what you have to do is ruthlessly throw away. 8090% of all the requests. So that you can focus on the ones that matter and that’s not a popular point of view because everyone on the other side believes their thing is the most important for the company or they wouldn’t have put the ticket in, right. But if you do the math, you can see that we can’t possibly serve more than 5% of all the requests.
Rich
And and if you’re not willing to stand up and say that, don’t be a a product leader. Don’t be a VP product.
Susan
Exactly. And it’s it’s definitely an interesting approach because. I’ve never come across that situation before. Most of the time my backlog has been very small that I haven’t had over 10 sitting there with the ones I’ve I’ve worked on. So this is very fascinating for me from what you’ve been working on in enterprise.
Rich
Right. And I might I might contrast that between internal IT and external product. OK, if if you have 1000 customers for your product, every one of them has some really good ideas and every one of them wants to make your product better and every one of them fills out the ticket that says here’s the suggestion for product and and the really the really passionate ones do it once a week.
Susan
And the scales.
Rich
Right. So as your company grows, that pipeline gets bigger and bigger and bigger, but your capacity never keeps up. Now if you’re in a sort of captive IT situation where somebody on the business side gets to set the priorities, you may not like them, but at least you know what they are right in in a, in a product setting. In general, we have lots of segments, lots of users, lots of different use cases, lots of geographies. And those folks don’t agree. And and again, we can’t wait for all of our customers to vote up the same thing. We have to think strategically and make a few really careful choices and bets.
Rich
And you know what the rest of them don’t get done.
Susan
Exactly. And some of them just don’t make sense. Like you said, that it’s not even worth putting. It on the list.
Rich
Right. You know, we know that when when folks put in tickets for things, they always tell us the solution, not the problem. They’re almost always not completely correct about the solution. Sometimes they’re way off. Right. If we just do what’s on the tickets that come from our customers, we might as well go home because we’re gonna end up with this horribly broken random product with 1000 features and no interfaces.
Susan
Completely, completely agree there. And that’s one of the hardest things I think working with some stakeholders is there’s just talk about what you’re trying to do, what, what, what’s the experience right now, where do you think there’s an opportunity? Then we’ll go off and look for some whoever it is.
Rich
Yeah. When when we use those words with stakeholders, they think we’re just dissing them and wasting.
Thanks for looking for seasons.
Rich
Time.
Susan
I I’ve had some success.
Rich
Good. That’s good. One other impolite thing I usually do here again, as as the most senior product person I can get away with stuff which is I usually keep a. List. Of the last 20 or 30 things we built and we delivered on time that the world didn’t want and no one bought and nobody cared. About.Right. And so when someone comes to me and says, you don’t understand. I’m an expert. I’m a subject matter. Whatever. I know what everybody needs. I pull them aside to a quiet room where nobody else is going to hear and say, oh, do you remember? This one you asked us for six weeks ago. And it. Quiet. And how about this one nine weeks ago and it gets quieter. And but they have to be the ones that we actually delivered.
Rich
Hmm.
Susan
And see no result.
Rich
But didn’t make and saw no result. No outcome in the market because what I’m really doing is I’m I’m quietly and and individually embarrassing them to the place where they’re going to maybe start to recognise that the things they’re asking for aren’t scrubbed.
Susan
Exactly. No, I love that approach and I love keeping that list because because then you are the subject expert and you’ve been working with them too. You’ve listened to them, but unfortunately, look at look what’s happened. Let’s build it in a different way now.
Rich
That’s right. We, we. That’s right. We we spent two years and $11 million building project Sisyphus and nobody bought it right.
Susan
For the name alone.
Rich
There you go, right.
Susan
Oh, we’re we’re almost out of time. I’m going to ask you my last two questions. These are the my 2 favourite ones. I love to ask people.
Rich
Sure.
Susan
So, but what excites? You most about product management, let’s catch you in this for 40 years.
Rich
For me. Yeah, I I think I there’s two things. One. Is. I love my end users. OK. And I couldn’t come to work every day if I couldn’t say that every single day, right? Everybody else is just in the way, right? I like my marketing folks. I like my sales people. I like my channel partners. I like my resellers. I guess I like the folks who sign purchase orders on the customer side, right. But the people whose hearts and minds I care about. Are the ones who are putting mouse and keyboard to my product because they’re the ones who have to get the value. They’re the ones who I have to save time in their day. Or maybe people. ‘S lives, right? So we have to focus on the end user. Not everybody in between in the food chain. Yeah, because because they’re just in the way, the other one for me is I’ve spent a lot of time mentoring product folks over the last 40 years, right. And for me, the biggest joy is when I hear from somebody, I haven’t heard from in a while who worked for me or worked with me or whatever, who drops me out saying, hey, that thing that you told me seven years ago. You know what? I put it into place today and it was a big win and thank you.
Susan
Ohh that is that is very rewarding.
Rich
I got one of those this morning and it it made my day. Right. So and and by the way, all of this comes right back. To parenting, right? It’s not my job to be on stage with the violin and play the wonderful music. It’s my job to. Be standing in. The very back of the standing room area with my heart beating out of my chest because my product is on stage and my product mentoring product managers are on stage. And they’re the heroes. So how do we get out of our own way so that we can deliver goodness to the people who matter?
Susan
I really do love that. That’s absolutely gorgeous. My last question for you, what brand any brand in the world best represents you and why? I ask everyone this one.
Rich
That’s a really hard. That’s a. That’s a really, really hard question.
Susan
It can. It can be more than one.
Rich
You know there there are very few products in the world I love. So so that’s really hard to do. My, the brand that I think represents us as a tribe better than all. Others. Is Theresa Torres’s continuous product discovery work because she’s smarter than anybody else on the planet? And that’s made a real difference to thousands of people, and it helps us build better stuff.
Susan
Oh, that’s beautiful. Thank you so much for your time. I really appreciate it. Is there any other final tips or anything that you want to share before I do the round up?
Rich
One last thing, my observation is that really, really smart folks going to product and do that for five or eight years and get really good and then they move on to something more rewarding and easier and better paying I on. The other hand. Have have almost. 40 years of product management so you can figure out whether I’m the smart kid in. The room or not?
Susan
Well, I think you’re a smart kid cause you’ve you’ve blinded my mind today. I’ve learned so much from you. I’ve really, really appreciate this. I’m sure everyone listening will do as well for me very the very beginning. MV. Hey really thinking that through even more and walking away and making sure that before you even use that term is it being used the right way and for the right purposes so that everyone understands what it’s actually mean. So using different terms instead change it to be this is going to be the testing or testing exercise or this is going to be the non working. Product or this is gonna? Be the early, whatever it might be, so that people are all on the same page. That agile is very different to product management. Don’t get them mixed up, which is a big learning for me. Make sure that you’re actually doing things where you’re looking at the behavioural problems within the organisation. How can you impact it in a better way? How to talk to C-Suite in that way that they understand dollars is a clear one. That’s very easy. So dollars and time, so that they know what the impacts are, if they’re going to be taking away little tiny bits of cake all the time and they know their future impact of where they’ll land with nothing at the end of that. Order teams time is only a certain amount, so making sure they’re dedicated to the right things, but a huge call out for me is maintenance is ongoing with the product. Don’t just leave and set and forget. Make sure that if a product a project finishes and it’s still got a product that’s live in market, it has maintenance. Port, but don’t just give it a little drip. Will grab. Make sure it’s actually got quality and quantity of people behind it to continuously look after it and then have other teams work on the new products coming through and make sure it’s treated just as big as a new product because it is continuous and it is going to be your lifeline for future money coming in too for your company. OK. Us are fantastic to be able to utilise when you’re going forward for Rd mapping swim lanes, theming it, making sure maintenance is in those they. As well, and that it’s in a language that everybody understands, so don’t use project names like Project Thor, say entering France or whatever it actually is. So everyone’s on that same page. A really great framework to use also. Is the now next later. But put time frames against it now might be this quarter or sorry might be the next month later might be the whole rest of the quarter. So that when you actually are looking at it. You can actually. Put what you think is actually going to happen in those times, so 90% can be done this or we think it might be. 60. But and make sure everyone’s aware of this. This is only a hypothesis. Things change, so we can’t 100% commit, but this is what we predict. But let’s come back to it when we get close. And the backlog? Forget it if you’re in double digits, blow it off. Delete it. It’s not worth it. Stick to your top 9 or 10, but make sure you’re all aligned on what they mean. And don’t listen to people when they say size everything. It’s a waste of time. Did I miss anything rich?
Rich
I think you got him. Thank you.
Susan
Brilliant. No thank you again so much. I loved having you on. You are a huge expert in this. So I love that you gave your time to. Me and my listeners.
Rich
It’s my pleasure.
Susan
Everyone else, don’t forget to listen to more to marketing for more fabulous podcasts with excellent guests like today. More to marketing.