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Promoting Leadership Principles in Product Management


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How do you reduce the customer churn rate?

Guest post by Ryan Harrison

SaaS (software as a service) sales teams often focus on bringing in new clients; however, they often miss the key fact that existing clients pay more dividends in the long run. The blog ForEntrepreneurs.com reports that 5-30 percent of a business’ revenue comes from the initial sale. Renewals and upsells account for the other 70-95 percent. Businesses that struggle with a high churn rate lose out on these compound dividends.

Churn rate measures the number of customers leaving a business over a specified period of time. For any business with a subscriber-based service model, churn rate can mean the difference between profit and bankruptcy. Continue reading


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Technology is not enough

Just because you port or transition your product (software, hardware, etc.) to a model that is new/up-and-coming/exciting/proven/<fill in the blank>/ you have no guarantee it will succeed; technology is not enough to make a mediocre idea succeed. You must understand the market. If your product or idea is not what potential customers are looking it does not matter what technology you use to roll it out. If the market you are seeking to service has no need for what you are rolling out, the technology irrelevant.

Software-as-a-Service (SaaS) is now a proven way of providing software to companies. SaaS is gaining increasing acceptance and viability for many software companies, and customers appreciate the fact that much of the work and worry of software management  is now handled by the vendor. However (and this is a BIG however), if the ideas you are promoting and selling as software are not needed in the market — i.e. if the software is not market-driven — porting it to SaaS (or any other model/technology) will not save it; in fact it will complicate it.

Last year Steve Johnson wrote an excellent article called Stop Perfuming the Pig that goes in-depth on this topic. Steve says: “No amount of perfume can overcome the stench of a technology product that people don’t need.” Amen. You have to understand the market and make sure the market needs what you are building.


The Product Management Perspective: These ideas fit squarely in the realm of product management; after all, the product manager is the voice of the market. One of (if not THE) most important responsibilities of a product manager is to have a profound understanding of the market, customers and potential customers his or her software targets. If you are not spending time doing market sensing, take a close look at where you are spending your time, clear up your calendar, and schedule time to understand the market. There are many effective ways to do this and they vary by industry, so you will need to figure out what works.The important thing is that you do it.


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Communicating product vision

Communication has changed significantly in the past several years. Twitter, Facebook and other social media have driven personal interaction to short, succinct statements that force us to be brief and to the point. One of my colleagues on the engineering team recently told me “if you can’t write your spec in 140 characters, I can’t implement it.” Though I’m sure he said it in jest, he got me to thinking about effective communication. Effective communication is the key to creating great products (and services).

One of the best books on creating great products is Inspired: How to Create Products Customers Love by Marty Cagan. He covers pretty much every aspect of product management with compelling stories and examples. One of my favorite chapters is Reinventing the Product Spec; the subtitle is R.I.P. PRD (product requirements document). Cagan points out that “most specs take too long to write, they are seldom read, and they don’t provide the necessary detail, don’t address the difficult questions, nor contain the critical information they need to.” He further states that a product spec (specification) can serve as a false indicator to management and the product team that everything is proceeding to plan.

Cagan states (and I agree) that “the central responsibility of the product manager is to make sure that you deliver to the engineering team a product spec that describes a product that will be successful.” The spec must not only communicate the product vision but also the details of how to build the successful product. Cagan asserts that the only form of ‘spec’ that can deliver everything required is a high-fidelity prototype. While I agree that a high-fidelity prototype is the preferred method to communicate the product vision, most product teams do not have the time or resources to create complete, high-fidelity prototypes for every product.

Recognizing that the old-style PRD is largely ineffective in today’s agile world, but that a prototype is also out of reach for most product teams, here are four attributes that will help you communicate product vision in your specs:

  1. Visual: In the absence of a high-fidelity prototype, at a minimum your product spec must have high-resolution images (mock-ups or screen shots) of how the pages in the product will look. These images need to be written in a way that UI developers can create “pixel perfect” pages in the product that identically match the spec images. The ideal scenario is to have a user experience (UX) designer (or team of designers) that creates these images.
  2. Clear: Your product spec should link the visual representations to descriptions that detail what needs to happen. The spec needs to tell a story. I’ve started using a simple HTML template that shows the descriptions on the left pane with an indicator that points to the high-res images on the right. I attach the spec(s) to the applicable story in the dev sprint.
  3. Simple: Keep to the main points. Never add elements in your product spec that are not necessary to creating your product. Be clear and concise in your descriptions and visuals.
  4. Complete: Your spec needs to completely describe the new product (or version) the engineering team will build. It needs to describe the full user experience. It needs to represent the behavior of the software your engineering team will build. Keep it clear and simple, but make sure it’s complete.

Creating effective product specs requires a lot of work. You will have to iterate frequently and keep an open line of communication with the team. If you keep your specs visual, clear, simple and complete, you can communicate your product vision effectively and create great products.


The Product Management Perspective: Cagan makes the following statement: “The central responsibility of the product manager is to make sure that you deliver to the engineering team a product spec that describes the product that will be successful.” Take a look at your current processes and determine what you can do to improve the way you communicate your successful product to the engineering team.


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Three practices of successful product managers

At the most basic level, a product’s success is measured by how well it sells in the market and the profit it brings to the company. A company’s success is ultimately a roll-up of all products and services selling for a profit. This seems straight forward, and yet in my experience company leaders too often lose track of this important goal. They focus on this marketing campaign or that new technology, and lose track of what’s most important. Granted, sometimes they focus too much on profit at the expense of other important directives, but that’s a topic for another post.

In most companies product managers have a lot of products and significant responsibilities. It’s easy for them to get bogged down in the countless tasks that are thrown their way every day. With all the meetings, floods of email, and requirements to manage, the thought of focusing on a product’s profitability can be illusive. It’s not impossible, however. By focusing on three simple, yet powerful, practices, product managers can channel their products toward profitability:

  1. Know your market: Get a clear understanding of the market where your products compete, and work diligently to stay in front of new trends and technologies. Make customer calls and customer visits often. Work with the sales team; understand how they sell your products. Know what works. Know the weaknesses of the products (and take action to correct them). Understand why people pay (or don’t pay) for your products. Be the voice of the customer to your company.
  2. Provide clear direction: One of the key directives for products managers is to provide clear direction to the engineering/development teams. Good product managers write understandable and timely requirements and prioritize them effectively. They provide solid product design (most effectively with the help of good designers). A key to giving clear direction is for product managers to project their confidence and full support to the work engineering is doing. Earn their trust. Inspire them to do great things, especially when developing your products.
  3. Launch successfully: A successful product launch depends on a coordinated launch plan involving many different groups. Product managers are in a unique position to facilitate successful product launches. Start with a tight, focused beta program; learn from the testers and change accordingly. Help product marketing set the proper tone for the launch by understanding the new product’s strengths. Work in tandem with the customer support teams to monitor product acceptance and make changes where necessary. Work with the sales team to make sure they understand the new product and hit the ground running when it releases. After a successful launch, monitor the product’s uptake and financials and make sure it continues to succeed. This, of course, loops back to knowing your market and making sure your product meets the needs of the people in your market.

These three practices cover the most important bases for creating successful products. You should plan time to focus on these elements on a daily and weekly basis. If you are in a leadership position in product management, take time to evaluate your team and make sure they are focusing on these key practices that will lead to profitable products.


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Book Review: Here Comes Everybody

“Revolution doesn’t happen when society adopts new technologies–it happens when society adopts new behaviors.” Clay Shirky, author of the book Here Comes Everybody: The Power of Organizing Without Organizations, provides an eye-opening look at how technology is changing the way we think, work and live. The book helped me understand more clearly how the Internet has changed the way we interact and get information. Here are several ideas I found incredibly insightful:

  • “The tools that a society uses to create and maintain itself are as central to human life as a hive is to bee life.”
  • “The basic capabilities of tools like Flickr reverse the old order of group activity, transforming ‘gather, then share’ to ‘share, then gather.’”
  • The Internet is allowing amazing things to happen: “Large decreases in transaction costs create activities that can’t be taken on by businesses, or indeed by any institution, because no matter how cheap it becomes to perform a particular activity, there isn’t enough payoff to support the cost incurred by being an institution in the first place.”
  • “The Web didn’t introduce a new competitor into the old ecosystem, the Web created a new ecosystem.”
  • “In the same way you do not have to be a professional driver to drive, you no longer have to be a professional publisher to publish. Mass amateurization is a result of the radical spread of expressive capabilities, and the most obvious precedent is the one that gave birth to the modern world: the spread of the printing press five centuries ago.”
  • Regarding Wikipedia: “If even only a few people care about a wiki, it becomes harder to harm it than to heal it.”
  • On forming groups: “The net effect is that it’s easier to like people who are odd in the same ways you are odd, but it’s harder to find them.”
  • “The most profound effects of social tools lag their invention by years, because it isn’t until they have a critical mass of adopters, adopters who take these tools for granted, that their real effects begin to appear.”
  • “What is likely to happen to society as a whole with the spread of ridiculously easy group-forming? The most obvious change is that we are going to get more groups, many more groups, than have ever existed before.”
  • “The dramatic improvement in our social tools, by contrast, means that our control over those tools is much more like steering a kayak. We are being pushed rapidly down a route largely determined by the technological environment.”
  • “Anything that raises the cost of doing something reduces what gets done.”

Changes are happening at a breakneck pace; we can either embrace them and use them to our advantage, or ignore them to our peril. If you want to gain a much deeper understanding about how society adopts new behaviors, Here Comes Everybody is a must-read.


The Product Management Perspective: What can you say when your boss walks in and throws a new book on your desk? My answer was something like “sure, I’ll read it when I have some time.” And soon after I started, I found the time. Shirky’s book is an excellent read for product managers. He challenges assumptions such as how you make money on products: “If a large enough population of users is trying things, then the happy accidents have a much higher chance of being discovered.” He causes you to dig a lot deeper to find answers to your perplexing product problems: “In business, the investment cost of producing anything can create a bias toward accepting the substandard.” He tells us (something we already know of course) about our product: “it must be designed to fit the job being done, and it must help people do something they actually want to do.”

This last quote sums up nicely the role of product manager: “Because of transaction costs, organizations cannot afford to hire employees who only make one important contribution–they need to hire people who have good ideas day after day.” That’s our job…good ideas day after day.


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Social media summit

This past week I had the pleasure of attending a social media summit. This half-day event included three speakers: Mitch Joel, author of Six Pixels of Separation and Julien Smith and Chris Brogan, co-authors of Trust Agents. The presentations were excellent. I had the privilege of spending a few minutes talking with Chris; he was an absolute gentleman. Though the talks were fast and furious, I wrote as fast as I could on Twitter and wanted to share some of my thoughts with you:

From Chris’ talk:

  • @chrisbrogan giving a new presentation: mindset (babymind), business, currencies, trust
  • People who grew up on the “will click anything” web are poised for success – they’re not afraid of breaking things
  • most of us are in relationship businesses but we don’t know it
  • @chrisbrogan “community is my favorite business tool”
  • tell stories, use human interaction to get your message out
  • “stories sell things in a way your stupid copyright never will”
  • @chrisbrogan promotes others twelve times more than he promotes himself; when he needs help from others it comes immediately
  • blogging is @chrisbrogan ‘s way of letting people get into his head
  • One of the biggest mistakes we make on the web is we forget to ask about the ‘other person’
  • from @chrisbrogan “small, private communities are where some really cool things are going to happen in the next few years”
  • The real opportunity is to switch from “recipes” to “restaurants” – take the info you’re learning and put it to work to gain
  • 3 things to pay attention to: 1) mobile (not just a “Foursquare” checkin)
  • 3 things to pay attention to: 2) private networks/communities (cermo, others) – not Farmville
  • 3 things to pay attention to: 3) Social CRM – a real opportunity to get closer to both the dollar and the customer
  • a question to ask yourself: “how can I be helpful faster” @chrisbrogan
From Julien’s talk:
  • Quotes from @julien “The channel is forever” “controlling you future means controlling the channel”
  • “Build a network *before* you need it” “A network doesn’t just help you with jobs, it makes you happy”
  • Networks dissipate over time; you need to be consistently working to improve them over time
  • “Building a tribe is critical” you need to offer people a place where people gather and care - @julien
  • “pattern breaking” every time you create an emotional response people remember you
  • the Internet is the best (only?) place where you can convert social capital to monetary capital … @julien
  • @julien recommends the book Connected - http://amzn.to/aFCKU7
  • More from @julien: “be the lead goose” if you become the lead goose, everyone will follow you; you will help your network #leadership
Unfortunately I didn’t start taking notes during Mitch’s talk (he went first).

My #1 takeaway from the conference was this: the more you give to others and look out for their best interests, the more you’ll get back in return.


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What matters in 2010?

With just a few weeks left in 2009 you have no-doubt spent time thinking about the events of the past year and the growth and changes that have resulted.

What matters in 2010? Seth Godin, marketing guru and thought leader, did a cool project where he brought together more than seventy “big thinkers” to write the ebook What Matters Now. His purpose: “Now, more than ever, we need a different way of thinking, a useful way to focus and the energy to turn the game around.” Here are a few of the thought-provoking ideas:

“If you make a difference, people will gravitate to you. They want to engage, to interact and to get you more involved.” -Seth Godin

“Leadership is more than influence. It is about reminding people of what it is we are trying to build—and why it matters. It is about painting a picture of a better future. It comes down to pointing the way and saying, ‘C’mon. We can do this!’” -Michael Hyatt

“Here’s the final measure of your success as a speaker: did you change something? Are attendees leaving with a new idea, some new inspiration, perhaps a renewed commitment to their work or to the world?” -Mark Hurst

“The road to sustainability goes through a clear-eyed look at unsustainability.” -Alan M. Webber

“After a decade of truly spectacular underachievement, what we need now is less management and more freedom – fewer individual automatons and more autonomous individuals.” -Daniel H. Pink

“The future belongs to people who can spread ideas.” -Guy Kawasaki (read Guy’s ‘ten things to remember’)

“You can earn attention by creating something interesting and valuable and then publishing it online for free.” -David Meerman Scott

“You’re probably trying to change things at home or at work. Stop agonizing about what’s not working. Instead, ask yourself, ‘What’s working well, right now, and how can I do more of it?’” -Chip Heath & Dan Heath

“You grow (and thrive!) by doing what excites you and what scares you everyday, not by trying to find your passion.” -Derek Sivers

“Winning businesses have a common trait, an obvious and divisive point of view. Losing businesses also have a common trait, a boring personality alienating no one and thus, sparking passion from no one.” -John Moore

“My eyes have been opened to the value of regularly closing them.” -Arianna Huffington (on the value of sleep)

“The secret learned by technology providers is to spend less time providing services for citizens, and to spend more time providing services to developers…This is the right way to frame the question of ‘Government 2.0.’ How does government become an open platform that allows people inside and outside government to provide better services to each other?” -Tim O’Reilly

“Declare war on passivity. Hush the inner voice that insists you’re over the hill, past your prime, unworthy of attaining those dreams. Disbelief is now the enemy, as is the notion of settling. Get hungry — hyena hungry. Get fired up. Find your backbone, and your wings.” -J.C. Hutchins

Seth and his coauthors are trying to get five million downloads of the ebook. Help them out; you will be the beneficiary. Read Seth’s post about the ebook here.


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Three reasons PMs need an iPhone

iPhoneRarely do I make specific product recommendations at Lead on Purpose. However, five weeks ago I purchased an iPhone 3GS (granted, I’m not an early adopter) and the experience has been phenomenal. In only a few short weeks I have come to depend on its functionality for my work in product management and product marketing. I have come up with the following three key functionalities that make the iPhone imperative to the work product managers and product-marketing managers do every day:

  1. Camera: PMs often have ‘white-board’ conversations with development and other groups where they map out requirements and other valuable information. Being able to quickly snap photos and easily put them in your deliverables is incredibly valuable.
  2. Apps: The iPhone has many applications, which are valuable for two reasons: a) Many companies are looking at producing mobile applications. The iPhone platform is the best for mobile applications. You need an iPhone to look at existing (potentially competitive) apps so you can better understand your market(s) and write effective requirements that will move your product line in that direction. b) There are many applications that will help you do your job more effectively. Several come with the iPhone and many others are available.
  3. Voice memos: Customer visits are an important aspect of the job. One of the frustrating aspects for me over the years has been trying to take adequate notes during the visits while still paying attention and asking meaningful questions. With the Voice memos feature you can record the conversation and then go back to the conversation and round out your notes. I used this feature twice today and am absolutely hooked.

I realize there are other valuable devices that can be used in place of an iPhone. I know of several PM groups that have acquired a digital camera, and voice recording devices are not uncommon. However, to have all this functionality in one device is absolutely worth it.

Bonus: Ok, there are several other not-necessarily-for-work reasons to get your iPhone:

  • The Internet access is phenomenal
  • Email synch works flawlessly (both to corp email and Gmail)
  • The text (SMS) messaging app on the iPhone is the best (i.e. easiest) I’ve used
  • The Maps app comes in handy when traveling
  • Oh, did I mention it has an iPod built in?
  • UPDATE: The iPhone has a phone! I know, I’ve had many people tell me that the phone part of an iPhone is weak at best, but for me (in my short five weeks), it’s worked well. I’ve had roughly three dropped calls out of hundreds I’ve made so far. Finding the person I want to call is much easier than any phone I’ve used, and the voicemail interface is slick.


The Product Management Perspective: The iPhone is a serious device that will help you do your job more effectively. If you get pushback from your boss, feel free to quote me or you can tell him/her to contact me directly and I’ll be happy to plead your case.


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The LOVE of leadership: Experience

The practice of love in the context of leadership is both powerful and necessary. Steve Farber describes this clearly in his audio book Extreme Leadership: In Pursuit of the OS!M. What does it mean to love the people you lead? My definition for the acronym LOVE embodies the actions necessary to cultivate positive behaviors that lead to successful results:

  • L – Listen
  • O – Observe
  • V – Value
  • E – Experience

The word experience functions as both a noun an a transitive verb. Among the noun definitions is: direct observation of or participation in events as a basis of knowledge. The verb definition includes: to learn by experience. Both emphasize the need to engage in the activities and efforts of others. They imply action. The act of experiencing connotes an exertion of effort on the part of the leader to work on a level that the people they lead (or manage) will see them functioning at their level. This will help them gain confidence in the motives that drive their leader.

Trust is a key factor of success in every organization. As a leader you need to conduct yourself in a way that the people whom you lead will trust you. By the same token, you need to trust the people you lead to do what they say they will do. As you experience their work you will gain insight into what motivates them to do great things and they will trust you and discern your integrity.

practical-lessons-in-leadership1Leaders who spend time with their people get to know their them on a deeper level. This goes both ways. In their book Practical Lessons in Leadership, the authors Art Petty and Rich Petro provide excellent insight into what attributes make a great leader. Among the most important is getting to know your team. You come to know what your people want. They start seeing you as someone who cares about their ideas and careers. They want to work for you and will give their best effort.

Noting that many managers do a lousy job of spending time with their associates, Petty and Petro point out the importance getting to know them:

Nothing is more important (after understanding your mission) than providing quality time to your associates in both group and one-on-one settings. Your willingness to meet with your team and to invest your time in listening to their ideas, issues and concerns is an important tool for building your leadership credibility. The perception that ‘you care’ is powerful and priceless (p. 80).

Your ability to experience ‘a day in the life of’ the people you lead will differ depending on the size of your organization. In large organizations the CEO cannot meet with and know every employee. However, with new technology and honest effort, leaders can communicate their concern and connect with everyone who works for them.

Take action to experience life on the floor or in the cubicles of the people in your organization. Gain a deep understanding of what they do and what motivates them. Your efforts to feel what your people feel will result in unity of purpose and energy in your organization.

This is the last post in the series The LOVE of leadership. Your comments, critiques and analysis are welcome. Please leave a comment with your take on the role love plays in leadership.

The Product Management Perspective: Product managers work closely with people from different parts (i.e. teams) of the organization. When you interact with other teams, make the effort to experience what they do and why they do it. Work diligently to understand how things look from their vantage point. And when you make decisions, keep in mind how the results will influence other people. Love the people you work with and inspire them to succeed.


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The power of the right product (or service)

What is the most important role in a company? That question has been debated endlessly, and as the idiom goes, the “jury is still out.”

If you think about this question not from the perspective of the role, but from the perspective of the outcome, you start to shape opinions that at least get you closer to the answer. Successful companies sell the right products and/or services to their markets. Think about how having the right product (or service) affects every part of your business:

  • Sales: The sales team has no problem convincing prospective customers to buy. When prospects learn about the benefits they will buy right away. The sales team’s job is straight forward.
  • Marketing: Getting the message out about your company’s offerings is easy because the products meet the needs of the target market. The marketing team does not have to worry about perfuming the pig and can concentrate messaging greatness.
  • Accounting: The CFO’s job is easy; he or she can focus on investing for the future and not have to worry about making the quarter or how many employees to lay off.
  • HR: Hiring great people is easy because of the reputation of the company.
  • Engineering: The architects and developers love coming to work every day. They continue to release high-quality products and love every minute of it.
  • CEO: The happiest person in the company is the CEO. He or she understands the value that comes with the power of the right product (or service).
  • etc.: Every function in the company runs smoothly.
Which role is responsible for the right product? It varies from one company to another, and depends on the size of the company and the type of business. In today’s technology-rich companies the role of getting the right products (and yes, services) falls to Product Management.

If you don’t have product managers in your company, get them. If you have them, treat them well. If you are an executive, put your best leaders on the product management team, build it out, empower the people on the team to do great things. You will benefit every other part of your organization by putting your money and your confidence behind the product management team.

The Product Management Perspective: Product managers, do you agree with my take on the importance of your role? Does your management understand the value you can bring? If they do…excellent! Keep moving forward. If not, send them a link to this post and start educating them about the power of the right products and services.

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