(2015-06-05) Cagan Product Fail

Martin Cagan: Product Fail. I’d like to discuss the root causes of so many product failures. (Note this became Chapter 6 of Cagan Inspired.)

I see the same basic way of working at the majority of companies, and I can’t help but notice that this is not close to how the best companies actually work.

Let’s start by walking through the process that the vast majority of companies still use to create products.

Everything starts with ideas. In most companies, they’re coming from execs or key stakeholders or business owners

Now most companies want to prioritize those ideas into a roadmap.

In order to do this, there is almost always some form of quarterly or annual planning session where the leaders consider the ideas and negotiate a product roadmap. But in order to prioritize, they first need some form of a business case for each item.

At this point the product and technology organization has its marching orders, and they typically work the items from the highest priority on down.

Once an idea makes it to the top of the list, the first thing that’s done is for a product manager to talk to the stakeholders and flesh the idea out and come up with a set of “requirements.”

Finally the requirements and design specs make it to engineers. This is usually where Agile finally enters the picture.

In the vast majority of companies that I first meet, large and small, this is essentially how they work, and have worked, for many years. Yet these same companies consistently complain about the lack of innovation and the very long time it takes to make it from idea to customer’s hands... You might recognize that while I mentioned Agile, and while almost everyone today claims to be Agile, what I’ve just described is very much a Waterfall process... What I want to do now is to connect the dots for you to show you why this very common way of working is actually responsible for most failed product efforts.

what I’m going to do here is share what I think are the “top 10” most serious problems with this way of working. To be clear, I’m arguing that all ten of these are very serious issues, any one of which could derail a team, but many companies actually have most or even all of these problems.

1. Let’s start at the top – the source of ideas. This model leads to sales-driven specials, and stakeholder-driven products. Lots more to come on this key topic, but for now let me just say that this is not the source of our best product ideas.

2. Next let’s talk about the fatal flaw in these business cases.

3. An even bigger issue comes next. Companies get very excited about their roadmaps.

I call this the “two inconvenient truths about product.”

The first truth is that at least half of our ideas are just not going to work... the really good teams assume that at least three quarters of the ideas won’t perform like we hope.

the second inconvenient truth is that even with the ideas that do prove to have potential, it typically takes several iterations to get the implementation of this idea to the point where it actually delivers the necessary business value. We call that “time to money.”

The real difference is how you deal with these truths.

4. Next let’s talk about the role of product in this model. In fact, we wouldn’t even really call this role product at all.

5. It’s a similar story with the role of design. It’s way too late in the game to get the real value of design

6. Maybe the biggest missed opportunity in this model, is the fact that engineering gets brought in way too late. We say if you’re just using your engineers to code, you’re only getting about half their value. The little secret in product is that engineers are typically the best single source of innovation, yet they are not even invited to the party in this process

7. Not only is engineering brought in way too late, but the principles and key benefits of Agile enter the picture far too late. Teams using Agile in this way are getting maybe 20% of the actual value and potential of Agile methods

8. This entire process is very project-centric.

Unfortunately, projects are output and product is all about outcome.

9. The biggest flaw of the old Waterfall process has always been, and remains, that all the risk is at the end. This means that customer validation happens way too late.

You’ve hopefully heard of Lean Startup methods, which are very much at the heart of the alternative. The key principle is to reduce waste, and one of the biggest forms of waste is to design, build, test and deploy a feature or product only to find out it is not what was needed. The irony is that many teams believe they’re applying lean principles, yet they follow this basic process I’ve just described. And then I point out to them that they are actually trying out ideas in one of the the most expensive, slowest ways we know.

10. Finally, while we’re busy doing this process and wasting our time and money, the biggest loss of all usually turns out to be the opportunity cost of what the organization could have and should have been doing instead.

I have written many articles about the various aspects of how the best teams work. Product Discovery is how we come up with winning solutions to the problems we are attacking. Discovery is an active and ongoing collaboration between product, user experience design, and engineering. Continuous Discovery and Continuous Delivery happen in parallel.