Transforming companies from output and project driven approaches to outcome and product driven approach.

Part II: Project vs Product Driven Teams

The biggest challenge of my professional career so far was surely changing from a output to an outcome focused company. I entered into an environment that for years has been driven by 6 - 12 months projects that largely focus on quantitative output goals and hardly interacts with customers.  When I entered I was astonished by the level of confusion  about progress and deliverables throughout the entire company and overwhelmed by level of frustration from engineers to marketing to the managing founders. 

For the first two months I spend my time only interviewing people from within the company and interviewing people who have been working with the company or could be a potential clients of the company. The result of these interviews was astonishing and partially at least encouraging. The projects that had been launched where all filled with good intentions and occasionally even with some market insights. However the sheer duration of them in an environment that is constantly changing lead to the biggest chaos that I have witnessed so far.  While a project was half way through its dedicated time frame, the participants and stakeholders involved grew immensely frustrated and stressed that the project was constantly delayed, not fitting the new requirements. So the project was stopped and another project with the same timeframe was launched instead. The holding cost within this company where extremely high as not one single project made it out of the door of the company and therefore not even one client / customer could engage with it.

Looking at my analysis after 2 months of intense talks I was laying out a plan for the management team and myself on how to tackle bringing meaningful products to our customers. We started setting up a small team and started to set up the first takes on a more user and outcome driven task force. I will tell you in a bit on what the key features of those are but let me diverge for a moment at this part.

Changing a company culture and changing from project to product teams is by no means a simple and fast task. As I am writing this the change is still in progress and it will be for a while longer. So if you think about creating this change for your company make sure you are set out for a long and sometime very tiring process but I guarantee you the small but constant successes will start coming your way rather soon  and will help you to endure the long transition period.

Before giving you my insight into how it worked for me to start the transition, let me let you learn from the thing that absolutely will not work and that I tried at some point as well. Under no circumstance try to change the entire company at once through one big meeting that takes all day and expect everyone to work completely different a day after. It is nothing else but wishful thinking to tackle cultural change like this.

Change takes time and patience and like most things won’t happen over night. If you want change that lasts and can inspire others, start small and take one step after the other. If you can not crawl how are you supposed to be running marathons?

So here is my little starting guide for you:

Pick the most urgent area that needs to be outcome driven

Set up a small team of a minimum of 4 people to start a new product unit with

Define a clear target audience and clear problem that you want to tackle. If you can not do this than start with defining this.

Educate yourself on Design Sprints / Discovery Sprints and set up one to start the transition process

After the Sprint you will be a lot clearer with your next tasks. Now it is important to immediately transition into setting up backlog, planning your next prototypes / discoveries, setting up customer interviews. Use the high energy and high vibe 

Educate the entire company on the process by showing what you did in just one week

Running through these steps should help you but also your management and your colleagues to understand the true difference between working customer centric and outcome driven on a product. Bringing very theoretical discussion to a very tangible and clear how to guide.

Why doing too many things at the same time is the biggest problem of young companies and what you can do about it

Part I: Inventory / Holding Costs are not just a problem of retailers

When I started my business degree I just got out of studying nursing science and 4 years of an engineering specialisation  in high school. Full of theoretical knowledge my main aim of doing the business degree was to be able to start up my own little bar/restaurant/cafe where you can get real goods and real inventory nothing virtual, I wanted to work on something that is very tangible and what would be more tangible than interacting every day with my customers and serve them the best experience possible. With my business degree also came a vividly clear understanding of how much upfront and sunken cost my dream would involve. You have to rent a place, get furniture and most risky you have to manage your inventory. Every day you’ll have to make sure that you have the right amount of food in your little shop, if you don’t have enough and it is a peak you lose loads of valuable customer. If you have to much food is gonna rot or run out of date and you’ll have to rebuy. It is a complex little machinery that needs to be well oiled and have a deep understanding of seasonalities, daily peaks, resource constraints, acquisition channels etc.

What I realised working in Product Management is not so far off from owning my little bar and the challenges that you face by managing a customer facing company become very similar, mainly due to one principal: The customer comes always first. Getting them the best experience for their day and how you can support them on their journey is always my main focus. They are the ones that will make or break your business. I found even more similarity to owning a little coffee place that I didn’t expect and always was convinced it is just a problem with tangible goods of retailers and warehouse owners: Holding Costs. Holding costs are originally used for inventory management to keep your cost low. A little graph to explain:

You might be wondering thinking now “nice story lisa but what does that have to do with my product development if I am working on a digital product?” If you are thinking you are free of holding costs just look into your feature development, think of how many features do you have that are not ready for release yet because there is some small backend, frontend, tracking item missing. If you have at least 5 right now I am sure you know how frustrated I felt when things were so close but just not done yet.

I realised having unused code is my inventory that I have to manage on a day to day basis. If I am ordering new pieces to early my holding costs will increase tremendously. Every time I push a release and the small fracture of my code is just sitting there will ad more time for my engineers, qa, design or analytics team to make sure all the new changes fit the latest changes that I pushed out. More so they will have to switch context over and over again and by the time I am actually ready to release you I was thrown back to square one thinking about additional changes and further tweaks and the whole release process needs to start over again.

Therefore on of my big emphiphanies was that it is absolutely crucial  for anyone working in software environment to consider the holding costs they are producing by not pushing features out leaving pieces around your code base will be pilling up with things you have to throw away because they are outdated, don’t function anymore and are useless.

Holding Costs within software development:

After realising this the answers to how I can overcome my low velocity problem where super straightforward. We started to change our approach as a team to:

• release often and early

• prioritise drastically - if you know you can only build parts of your feature, make sure you really want to bother with it right now, there is no point in having something half done just to make you feel better

• make sure you I can release a feature end to end with a maximum of two releases inbetween

• massive use of feature flags

• work project based together not in a frontend - backend split

A love story of users and deep-links and how you can double your revenue in a heartbeat

Every time I go into a big shopping mall I am overwhelmed with the amount of people
and offers I can get. My safe place is always finding the next information waypoint and studying it insight out to make sure I’ll have the perfect path through this maze of offers and selections. One time though I did exactly that in a big shopping mall in Berlin, was in full swing of my shopping trip and wanted to grab some food before I was on my way out. I knew that I find this really nice pasta place on the 3rd floor right on the very back of the building. But guess what I went there really hungry and then the place wasn’t there instead there was a sneakers shop! Having a mild attack of hangryiness I asked around to figure out where the shop was and it turned out that its on the complete opposite side of the building. My patience ran out though at this point and I just went to the next shop near me and got a small piece of cake and left my shopping trip with a very annoyed feeling in my tummy.

I am sure you can relate to this feeling and relate to it even more so when you are on a website and you click on a link in full expectancy that you’ll end up at the place you got suggested but then complete and utter let down and you see sth that is of no relevance to you at all and just feel lost. You see that suggested website for maybe 5 sec and leave or if you are really really desperate you might take the trip to go through the entire product to find what you were originally looking for.

After that trip through the shopping mall I realised that I had a massive flaw in my product that I was working on and I wanted to figure out how I could make that better for my customers. Working for a search engine can be quite similar to setting up a shop in a shopping mall. You need to have the right shops that related to you but not in competition and you need to know where you position yourself exactly. I took that analogy to bring it into my website. We had users coming from all over the world, with different mindsets, different needs when they were coming to us looking for their answer and they found some of those on our product but for other answers we needed them to visit other websites. It is a truly great way of partnering up as no single product as much as you would like it to be will solves all needs of your users along their journey, not even amazon.  So it was the same for us and we picked the best partners to help with those problems for our users.

Unfortunately that didn’t show in the engagement of our users on our partner product nor did it show in our bank accounts. So I made it my quest to understand with user interviews, smaller a/b tests on where we deeplink each user and each user bucket to not give them disappointment that i felt when I just wanted my plate of pasta. The results of the tests exceeded our expectation, within one week of testing we already managed to double our income when another month passed we were able to keep that growth trajectory from the first week and managed to develop a small monetisation test into a massive delight for our users plus a very healthy income that was not coming from our main income stream.

After that I realized this simple formula: healthy deep-link = happy customers = good b2b partnership
 

• cross device deeplinking is key

• check on all devices

• create customer segments understand what is there most needed thing right now

• create hypotheses based on your user journey around what these customers might - need at the point you deeplink and test test test test on those clusters

• test with small user interviews and what they expected to see

• test with a/b tests

• make sure you have tracking feeding back from your partners website