I recently discussed the Product Operating Model concept with a client. He challenged me – "Build me a bike, I need a quality bike" he demanded. It's a natural human instinct to gravitate towards solutions we know, solutions within our realm of experience.
But I pushed back. "Hold on," I said. "Let's dig deeper. Tell me, why do you need this bike? Are you battling city traffic for your daily commute? Looking for an eco-friendly way to get around?" His needs, not his solution, were the true starting point.
That's when it hit home. Two options emerged:
a) Build a bike (the requested solution) b) Buy a subway pass (an alternative that serves the same need)
Both would solve his problem. Yet, the landscape of technology is a whirlwind. New possibilities emerge daily. Technology and our reality are changing every day. Your software teams can serve you better when they understand the underlying problem for your business success.
Most companies today have a depressingly low percentage of features and projects on their software product roadmaps that generate a positive return on investment. Most industry analysts place it between 10 and 30 percent (according to Marty Cagan). Working with stakeholders, I observe that they naturally communicate via solutions. Software teams are optimized to serve the stakeholders rather than your customers in ways that work for your business. Paradoxically, this optimization isn’t working well for stakeholders. It’s widely accepted that investments in custom software have a high failure rate and outcomes that don’t satisfy them.
For years, the Zero Interest Rate Policy (ZIRP) era enabled a certain degree of inefficiency. Businesses could afford to keep projects going, even without stellar results. Today, the environment is very different. We don't have endless time – we have to shift our focus to 'time to money', the time it takes to see a return on investment.
That requires a different approach and the way teams work.
The root of the problem is a deep-seated misalignment: feature teams are structured primarily to execute, focusing on meeting internal stakeholder demands rather than addressing customer issues in ways that benefit the entire business. Consider a scenario where stakeholders, deeply familiar with their own operational challenges, suggest features they believe will foster improvements. The feature team, operating under these directives, outlines the necessary deliverables and timelines. However, it’s crucial to remember that each proposed feature represents a potential solution—and solutions can be hit or miss. Ultimately, the responsibility for a feature's success or failure often falls to the requesting stakeholder, who might not fully grasp the intricacies of the technology involved.
This dynamic leads to a lack of accountability for business outcomes within the feature team. If a feature does not perform as expected, the blame game begins: the feature team points fingers at stakeholders for misguided instructions, while stakeholders contend that the execution was flawed. As a result, 'orphaned' features accumulate, never truly delivering value.
The solution? Shift the focus from merely building features to solving core business problems. By collaborating closely with stakeholders, teams can trace features back to the fundamental customer or business needs they aim to address. Defining clear success metrics and desired impacts enables teams to craft customer-centric solutions that not only meet but propel business objectives forward. This empowered approach ensures that teams are not just implementers, but key drivers of the business's forward momentum.
These teams are characterized by:
Using those tools not just save time and money, but also becomes the engine for consistent customer value creation. Those teams start strategically serving customers in ways that deliver true business impact.