Innovation — where are you?
This post is based on Inspired, by Marty Cagan, with my personal comments and examples.
All of you know examples of companies that started as fast-learning and innovative, and after a certain growth phase, innovation reaches the plateau and some kind of grey bureaucracy takes over. From my personal work experience in several such companies, I recall how frustrated I felt when I noticed that the innovation speed was going down and I was not able to influence it anyhow.
We know the examples of successful large organizations, that continuously positively surprise us with innovations in products, in processes, ways of working, and thinking — Amazon, Google, Spotify, Netflix, Figma.
Losing the ability to innovate is absolutely and demonstrably not inevitable.
Organizations that lose the ability to innovate at scale are inevitably missing one or more of the following attributes:
Customer-centric Culture. Companies that do not have a focus on customers — and frequent and direct contact with them — lose this passion and critical source of inspiration. As I explained here, Product teams have to spend a lot of effort, skills and focus dealing with understanding their customers by using different channels (UX research, data analyses, direct client contacts, utilizing knowledge from internal customer support teams, etc).
Customers are always beautifully, wonderfully dissatisfied, even when they report being happy and business is great. Even when they don’t yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf. Jeff Bezos
Compelling Product Vision. By the time companies reach scale, their original product vision is now largely realized, and the team is struggling to understand what’s next. I have written a post on the Product vision, if you are interested to learn in more detail.
Focused Product Strategy. One of the surest paths to product failure is to try to please everyone at once. It is a tendency to move towards the Roadmaps that are Features ordered from the business stakeholders and become “Feature teams”, rather than continue getting insights from the customers and continue being a “Empowered Product team”. I will soon write a post on Focus and Prioritization in Product strategy.
Strong Product Managers. This is typically a major reason for the lack of product innovation. In smaller companies, the CEO or co-founders usually play PM role, but as a company grows bigger, you will need to have strong and capable product managers (see PM skillset here). I have seen companies where project managers, sales representatives, and customers support employees were appointed as Product Managers and they were expected to drive efficient and innovative product development from day one. It didn’t happen, I was not surprised. To become a senior PM, you have to have real practice for 3–7 years, it is not a skill you can obtain from a 2-day training course or by reading one book.
Stable Product Teams. It takes time for a team to learn and get used to each other, especially if the team is diverse (I have a blogpost on this topic as well). If team members are constantly changing, it can disrupt the team atmosphere and dynamics. There is a big company in Estonia, that has a practice of shuffling their product teams every couple of months. They explain it with a need to share the knowledge between the teams and a need for sharing innovation. I think that it should be a balance there between potential stagnation and constant change-frustration.
Engineers in discovery. This is an important key to innovation to have engineers to be involved in the product discovery phase and exposing them directly to customer pain. It can be achieved by involving (at least) a technical lead in the prototyping/discovery stage and customer meetups. This is an interesting topic and I have seen a lot of disbelief regarding this from business stakeholders (these IT guys do not know anything about the business, let them just code), as well as rejection from the dev teams members (just give us ready-made business requirements and we will code them, it is PMs/designer job to meet the clients).
In order to make this happen, company should have a strong product culture, that needs to be nourished and built by a collaboration between CPO and CIO.
Corporate Courage. As companies grow bigger, they usually become very risk-averse. As you have more live customers, it is more you can lose if things will go wrong. But the best technology-product companies know that the riskiest strategy of all is to stop taking the risks. You have to move in a smart way, but your mindset should still be willing to disrupt.
Empowered Product Teams. As mentioned above, it is a tendency to move from the Empowered Product team into the Feature team, which receives orders from the management and business on what features and projects have to be delivered by a certain due date. It is radically different from the approach when a product team is given a PROBLEM to solve, and their job is to come up with the solution HOW to solve it. The empowered product team combines technology and design to solve real customer problems in a way that met the needs of the business.
Product Mindset. In an IT-mindset organization, product teams exist to serve the needs of the business. In product-mindset organizations, the product teams exist to serve the company’s customers in ways that meet the needs of the business. I hope the difference is clear :)
Time to Innovate. When your company is big and has a lot of products that need live operational support, it may happen that product teams deal a lot with maintenance tasks aka “keep the lights on” activities, such as dealing with technical debt and fixing bugs. Some of it is normal and healthy, but you have to make sure that it is still room for teams to deal with impactful and harder problems.
To conclude
If you want your company to continue being innovative, do not lose these attributes. If you are a Product Manager, work on attributes that are in your power and try to explain to your management that other attributes need to be taken care of. If you are a CPO yourself — you know already what to do next :)