The product operating model

Many have witnessed failed transformations, but few have witnessed true successes. 

Moving to the product operating model is a transformation. At the end, it's about consistently creating technology-powered solutions that your customers love, yet work for your business. It's about delivering real results. But what do you change exactly?

You change how you build. Products are managed as an ongoing effort - improving every week until it's decided to sunset it. You do frequent, small releases so you know that it's working and how it's being used.

You change how you solve problems. Empowered product teams are given problems to solve and outcomes to achieve instead of a list of prioritized features, projects and perceived solutions decided by various stakeholders.

You change how you decide which problems to solve. A strong product company has a compelling product vision and insight-based product strategy identifying the most critical problems that need to be solved to deliver on the business objectives. Your strategy cannot be to serve as many business stakeholders as possible.

Pushing the decisions and responsibilities for finding the best solution to the problem down to the relevant product team, and then holding that team accountable for the results also drives the need for new product core competencies (that normally takes years to learn). 

Unless you are willing to establish these new competencies, your transformation hopes will likely end here.

For the product team together with the product manager to discover and deliver effective solutions, it is absolutely critical that they have direct access to:

  1. Users and customers,
  2. Product data, 
  3. Business stakeholders and
  4. Engineers (the tech lead as a minimum).

Fight any attempt to place a well-meaning person or cumbersome process between the product manager and these constituencies.

An honest and accurate assessment of the organization’s current situation is essential to any plan to successfully transform. Be realistic, talk to all levels and look for evidence. 

Start with pilot teams volunteering to be on the leading edge of these changes. Develop the skills of the product teams (bottom up) and the skills of the product leaders (top down). Ensure your CEO supports and is a champion of the change.

Transformation is a long game, and for that reasons it helps to have some quick wins. It could simply be a team that has never visited users starts doing do and shares it experiences and insights. 

Constantly beat the drum, evangelize and show everyone the progress being made.

"Transformed - Moving to the product operating model" by Marty Cagan.

Discover the right products

How do you know that you are making a product or service that your customers want?

It’s not only about delivering things right, but also about discovering the right things to deliver. You can't have one without the other.

Discovery is continuous. At a minimum, weekly touchpoints with customers by the team building the product where they conduct small research activities in pursuit of a desired outcome.

Customers don't always know what they want, and what customers ask for isn't always what they need. Don't ask them what you should build. 

Ask them to share specific stories about their experiences. Avoid direct and factual questions because we struggle to answer them accurately.

The purpose is to discover and explore opportunities, i.e., what needs, pain points and desires matter most to this customer? 

The Opportunity Solution Tree (OST) is a framework for continuous discovery and a simple way to visually represent the paths we may take to reach a desired business outcome.

The opportunity space represent customer needs, pain points and desires that, if addressed, will the drive business outcome. 

The solution space represent solutions addressing the opportunities, and rather than testing solutions we test assumptions that need to be true for our solution to succeed.

A visualization and a tree structure helps building a shared understanding, it helps you break large opportunities into a series of smaller ones, you avoid "whether or not" decisions, it makes it easier to summarize your work to stakeholders, and it makes it easier to prioritize.

Product strategies happens in the opportunity space. Prioritize opportunities, and not solutions.

To test assumptions you need to generate assumptions. You can imagine that the solution already exists and then map out each step users must take to get value from it. This forces you to be specific and it forces you to make desirability, viability, feasibility and usability assumptions.

You can't test every assumption. You need to prioritize and to prioritize you need to identify the riskiest ones. How much do we know about this assumption, and how important is this assumption to the success of the solution?

When testing an assumption, be specific with your evaluation criteria upfront. 

The team must align around what success looks like. Don't throw spaghetti at the wall, hoping something stick. Remember, you are not trying to prove that the assumption is true. You are simply trying to mitigate risk, and stop when you have mitigated enough.

"Continuous Discovery Habits" by Teresa Torres


How do you decide?

We make thousands of decisions every day – some big, some small. 

What we do have some control over, what we can improve, is the quality of our decisions.

Any decision is, in essence, a prediction about the future. Making a decision is making a guess about how things might turn out.

Your decisions will only be as good as your ability to anticipate how they might turn out. 

You can rarely guarantee a good outcome (or a bad one). The goal is to try to choose the option that will lead to the most favorable range of outcomes.

Good outcomes can result from both good and bad decisions, and bad outcomes can result from both good and bad decisions.

  • Step 1, for each option under consideration, identify the reasonable set of possible outcomes.
  • Step 2, identify your preferences using the payoff for each outcome – to what degree do you like or dislike each outcome, given your goals and values? If an outcome moves you toward a goal, the payoff is positive. If an outcome moves you away from a goal, the payoff is negative.
  • Step 3, estimate the likelihood of each outcome unfolding. You know enough to make an educated guess. All your knowledge, imperfect as it might be, means that your guess isn't random. The willingness to guess is essential to improving decisions.
  • Step 4, assess the relative likelihood of outcomes you like and dislike for the options under consideration. With the possible outcomes, payoffs and probabilities, you can now see how the upside compares to the downside, whether the possible gains compensates for the downside.

These four steps force you to assess what you know, and seek out what you don't.

Increasing accuracy costs time. Saving time costs accuracy.

The challenge for any decision-maker is that you want to accomplish two things at once: You don't want to waste too much time and you don't want to sacrifice too much accuracy. The key to balancing the trade-off between time and accuracy is figuring out the penalty for not getting the decision exactly right.

If your goal is to get certainty about your choice, you will be stuck in analysis paralysis and never be finished. Pretty much every decision is made with incomplete information.

One of the best tools for improving your decision-making is to get other people's perspectives.

When asking for input or advice, don't offer your opinion first. When you tell someone what you think before hearing what they think, you can cause their opinion to bend toward yours, oftentimes without them knowing it. Provide what the person needs to know to give worthwhile feedback – and nothing more.

The goal of good decision-making can't be that every single decision will work out well. That's an impossible goal. Embracing that fact is necessary for becoming a better decision-maker. 

Your goal is, across the portfolio of all the decisions that you make in your life, to advance toward your goals rather than retreat away from them.

"How to decide" by Annie Duke

How to change anyone's mind

Everyone has something they want to change, but change is hard. 

People and organizations are guided by conservation of momentum. Inertia. We tend to do what we have always done.

When trying to change minds and overcome such inertia, the tendency is to push. 

We assume that pushing harder will do the trick. That if we just provide more information, more facts, more reasons, more arguments, or just add a little more force, people will change. Unfortunately, that approach often backfires. People and system pushes back.

Rather than thinking about what you could do to try to create change, ask yourself why things haven't changed already. What’s stopping people? What are the parking brakes?

Stop trying to persuade and instead get people to persuade themselves. Let them choose how they get where you are hoping they will go. People like to feel they have control over their choices and actions.

Start by understanding. Ask, don't tell.

Before people will change, they have to be willing to listen. They have to trust the person they are communicating with.

If you want to truly understand something, try to change it. You can also reverse it. To truly change something, you need to understand it.

Change is also hard because we tend to overvalue what we already have or already are doing.

We compare things to our current state. The status quo. To get people to change, the advantages can't be just a little better; it has to be a lot better. Research suggests that the potential gains of doing something have to be 2.6 times larger than the potential losses to get people to take action. 

You need to surface the cost of inaction. You must make it easier for people to see the difference between what they are doing now and what they could be doing.

People think that, when changing minds, someone has to lose. 

Two chefs needed the last orange in the kitchen for an important dish.  They argued back and forth, but took a big knife and split it half leaving both with only half of what they needed. However, one chef needed the juice for a sauce, and the other needed the peel for a cake.

To change minds, find the root. Discover whatever needs and motivations are driving behavior in the first place. Find the root and the rest will follow.

'The Catalyst: How to Change Anyone's Mind' by Jonah Berger.

The five truths about architecture modernization

We need to be brutally honest. Modernizing technology within established businesses is hard. 

According to Thoughtworks almost 75% of organizations that embark on legacy modernization projects fail to complete them.

So what can we do? Here are my key takeaways from the first six chapters of Nick Tune's excellent book "Architecture Modernization
Socio-technical alignment of software, strategy, and structure".

1. You don't modernize for the sake of modernization!

You need to express the true business narrative, the desired business outcomes and understand how architecture modernization can drive it.

Legacy architectures are usually providing some business value, but they are also slow and expensive to change, prone to unreliability and increasingly open to new security compromises. 

The costs of software decay become visible when the costs of repair are high.

2. A modern architecture is a socio-technical architecture!

How we organize people and their interactions will be mirrored in our architecture.

When you start modernizing, don't design the social structure (teams, organization, workspace) and the technical system architecture in isolation.

3. Surprise, there is no quick fix!

Moving from aging to modernized architecture is hard, and it's complex. If this was a quick fix, it wouldn’t be one of the biggest problems companies today face. 

That said, it shouldn’t take years for modernization to start delivering value. 

The architecture is never fixed and will continuously evolve as the context is changing. Don’t treat modernization as a traditional one-off project.

4. Modernization is touching every aspect of your operating model!

Will you modernize with the same operating model, mindset and way of working that caused the garden to overgrow in the first place? Bad idea.

You should embrace deep changes in how you empower cross-functional & value stream aligned product teams, involve the users, break down the business and IT barriers, adjust the funding models and invest in technical quality.

At least if you want to avoid yet another large and expensive modernization initiative in a few years.

5. Modernization is a social activity!

Modernization is a social activity where diverse groups come together and share their knowledge to make as much details and complexity visible.

You must get rid of the traditional mindset of treating “THE BUSINESS” (the customer giving orders) and “IT” (the vendor taking orders) as separate units. They are in fact two sides of the same coin. 

This is not just about rebuilding an old system, it’s also about modernizing the business domain and business processes. It's a joint effort.

What do you think companies must do to succeed with architecture modernizations?