I was introduced to Martin Cagan, the head of the Silicon Valley Product Group. Martin has an impressive track record and is an expert in product management. And he seems like a really nice guy. I was told his article "The Top 12 Product Management Mistakes - And How To Avoid Them" is a legend in the valley. And his collection of writings is impressive. I am making my way through them all.
I thought I would post some comments about each of the 12 mistakes that Marty has identified and add solutions based on ODI
. The ODI method, language, and quantitative tools are very helpful in addressing each of these problems. My analysis of the first two mistakes is below (the others will follow soon).
First, a quick review of some definitions we use. A customer need is a job that the customer is trying to get done, i.e. the task or goal the customer is trying to accomplish (for example, develop code, restore blood flow, communicate while mobile, etc.). Every job has between 50-150 outcomes, or metrics, that relate to performing the job with speed, stability and predictability (these include time, likelihood, frequency, amount, risk, and number). The job executor is the customer who actually performs the job.
The value chain includes all the payers who help make, distribute, or service the solution, and each of these players have their own set of jobs to accomplish that are separate from the job executor. Purchase decisions are sometimes made by the job executor and sometimes by people in an organization who have different jobs to accomplish than the job executor. Jobs can be separated into functional jobs, emotional jobs, and consumption chain jobs. Functional jobs are the actual tasks that need to be performed. Emotional jobs can be personal (jobs that make you feel better about yourself) or social (jobs that make other people perceive you as a better person). Consumption chain jobs include purchase, receive, install, set-up, learn-to-use, interface, etc. Consumption chain jobs are separate from the functional job because no customer buys a product to install it or interface with it - they buy the product to get the functional job done.
So let's review the 12 product management mistakes and add some ODI solutions.
1. Confusing customer requirements with product requirements.
Marty identifies three problems with letting marketing or sales or the customer define the product to be built. Let's look at each in detail.
First, he states that "customers don't necessarily know what they want." Marty is correct in the sense that customers don't know what solution they want. But they certainly do know what job it is that they are trying to get done. For example, customers didn't know they wanted a microwave, but they certainly knew they wanted to prepared food quicker. This is why innovation has to focus on the job the customer is trying to get done, not on the the solution (the product or service). If the job is the unit of analysis, the value of a solution can be quantified and predicted with much greater accuracy without having to build it.
This is also why we believe there is no such thing as a "latent need." When people use the term "latent need", they are usually referring to the solution, not the need. In other words, customers didn't know they needed a microwave, so they must have had a latent need for a microwave. But there are no latent needs because customers always know perfectly well what job they are trying to get done. The certainly knew they had to prepare food quicker (a need) and the microwave (a solution) addressed that need well.
Second, Marty states that "customers don't know what's possible." What he means is that customers don't know what solutions are possible. This is definitely true and I agree completely. Creating a solution is the role of the company, not the customer. Customers should not be asked what solutions they want - they should be asked what job they are trying to accomplish, regardless of the current solution they may be using or they may think they want. Product requirements should be generated by domain and technical experts only after all the customer needs (the jobs and outcomes) are known and all the needs have been quantified as under-served, over-served, or appropriately served.
Third, Marty writes that "customers aren't in a position to see the wide range of needs and opportunities" and that they don't "have the time to learn about others in the market and how their needs may be similar or different." This is true, but there is a solution. The needs are the same for all job executors because the job is universal - it has process steps (a map) and 50 to 150 outcomes. In other words, in a market all the customers (the job executors) are trying to execute the same job. So their needs are the same. What is essential is knowing which of these needs (the 50 to 150 outcomes) is satisfied and how large (in dollars) is the opportunity.
Product managers should begin the product development process with an innovation step. Innovation entails identifying the customer needs, quantifying the needs, calculating the addressable and securable market opportunities, generating a solution (platform, business model, and feature set), and validating the solution with a statistically significant customer sample.
2. Confusing innovation with value.
Marty writes, "Innovation without a clear purpose is simply technology looking for a problem to solve." We use a different definition of innovation than Marty, and what he seems to be saying here is that "technology R&D without knowing the customer needs is simply an idea looking for a need to fill." And I agree with this. It is why we define innovation without any reference to technology. Innovation is creating and validating a solution concept (regardless of the technology to implement it) that satisfies customer needs.
In ODI, a "problem to solve" is defined as a customer need (the job and its outcomes). This definition aligns the interests of everyone in the company: the board, the executives, the product manager, the engineers, the marketers, the sales team, etc. It solves the confusion problem by "providing a clear vision and product strategy," in Marty's terms, or in ODI terms: by providing a complete map of all the customer needs and a way to quantify the opportunities and validate the solutions before any development.
Marty also states that "innovation needs to be in support of providing true customer value." Which is, of course, true. So what is true customer value? We define value from the customer's perspective: enabling the customer to get the job done better. This is the goal of innovation. And it is accomplished by increasing the satisfaction levels of the 50-150 outcomes that customers use to measure the success of getting the job done with speed, efficiency, and predictability. And because each outcome is a metric, each is knowable, measurable, and actionable. So true customer value can be calculated as a percentage between 0 and 100%.