In this Dear Melissa segment, Melissa answers listeners’ questions about product transformation.
Show Notes
In this Dear Melissa episode, Melissa answers subscribers’ questions about product transformation.
Q1: As the leader of a new product function initiative, what steps can I take to earn the CEO’s trust and create a company culture that embraces an outcome-driven and product-lead mindset?
Q2: How can I ensure my company is approaching product transformation in the right way?
Q3: How long does it take a strong product manager (junior to intermediate level) to make some positive impact in a company that lacks a good product culture? Should they stick around if there are no big positive changes after a year, or should they move on to try and learn elsewhere?
Resources Melissa Perri on LinkedIn | Twitter MelissaPerri.com
Episode Transcript
Hello, and welcome to an episode of Dear Melissa, from the Product Thinking Podcast. The lines are now open, and we're ready to answer your most pressing product questions. Which prioritization framework would you recommend and why? Hi, Melissa. Do you have any suggestions on developing a product strategy?
I'm struggling to walk through this way too much. Whoa, whoa, whoa, whoa, whoa. That's a lot of questions. All right, let's dive in. Hello, and welcome to another episode of Dear Melissa. Today, we're talking about something that's very near and dear to my heart, which is product transformations. So that's what I've been doing a lot of in the last six to seven years, is helping companies transform from older IT services or companies that didn't even have a software component before, into product management organizations.
And that's taken all shapes and forms. It's been helping growth stage companies stand or scale up a product management organization.
It's been helping lots of large enterprises, like banks or insurance companies, figure out, how do I incorporate a product management organization into our software division? And when I first started out, it was a lot of people going through agile transformations, and then getting a bunch of product owners and calling me and saying, hey, like, what do I do with all these people? Like, what's their job?
How do they prioritize? How can we train them? And I still do a lot of that. But what I'm very excited about now is that you see a lot of the industry shifting to not just training product owners to do basic scrum, but also understanding that product management is a business function. It's not just primarily a tech function.
It's also a business function. And there's still a lot of companies out there learning this. There's still a lot of companies grappling with it. I actually asked one of our guests that will come up in the future about what's a great company that does product management. It's a hard question to answer because I think we're still learning a lot of this.
So I'm excited to tackle these three questions on product transformations today and help you maybe approach some of the challenges that you're having there. So let's dive in. Our first question says, Dear Melissa, I'm about to join a new company where I'll be responsible for creating a new product function.
It's a growing company within the online retail industry and operates in 180 countries, but still adopts a hippo-based culture where the founder and CEO and C-suite dictate outputs to be delivered in a feature-based roadmap. No OKRs, no product strategy. Sad face. What steps should I take during the first months to gain the CEO's trust and create a company culture that embraces an outcome-driven and product-led mindset?
I will report to the CIO, who does understand the importance of a good product management team. All right, this is a great question. So good news is you've got one C-suite leader who understands what you do and is on your side. So great. That's fantastic.
Downside, though, is you've got a founder-CEO issue. Founder-CEOs are awesome, but usually the product is their baby. And when you deal with a founder-CEO rather than a professional-CEO who came and took over the whole business and helped scale it, it's going to be a completely different animal. I think the first thing you need to do is work on your relationships.
Before you start doing anything, before you dive in and pull together your product strategy and get everything going, you need to understand where people are coming from. So here's my first advice. Go talk to the founder and CEO. Ask them, what are the goals for the product management organization? Do you understand what product management is?
Like, don't be accusatory there, but just, you know, ask them. Try to get their understanding for, what do you do? What is your role? How do they see you? And then ask them about their outcomes that they really want to see from this transition and from this building out of a product management team.
What are their goals for the business, too?
Are they trying to grow it internationally? Are they trying to sell it? Like, what's the outcome? Is this supposed to be sustainable? That will help a lot with your product strategy as well. So when you're in this situation where you are the only product person and you're building out that team, a lot of your job is going to be education.
So you need to take a step back, figure out where is everybody in the organization and how do they understand what product management is. The next thing that you need to do is set an example for what good product management actually looks like. And this is where I see a lot of people fail in these situations.
They spend all of their time educating, and while that's still important, that shouldn't be all of your time, because you also need to lead. You need to demonstrate what good product management looks like. So, instead of waiting around for everybody to get together and talk about product strategy, how can you go out, do some of your homework, talk to a bunch of different people, get the lay of the land, and then start putting things together over the next few months to put them in front of the leaders and get their opinions on it?
And you should approach this all very humbly, not like, hey, I just redid everything and created this product strategy, right? It's, hey, part of my job is to do product strategy. I went out, I talked to all of you, I've interviewed our customers, I've done some research on the market, I pulled together our goals that I learned from you, founder, CEO, and this is what I think we should be doing going forward, and this is how it will affect our roadmaps.
All of that stuff really helps, because you're getting ahead, you're anticipating, and you're not waiting for somebody to come and fill in the gaps for you. You're filling in the gaps yourself. So, I think that's really important, is to get ahead of things, start doing work, start showing people what good looks like, and also lean on the CIO.
Make sure they're advocating for you. They should be helping to back you up and explaining things. They should be giving you the lay of the land. They should be helping you understand the dynamics on the team and the executive teams. Those are really important parts of an ally who's helping to stand up a product management transformation as well.
So, I would say, this is gonna be slow, right? Like, this is not gonna be a, hey, we're gonna get everybody to start working this way immediately. It's probably gonna take a while to get this going, but you need to understand what people's goals are and help spin the way that you work in a way that will help them achieve their goals.
So, if they're all out there dictating outputs right now and delivering feature-based roadmaps, how can you maybe just start by putting success metrics on that roadmap? Start talking about what do we wanna achieve? What do you expect will happen when we actually launch these things? What are the challenges we're facing right now?
Like, I assume you weren't brought in to help put a product management practice in place because everything's going perfectly. There's gotta be a reason behind there. And the more that you understand that, the more that you can connect the goals of the company back to the goals of what you're trying to do and tell that story.
I think a lot of pushing these things forward is telling the right story.
So, you gotta make sure that you understand where people are coming from, you get the history, you get the nuances, you use that to your benefit to help explain what you're doing, but take that into account with your context. And then you start demonstrating what good looks like. You start taking ownership of the things that you need to take ownership of, which is the roadmaps and the product strategy.
But you pull people in along the way. So, first things first, though, build that relationship because you will never be able to get what you need done without building strong relationships with your CEOs, with your CIOs, with everybody else in the C-suite first. So, take a couple steps back, just listen, ask some questions, learn about them, learn about their histories, learn about what they think about product management, and just spend some time doing that before you dive in.
And then, once you feel like you're confident in knowing the background, that's when it's time to start demonstrating. All right, moving on to our second question. This says, Dear Melissa, I work for a large insurance company.
We started an agile transformation about three years ago, and now the company is starting a product transformation. I'm one of the new product leaders in this organization. We're being told to streamline our 800 legacy applications and prioritize better so we're more efficient. I read your book, Escaping the Bill Trap, but I'm worried we're not approaching our transformation to be really product-led.
We're still very reactive to the business, our counterparts in the insurance divisions, and I don't think the leaders really get product management like you talk about in the book. How can I ensure we're really approaching this in the right way and make sure we don't end up in the bill trap? All right, this is very near and dear to my heart.
Fantastic question. I have been in this situation, helping companies just like yours, for a very long time. Probably over 10 companies I've been in doing the same exact thing as you. And this is one dirty little secret I've learned about product transformations after a long time. It's important to understand how insurance companies and banks and all of these companies that have these IT divisions actually think about product and software.
You have to remember, this IT division typically was IT in the old days, right? It was a services organization where the business, in your case, your insurance counterparts, would just say, what do I need? I need this. Ship over some requirements and everybody would start building it. And to go on a product transformation, to really do that, we have to shift our mindset from being an IT services organization to being a scalable product organization, to building a portfolio that is reusable and extensible and easier to manage and solves many problems in our organization instead of just one-off problems by request.
And that's a huge mind shift. That is a huge mind shift. And my problem, when I go into a lot of organizations like yours, is that I don't think people really grasp that. I don't know if they really, really understand that at the beginning, that we're shifting our entire way of working and we're shifting the way that IT works.
So here's the first thing that I ask when I go into a product transformation.
I say, all right, if you were to do this transformation, how does it change your business? Not just your software area. How does it change your business? How do you make your internal customers, who I assume you're servicing, which is the insurance counterparts, how do you make them 10 times better than they are now?
How do you make your end-user customers 10 times better than they are now? And a lot of times when we approach product transformations, nobody asks that question because they don't see it as a business transformation. They see it as a, let's streamline our IT services. And if you do that, if you take that approach to just streamline and productize and make it a little bit more efficient on the backend, all you're doing is really cost savings.
You're making your margins a little bit bigger. You're streamlining your backend, making it faster to go to market a little bit, but that's like a 5% change, right? Or, well, it could be a drastic margin difference, but like, that's not really innovative.
And you do hear this when you come out with the product transformations. Like when I talk to C-Suite, when I ask them, why are they doing an agile transformation, digital transformation, whatever, they do mention innovation. They're like, I want to be innovative. I want to do all these things. And I'm like, cool.
And then when you get into the tactics of what you're doing to do that transformation, setting up scrum teams, productizing things, they're not really innovating on their business. They're just kind of streamlining their software organization. And all that's really going to lead to is marginal revenue enhancement and cost savings.
If you really want to transform, right? Digital transformation. Transformation means changing up the way that you do business. It means seeing software as a strategic lever that can help you do things with your business that you've never done before. For example, if you're in the pharmaceutical industry, right?
And you were trying to create better drugs, like how could you use software to help make your drugs or the drug development process rather, so much better. Maybe you can slash costs.
Maybe you can enhance the way that you do clinical trials faster. Maybe you can innovate on the way that you approach the trials and the way that you test things and the way that you get it out the door faster. It's not just about streamlining the current applications and introducing a couple new ones.
It's about figuring out ways that you can harness technology like you've never done before. I think ING Bank is a great example of this. ING is still a bank today. It is not a software company. It is a bank. But they saw software as a strategic lever. So what they did is they created an open platform.
They invited people to develop on it. They develop on it itself. And they've changed their entire strategy to revolve around that open platform. So the way that they further their business is through software, right? They took a whole new approach to the way that they do business. And they opened up so many possibilities for them to be a different bank than other people.
And to me, that's what transformations are about. That's what a product transformation is about. That's what digital transformation is about.
It's about being different than you were before. If you're going to just keep everything the same, just streamline your software a little bit, that's an okay goal, as long as you say, this is what we're getting into. And you don't expect a ton to come out of it, right? You don't expect to be the most innovative company in the world.
But if you were facing disruption, you're worried about these startups coming out, you want to be more innovative, you want to figure out how to really further your business, you've got to create disruptive technology. And in order to do that, you have to think about your transformation in a completely different way. And you have to align your goals towards that.
So that's a long-winded answer for saying, first, can you figure out what the goals are for this transformation? Then you'll really see if your product leaders get it. Because product management is not just about prioritizing and creating roadmaps, it's about connecting your business back to your software and figuring out what levers we can pull to make our business better.
That's the whole point of our role. And too often, we're just seen as people who prioritize backlogs or prioritize requests coming in. And that gives us no agency around product strategy or around business decisions. So we need to get out of that mindset. And if we can start to talk about 10x is such a cliche thing, but I like it because when you throw out that to business leaders, and I've done this before, right?
When you throw out, hey, how do we 10x our internal customers? How do we 10x our customers at the end of the day, the end users? It changes people's perception because they're not just thinking about marginal increases. They start to think about a vision of where product can be a strategic lever. So I would throw that out and see if everybody's on the same page there.
So that's the first part, right? Figure out what kind of transfer, are we really doing a transformation or are we just streamlining? And if you're just streamlining, you're going to have much smaller goals. You are going to focus on cost savings.
You're going to hopefully create a product portfolio that is scalable and reusable and extensible. But you're probably just going to be prioritizing stuff coming in. You'll do a little bit of new stuff on your product strategy, but it won't be drastically different there. And if you are, though, trying to change up your business, that's where you get to create an interesting product strategy that's got horizon one, horizon two, and horizon three type ideas.
You are balancing them. You are trying to figure out how do we evolve and disrupt our own business so that we don't get disrupted by other people. So to me, if you want to really go through a transformation, that's what we should be talking about. So that's what I would say. It's like first figure out where people are coming from.
Then you'll know how to react appropriately towards it. And you can figure out, are we just trying to make things marginally better or are we really transforming? All right, our last question.
Dear Melissa, if a company doesn't have a great product culture yet, how long does it take a strong product manager, junior to intermediate level, to make some positive impact based on your experience? Is a year too long? If there are no big positive changes that are happening to the company as a result of the PM's efforts, should they stick it out?
Or should they move on to try and learn from other great PMs elsewhere? This is also a great question. And I have an answer that you may not like, but I think you're anticipating it from your last part, asking if you should move on. I get this a lot from people who ask me how to change the minds of their executives or how to change the minds of their leaders.
And they're all in a junior to intermediate level. And the answer is it's really, really hard to change the entire culture of an organization from that level. I've been there. I've been in your shoes before trying to do that. And I was not successful. And it wasn't until I came in at leadership levels and worked with leaders that we started to see some success.
And this is a problem.
Like culture in an organization is a direct reflection of how managers and executives approach their culture. It's really reflecting their own values and their own beliefs and their own systems of what they do in their day-to-day jobs. So it takes a lot, right? It takes a lot of top-down leadership to change a culture.
So this is what I'd say also. You have to think about your career path. And I always ask these people who ask me this question, this following question. I'm gonna answer your question with a question. Do you wanna be a change agent or do you wanna be the best product person ever? If you wanna be a change agent, I'd say stick it out and try to figure out how you can influence people, how you can get people to start working in a good product management manner.
But if you wanna be a product person, go somewhere where you're gonna learn from amazing product people. Because being a change agent is a full-time job. I know because that's what I do. I go into organizations, I stir things up. I'm not usually everybody's friend.
You know, I become a threat. And change agents are usually seen as a threat. You're not gonna win a lot of friends, first of all. And it's gonna be an uphill battle where you're just trying to change hearts and minds a lot. And that is your job, right? As a change agent, you're just pushing and pushing and pushing and trying to get people to move in a new direction.
That's in the long haul, right? These transformations that I'm a part of, five to seven years, usually. Five to seven years, that's a long time. So if you wanna see any meaningful impact, you've gotta stay at that place for a long time. And you're gonna be pushing and pushing and pushing. And the other question is, is your company actually receptive to that pushing?
And if they're not, you're not gonna make any headway whatsoever. I do not go into organizations that do not have executive buy-in for this way of working and that don't understand what they're gonna get. And it's because I have been in them. I have taken that job before, and it does not work. You cannot change the organization.
I have come in, I've spent years, I've spent months at these places, and nothing changes because you don't have buy-in, you don't have a full understanding. And that's why when I look for places where I'm gonna be successful in the transformation, I make sure I'm working with the C-suite. I make sure that they know they have to lead the way and demonstrate a good culture, and they have to be completely bought in, 100% ready to do the work.
And if you don't have that, it's really hard to implement change. Now, that doesn't mean that you can't change parts of your organization. I've seen many teams demonstrate successful experiments and laying good product strategy, and the people around them are like, wow, that's awesome, we should be working that way.
And I've seen it catch on like that, where it's a ripple effect. Teams start experimenting, they start learning, it's like, wow, that team's really got it, that's cool. But I've never seen it change an entire organization. I've never seen it do it top to bottom. So ask yourself that.
Do I wanna be the best product person in the world? Or do I wanna be a change agent? Now, if you wanna be the best product person in the world, go find an amazing chief product officer to learn from. Go work with amazing product people. That's how you're gonna learn. Surround yourself with people who are smarter than you, people who are pushing boundaries, companies that are being innovative, or even teams that are being innovative, right?
It doesn't have to be an entire company that's innovative, but if you find somebody to learn from who is just a kick-ass product person, you are gonna go very, very far in your career. That's what I firmly believe. I think you learn from great people, you absorb that, you become great yourself. So that's what I would say.
So you have to make a choice here. Do you wanna be a change agent? Or do you wanna be a product person? If you wanna be a change agent, welcome. It is a hard job. I find it personally rewarding because I just like seeing teams get better. And I also hate this question, honestly. I don't want people to have to keep asking me this.
I want to create a world somewhere where we're all like, oh, no, we're just doing great product management. I can find an organization where I can do it really well because we are all doing it really well. So it's not that I hate your question. I'd hate that we have to ask this question. And that's why I took the change agent path.
But it is not easy. So I think if you wanna be a great product person, we need great product people. So that is a noble path. Don't feel like you have to be a change agent. If you wanna be a great product person, though, find a company that is going to really support that. I tell a lot of CEOs they don't deserve great product people because they're not willing to support that.
And that's the harsh fact. A lot of these companies are gonna lose some amazing product people because they're not willing to support them. But it's okay, because there are a lot of great product leaders out there who would be happy to have you. So make that choice for yourself. Figure out, do I wanna be a change agent or do I wanna be a product person?
And then the path is yours.
All right, thank you so much for your questions. This was a fun week. I like talking about product transformations. It's a passionate topic of mine. I've seen some really good ones. I've seen some ones that are struggling. And know that if you're in a product transformation, it's a long haul. Like I just said, five to seven years.
This is not going to be a, we transform overnight. But if you do need help with your product transformations, we do have a lot of resources on our blog at productslabs.com. We also have an online school called Product Institute. Product Institute is for a lot of product managers who are learning how to be great product managers.
So it's an all online training. And then if you're a chief product officer trying to learn how to do your job, you can check out cpoaccelerator.com. So tune in next week. We're gonna have a lot more product leaders talking about their product transformations, how they think about product strategy coming up.
And I'm excited to dive in more with you.
