Interviewed by Lance Morganelli
For more than a decade people, departments and entire companies (including his own) have asked Paul Young, currently Vice President of Products at Pragmatic Marketing, to deliver successful and continuously improving products. In response, he has given them processes to follow and skilled people to carry them out, which leads to market-responsive products and services. Currently at Pragmatic Marketing, Paul helps companies build product teams by teaching their managers and marketers how to become market-driven.
On Innovation vs. Execution in Product Management
At a high level, can you describe the relationship between innovating new products and executing support for existing items?
Most companies and product teams have to find the right balance between investing in the new and supporting existing products. Unless you work at a startup where you don’t have any existing products yet, there is probably a vocal group of stakeholders, such as customers and sales, that’s interested in fixing real or perceived issues with your existing products. The responsibility of the product team is to represent the needs of the overall market, including those clients you haven’t won yet, and then evaluate all the options for the best investment potential.
I see many teams that feel a gravitational pull towards investing in existing products over new ones because existing products represent real paying customers, who are complaining right now and who will leave if we don’t address their needs. On the other hand, new product concepts represent theoretical business that isn’t buying — at least not yet. Product teams often express exasperation about the lack of innovation and about being disrupted by a newer competitor because of this conundrum.
What’s the most misunderstood part of the relationship between innovation and execution?
What’s most misunderstood is that they are mutually exclusive goals. It is possible to be highly innovative and execute at a high level: it’s a question of focus, resourcing and discipline. Companies that do both well tend to focus on a small number of areas, instead of trying to do everything. That focus allows them to resource innovation and execution, and the discipline that comes with it allows them to say “no” to things that don’t match their strategic direction.
Can you name two companies who you find particularly successful at both innovating and executing, and why?
There are examples of companies doing both across many industries: Tesla drives the electric-car industry forward with range, luxury, style, battery technology and radar-based self-driving technology. At the same time, they produce their vehicles with a level of quality that led Consumer Reports to give the Model S a score of 103 out of 100 on their road test. They literally broke the scale.
Another example that I have personal experience with is Medtronic. They produce devices in the durable medical device space, such as the insulin-pump that I wear for my type 1 diabetes. Due to government regulations, execution and high standards of quality for their existing products is essential for their business. Yet they don’t let those same regulations weigh them down; while you might expect innovation to be slower in the medical device space than in other industries (it is), they consistently push the boundaries of what’s possible—linking information from their devices to your phone so you can view analytics about your health and recently introducing the world’s first artificial pancreas! These are innovations that are literally saving lives, which is no small task.
When structuring product departments to ensure the healthiest balance of innovation and execution, what skills are most important when building your product teams?
The answer depends on knowing the company’s strategy. If you work at an earlier-stage company, you may choose to emphasize innovation more. If you work at an established leader, you may choose to focus on monetizing your core. Understanding your strategy and placement in your market is key.
With that in mind, the next most important aspect is to inventory the skills and assets on your team, deploy them appropriately and address gaps. Some people are more apt to work closely with engineering teams, others feel more comfortable out in the field gathering market data. There are a variety of methods to use for this. I use the Pragmatic Marketing Framework™, which I teach every week. Whatever you choose, the bottom line is that not everyone does everything well, and the job of product team leaders is to align their teams to the needs of their businesses.
Does any particular industry stand out when it comes to best practices and methods for product innovation and execution, for e.g., software? Do any certain fields offer some surprising approaches we all can learn from?
In general, technology-driven organizations, especially those with a software business model, have been fastest to adopt product management as a distinct role and discipline. Because software has a fast cycle time compared to other business models, the half-life of innovation and organization structures allow them to evolve more quickly. Now we’re seeing other industries pick up these ideas and adapt them to their own.
For other industries, we worked with The Internet of Things group at a large company to institute some product team best practices.Also, startups have the shortest half-life of all, so they tend to show the highest tolerance for experimentation in innovation.
Please describe what career experiences helped develop your personal approach to managing product innovation and execution?
Over my career, I’ve learned several lessons about innovating while keeping the business running.
First, I learned that focus is of the utmost importance. One company I worked for was a late-stage startup with its first-generation products in the market for less than 18 months. They were still buggy and we were fixing issues on the fly. Our channel was vocal about how difficult our product was to understand and install. As a result, sales weren’t growing at the rate we wanted.
Unfortunately, our CEO believed that the fix for slow sales was to add functionality and introduce new products. On one hand, I could see his argument. Our product had major gaps that needed to be filled because we had spread our resourcing thin, attempting to bring new things to market while servicing the old. As a result, we failed at everything. I admire leaders with the discipline to say no to shiny objects and focus on doing a few things well.
Second, I learned that listening to the market is important, but only if it’s done right. Another company I worked for decided that our backlog was too big for us to prioritize ourselves, and that we should allow our users to vote their favorite features to the top. On the surface, it makes sense: Let your users do the hard work for you. Unfortunately, what happened was that the most passionate 20 percent of our user base gamed the system and voted their favorite ideas to the top.
When we did a deeper analysis, this noisy 20 percent and their ideas only represented 3 percent of our revenue. What company would allow 3 percent of their revenue base to dictate their priorities?
To sum up what I’ve learned: When generating innovation, patience is a virtue; when executing, sprint without looking back.
For this year’s new startup companies, what is the best advice you can give their product leaders on balancing innovation with execution to ensure they start on the right foot?
Separate your team’s time and skills for researching innovation and driving execution. Make it someone’s job to connect with your market. Ensure that your research is solid and tight first, then hit the throttle and execute like crazy. Don’t hit the throttle until you know that you’re pointing in the right direction because if you aren’t, it will take a lot of money and time to back up and do it over again. Agile development helps, but isn’t a panacea; it is still less expensive to do primary market research in advance than to execute a sprint to build the wrong thing.
On Product Management, 2016 and Beyond
For prospective or beginner product team members, what are some experiential and educational checkpoints they should accomplish to be successful under a “Paul Young Product Team”?
One of my favorite metrics for product team members measures their ability to successfully connect with their market: for example, the number of field visits they perform each quarter. I like to give my teams a quota or goal, typically 10 per quarter. That equates to about one contact with the market per team member per week.
Of course, you also have to document what you learned and share that with the rest of the team. I like this measurement because it is something that individuals can control with their level of effort (unlike traditional metrics like their product’s revenue). Doing this has a positive impact on the business by injecting fresh market data into the decision-making process.
Innovation oftentimes involves personal contemplation, group discussions, and unsubmitted drafts – all of which appear to be wasted time. What can be said to team leaders and product managers to sanction and encourage these activities?
Product team leaders need to understand the need for these types of longer-term payoff activities. Not everything has a ROI that can be measured in days or weeks.
In addition, product team leaders also need to embrace and create what I call a “culture of celebrating failure.” If failure is seen as a bad thing to be avoided, then the team will only take on that which they are certain of succeeding. This leads to stagnation and lack of innovation. You can learn a lot from each attempt and use that information to create change.
If you don’t fail, you don’t learn. If you don’t learn, you can’t change what’s broken, which leads to company failure in the long term.
From your numerous ProductCamp classes, what was the most common question or concern from your attendees? (Add any brief comment about the trend.)
Most of my ProductCamp presentations have explored what makes individuals on a product team the most effective. Pragmatic Marketing does an excellent job training product teams on the hard skills required to land and flourish on a product team, like win/loss analysis, understanding your market, creating a business plan, writing effective requirements and positioning. There is another set of skills that are harder to quantify: the soft-skills that launch individuals to another level. I call them the product management X-factors.
The X-factors include skills like being a great presenter and public speaker, negotiating with executive teams, influencing skills and inspiring others. Most of the questions I get are about how individuals can develop these skills.
Thankfully, through their professional experience and the scars they’ve received over the years, most people recognize that having the data isn’t enough. They also need to tell a story to go with the data. I see people getting better at these areas, and it’s essential if they want to grow into an executive role in the future.
Join Paul on October 20, 2016 at Localytics in Government Center where he will moderate a discussion on the perceived dichotomy between innovation and execution within the discipline of product management. Panelists include Bill Cohn, Product Director at Vantiv and Mike Maltby, Director of Market Strategy at Eagle Investment Systems
This interview is edited and condensed for space constraints.
Feature image from Flickr Commons