[On Demand] Product Management Webinar

[00:00:00] Janna Bastow: Welcome everybody. Welcome back. This is the product expert series of webinars that we run here at ProdPad. And as you know, this is a series of webinars that we run. We’ve been doing the monthly for years and years now. All of the past ones have been recorded and it’s a series of some of them have been presentations.

[00:00:16] Some of them have been firesides, like today’s going to be. And it’s always with the focus on the amazing experts that we bring in, who bring their excellent insights and experience into chat to us. And it’s always with the focus on their content, their learning, their sharing, and our chance to ask questions and dig into the topics.

[00:00:34] And today is going to be recorded. You will get a copy of it. It just takes a few days for the editing gods to get through it. And you’ll get a copy of that probably in the next couple of days. And along with the transcript and all that.

[00:00:46] And once that’s live, you will be able to share that with your colleagues and go back over what we’ve talked about. We’re going to be talking today about the ROI of your product team and why it’s important to be able to measure that. This was a wildly popular topic and we have Matt Lemay back by Popular Demand.

[00:01:06] He was here before chatting to us, but I thought it’d be a great person to talk about this, especially because he’s talking, he’s writing a book on. Impact in product management. We’re going to talk more about that. I’m going to introduce Matt properly shortly, but before we do, I want to dive in and just tell you a little bit about what we’re up to here at ProdPad.

[00:01:24] So ProdPad is a tool that we built ourselves, myself and my co founder, Simon Cast, when we were product managers. ourselves. We needed tools to do our own job and nothing like it existed. We needed something to help us gather up all the ideas and feedback and do analysis on it and figure out which experiments we should run that would help us solve the problems that our businesses were facing and which things we shouldn’t run and how to communicate that to our whole team.

[00:01:48] And so we built ProdPad and started sharing with other people and now thousands of product people around the world use it. And it gives you this control and the transparency into the product management space and helps you make more informed decisions. Makes you feel better about the decisions that you’re making and more informed about why you’re making one decision over the other.

[00:02:08] So it’s completely free to try. We have a free trial that you can jump into. You don’t need a credit card. So just jump in, give it a try, give us your feedback. And we even have a sandbox mode. So sandbox mode is a version of ProdPad, which is preloaded with example data. So a lot of you want to see how Now-Next-Later roadmaps work.

[00:02:27] We’ll What good OKRs look like how you might organize a backlog that’s all in there and you can interact with it. You can play with it. You can move stuff around and see how it might fit within your own processes. And our team is made up of product people. It was founded by two product people.

[00:02:43] We’ve got lots of product people throughout the team. And so give us a try and let us know what you think. We’d love to get your feedback. And as you might imagine, we are constantly pushing new things out the door. We’ve been releasing new code, new changes, new improvements every week for more than a decade now.

[00:03:03] One of my favorite new things is our automations. And what this is really going to do, what it does is helps you smooth out your processes. So it can help you basically set and forget things in your workflow. So if you want something. To happen when you close off feedback, you can do something with that and have that trigger something that does something to your ideas.

[00:03:23] Or if you wanna have something that happens in your roadmap, you can have that trigger something and impact what’s going on in your feedback. So you can link stuff together and it creates a a workflow for you. So give that a try. Would love to see how that works for you and what you make of it as well.

[00:03:39] I’m sure we’re gonna see some creative combinations. Now, enough about us, let’s introduce you to our guest. How do I know Matt? Matt, you and I go back to the heady days of Mind the Product pre COVID I think from maybe some of the leadership events. 

[00:03:56] Matt LeMay: I think it was the leadership event in 2019.

[00:03:59] Janna Bastow: There we go. All right. Good stuff. And so Matt has been a product leader and speaker and just all around good egg and big voice in the product management space. He is a consultant and also an author. He’s written two books, Agile for Everybody and product management in Practice, which is now in its second edition and is writing a third book as well about impact and product management .

[00:04:24] Matt, do you want to? Tell us, what was the name of that one again? 

[00:04:27] Matt LeMay: The name of the book is Impact First Product 

[00:04:30] Janna Bastow: Teams. Perfect. All right. Impact First Product Teams. And you’re going to be able to learn about that on Matt’s LinkedIn and on his blog. So follow him there and learn more about that.

[00:04:41] But he empowers product managers and their teams and their organizations to maximize their impact. On business, critical revenue and growth goals by streamlining the processes, simplifying the strategies and focusing on the work that matters most. So we’re going to be talking about some of that stuff today.

[00:04:58] And how that 

[00:04:58] Matt LeMay: yeah, 

[00:05:00] Janna Bastow: But how does that relate to showing the ROI of your own product team? I also love that Matt is the creator of one of my favorite tactics, the one page, one hour pledge which Basically simplifies it down to not spend tons of time squirreled away in a dark corner writing big long documents before you share them with people.

[00:05:19] Write no more than one hour or one page worth before you take it to other people for feedback. I’ve already simplified. Matt talks much more eloquently about it, but I’m sure we’ll get a chance to have him chat. And Adam, I see you’ve just dropped the link to it. If anybody wants to check that out, www.

[00:05:36] onepageonehour.com. And you can take the pledge there and learn more. Now, Matt, I have bigged you up, but possibly missed things. I’d love you to jump in and say hi for yourself and give us a little bit of background about how you ended up doing what you do. 

[00:05:53] Matt LeMay: No, that was a lovely introduction.

[00:05:55] Thank you so much. I got into the product by accident, as I believed in many of us. My background is in, in writing and in music. Is me a guest from the. Yes, background. I started working as the 1st product manager in New York. At about 3 years there, I went to songs that I was acquired by Google and then started consulting and advising with teams working independently and with some very brilliant people based in the States.

[00:06:26] And that’s still. What pays the bills today, I work with product teams as an inside outside voice to help them see the work they’re doing through new eyes and help challenge some of the assumptions that I think can very easily get baked into product work when folks are working within an organization, which is really just a collective set of assumptions that hopefully becomes a profitable.

[00:06:56] set of assumptions over time. 

[00:06:58] Janna Bastow: Yeah, absolutely. I’d love to hear about what are some of the biggest problems that you’re walking into with some of these companies where they get trapped in not being able to show the ROI of their teams? 

[00:07:09] Matt LeMay: Sure. I think the biggest issue is that up until quite recently, A lot of product organizations didn’t really care to show the ROI of their teams.

[00:07:18] I think a lot of us remember the kind of 2020, 2021 great hiring spree. I was certainly interviewing for some full time consulting roles there. And when people would say, oh, can you hire a hundred product managers for us? And I would say, why on earth would I want to do that? That sounds.

[00:07:36] Like a terrible idea. Why do you need a hundred product managers? And they’d say, Oh, we want to grow our business. And you don’t grow your business certainly by hiring product managers. So I think for a long time, when there was this kind of perception that money, especially venture money was free flowing, Who cares?

[00:07:57] We’ll just hire people dot question mark. Good things will happen. I think that the more interesting issue to me. Is that I have more often been brought in around building things right than I have around building the right things, which is to say I’ve been brought in more often around these much more abstract ambitions to build a best in class product organization or to empower product teams or to do things the right way.

[00:08:25] And I think too often in the product world, that conversation is fundamentally disconnected from the fact that. product management  is fundamentally a business accountable role to be effective product managers. We need to be able to understand the work our team is doing, how that team contributes to the success of our business and what success means for our business overall.

[00:08:49] And I think, frankly, 90 percent of the discourse around what it means to do product management  well has. Operated around that fact rather than looking at that fact square on and we are now dealing with the ramifications of a kind of Discourse around our work that I think has left too many product managers, teams, and executives disconnected from why we have product managers and teams in the first place.

[00:09:20] Janna Bastow: Yeah, absolutely. So my follow up question is, where are they now? Like these companies who hired 200 product people. 

[00:09:29] Matt LeMay: They’ve laid off 175 of them by now. I think that’s one of the things I keep coming back to. I feel four or five years ago, product managers could, I don’t want to say defensively, but did say, how dare you ask me to quantify the ROI of my work?

[00:09:48] That’s not what, that’s not how you do product management the right way. Product teams can never be accountable for revenue goals. I read about it on LinkedIn, but at the end of the day, if your team gets laid off, the CFO of your company isn’t going to wait. I don’t understand why this team exists or what they’re doing for the business, but somebody on LinkedIn said that product teams shouldn’t be accountable to revenue goals.

[00:10:09] So there’s nothing we can do. Let’s keep this team around forever. The reality is whether or not we want to acknowledge it, we are accountable for whether or not our team is contributing to the success of our business because somebody is going to look at our team. And if They don’t understand why they need us.

[00:10:29] We will be the ones who bear the brunt of that. And I think there’s a good argument to be made that is unjust and unfair. That, when teams get laid off, it should be the people who set the strategy for those teams who bear the consequences of that. But that is not how it works. So my hypothesis going into this book and many of these conversations is that you as a member of a product team are in a much stronger and more resilient position.

[00:10:57] Developing your own strong point of view about how your work contributes to the success of the business, as opposed to waiting for somebody else to ask you to retroactively justify your existence, which puts you in a much more vulnerable and less resilient position. 

[00:11:14] Janna Bastow: So you have the opportunity to help write the script as to what impact you think you’re going to be able to bring to the business and then go deliver on that because you’ve already set the stage saying here’s what I think we can do based on what we’ve learned.

[00:11:30] Matt LeMay: Go deliver on it or go say, look, we’re struggling to deliver on it. For these reasons, and here is what we need to do as a result. But again, that argument is a much better argument when it is rooted in a specific sense of business impact, as opposed to when you go and say, we need more engineers why?

[00:11:48] Cause we don’t have enough engineers and this other team got more engineers and that’s not fair. It’s these aren’t real things. Nobody cares. If you can ground your conversation in the. Impact your team seeks to have on success for the business, which also necessitates understanding how the business defines success, which is often much trickier than it might seem.

[00:12:13] Then you’re just in a much stronger position to have these conversations overall. 

[00:12:17] Janna Bastow: Yeah. Yeah. All right, I hear you there, but okay, maybe a bit of a whiny question, but like product people we don’t necessarily have direct influence over things like the revenue or over churn figures or over code delivery or over things like that, right?

[00:12:35] How are we held accountable for everyone else’s job? 

[00:12:42] Matt LeMay: I think spiritually and psychologically. The point I hope to get across the most directly. Is that we are never fully in control of whether or not our teams and our companies succeed. I think that’s part of why so much of the emphasis in the product world has rightly been on discovery, right?

[00:13:03] Because if we set our goals at the proper altitude at a market Altitude at a customer altitude at a business model altitude, then we cannot simply ship something that delivers the success. We want to. We are dependent upon the behaviors of other people, whether those are our users or our customers, or however, our business model operates.

[00:13:26] So I think, honestly. A whole lot of how product teams operate exists to try to grab back on to that delusion of control by cascading our goals, by refusing to look at these things on the order of a business model, by saying we can only scope our ambition to that, which we can control. And that again, is an illusion.

[00:13:51] That’s not how business works. And I think one of the most dangerous things I have seen, Organizations, not just product organizations, but entire companies do is cascade their goals down to the level where things. Feel safe and controllable only to wind up in a position where every team can achieve its ostensible goals and the company can still fail.

[00:14:15] I think that very anxiety you’re describing that sense of we can’t do this. If we do this, we need to work. With the ops team. And we need to work with the marketers. If we’re going to get this to be successful, we need to work with this other team, and then we need to hope that our customers, yes, that is exactly right.

[00:14:30] That sense that you likely cannot achieve impact level ambition on your own. Within the full control and purview of your team is exactly why it is so important that we set our goals at that business impact level and that we resist the urge to cascade them down to the point where we have sacrificed impact for the illusion of control.

[00:14:54] Janna Bastow: Absolutely. And this sort of speaks to what I’ve seen in the evolution of product space over the last, 10, 15 years, starting off with seeing how mine, the product started and what the conversations were back then when product managers were very much around. How detailed do I go on my specs and how do I prioritize a backlog for my developers to.

[00:15:16] Do this and should I use this wireframing tool or this wireframing tool? And it was very much down in the dirt. And the product manager’s job felt very much like it was to write specs and keep the developers busy. And if that’s what you’re being measured by, then cool. We were all doing a great job.

[00:15:30] And I stand guilty as all the other product managers of our cohort for doing that, right? product management has grown up and over the years we’ve seen more and more of this step towards product people becoming accountable and realizing, oh wait, so our jobs are much less about that and more about stakeholder management and getting people on board with understanding what the shared goals are and working out how to do that.

[00:15:54] Meet those goals and, working at the business level and not just pleasing customers. There’s more to our jobs than making a delightful user interaction at the at the interface level. 

[00:16:06] Matt LeMay: Yeah, exactly that. And I think that, that, that question of how do we keep the developers busy when you are thinking in an ROI mindset or in an impact mindset.

[00:16:21] Developers are expensive. Like product teams are expensive. Yeah, 

[00:16:28] Janna Bastow: yeah. 

[00:16:28] 300 product people are very expensive. 

[00:16:30] Matt LeMay: Very expensive. There’s a question, so in the book I’m writing, each chapter has a powerful question that I find that, there, there’s not a lot of frameworks and diagrams and operating models in the book as there tend not to be in my books.

[00:16:47] But there is one powerful question in each book and in, in the first chapter, which is about. The hidden cost of low impact teams. There’s a question that I have asked teams before, which is if you were running this company, would you fund this team? And I really like asking that question because it forces folks who might have been thinking that, what is the next defensible thing for the engineers to build mindset, think like a business.

[00:17:14] To say, okay, if you were ultimately accountable for the top line profitability of this business, would you fund this team? And, I asked that question a few times with teams at larger organizations that actually wound up effectively disbanding themselves and reshuffling their own resources saying, look, the way this team is set up, where there’s no way we’re going to have enough impact.

[00:17:36] We’ve got it. Six or seven really talented people on this team are working on something, which is never going to justify the cost of these six or seven really talented people. Let’s either shift the purview of the team or just find something that another team is doing that needs our resources more and see if we can align ourselves to what they’re doing.

[00:17:56] I think, again, you are always better off asking those really tricky, challenging questions within the team first, as opposed to having somebody else ask those questions without you present to answer them. 

[00:18:08] Janna Bastow: Yeah, I love that question so much, because it’s empowering it, right? It gives the people on the team the ability to answer the questions that they actually probably know themselves.

[00:18:19] But often don’t feel like they can speak up, something that I’ve often said is, and I only realized this as you move up in your career is you assume when you’re at a certain level that everybody above you has figured it out and they know what they’re doing. And so if they have put together your team and told you to do a thing, you’re doing the right thing and your team is the right team to do it.

[00:18:36] And as you move up at a layer and move up another layer, you realize, wait, hold on. You’re not really sure how to put together this team. And maybe you need to go ask the people in the team how to put together the team. And maybe if you were in that team way back then, you could have called it and gone, there was no way this team was ever going to make it.

[00:18:52] And so if you’re able to get that team to provide that buy-in or call BS, if it’s not going to work, then you’re going to be able to get better decisions made as a company. I like to think of a company I’m so glad you 

[00:19:05] Matt LeMay: brought that up. 

[00:19:05] Janna Bastow: I like to think of a company as a collection of knowledgeable individuals, right?

[00:19:10] Knowledge workers, right? And if the company is not using their knowledge, then it’s losing half of its value, right? And part of the beauty of it is that if you get everybody involved to think about what the company goals are and get them to do it. working towards it, then you will be able to get more value out of it, as opposed to having squeeze points, bottlenecks, higher up in the rungs who are making all the decisions.

[00:19:32] Matt LeMay: I think that’s exactly right. And that’s part of why I think I’ve become so adamant that every product team should have a view all the way from the day to day decisions they make to the actual business model, to the success of the organization, to those impact level goals. In Josh Seiden’s book, Outcomes over output, which is a great book, he puts impact as something, which is 1 step beyond outcomes.

[00:19:56] So outcomes are customer behaviors and impact is what that ultimately means for the business. And I find that a really helpful distinction. And I think in a lot of cases, we assume that. It’s the role of executives or product leaders to set the connection between outcomes and impact. But as you said, that doesn’t always mean that’s been done well, and it also doesn’t mean that can’t change.

[00:20:21] I think for a long time. I work with a lot of product teams who are able to say, look, yeah, the strategy we were handed might be garbage, but it’s the strategy we were handed or look, we’re influencing this product outcome, but we don’t really think it’s going to, we have no idea what that’s going to mean for the business.

[00:20:38] And again, I think that puts you in a very vulnerable position and that ability to look at this and say. Yes, and here’s why we’re focused on an impact. And here’s how we’re going to make sure we’re delivering for the business is so important. And I think again what a lot of the discourse around empowered teams has sought to do, which is to put people closest to the work and a position to influence every layer of that work strategically, not just those more downstream decisions.

[00:21:12] Janna Bastow: Yeah, absolutely. And so you talked about this low impact work and you talked about the low impact death spiral as well. 

[00:21:18] Matt LeMay: Yes. 

[00:21:19] Janna Bastow: Can you tell us more about that? 

[00:21:21] Matt LeMay: Yeah. So the low impact death spiral is something I have seen at every large software company. And it goes a little bit, something like this.

[00:21:31] Teams do low impact work because it is the easiest work to do. Low impact work tends to require the least coordination. It tends to invite the least scrutiny from executives. It’s very easy for a team to say, look, we’re going to build this little feature in the corner of the app, or we’re going to optimize this very little part of a bigger part of the app because it’s just easier to do.

[00:21:56] So each of those new features or new little optimizations adds to the complexity of the product. You wind up with a product, which as with most modern products put out by big companies, Feels more like a grab bag of features than it does like an actual end to end experience. As a result of that, you wind up with a higher cost of coordination across teams, right?

[00:22:20] The more complicated the product is, the more dependencies there are, the more challenges there are around portfolio management. And you wind up with companies saying Ah, it’s too difficult to coordinate. We need to add more layers. We need to have a session to cascade our OKRs. We need to add another program management layer, another operational layer.

[00:22:40] That in turn actually makes things worse because then you wind up with even more incentive to do low impact work. Suddenly, if you need to do high impact work. You need to coordinate with the program management people and you need to make sure that your OKRs are aligned with. So it just incentivizes teams to work on low impact work.

[00:23:02] And the trouble here is that most of the ways that organizations seek to fix this actually make it worse. Adding more of those coordination layers, adding more and more of those intermediate steps in order to coordinate work, adding more and more layers of goals that are disconnected from those impact level goals actually exacerbates the problem and actually further incentivizes teams to do low impact work.

[00:23:32] So that spiral. Is something I see so many organizations in, and it’s why so much of the consulting and advising work I’ve been doing has been, I’d say, surprisingly subtractive. Think people expect me to come in and say, here’s some new processes we’re going to do. And here’s some news and mostly what I will end up doing is saying, okay, you’ve got four levels of OKR. Do your L4s add up to your L1s? If the answer is no, or I don’t know, we get rid of them. Do your L3s add up to your L1s? If not, we get rid of them. How many teams do you have? What are they working on? What does success look like for them? You have a 500 page deck that answers that?

[00:24:09] We throw that in the garbage. We really, again, So much of that busy work exists to give us that illusion of control and to make us feel safe. Oh, we don’t need to, we’re not dependent on other team’s work for us to succeed, but you are. You absolutely are dependent on the other team’s work. You absolutely are dependent on the behaviors of users and customers that you cannot directly control.

[00:24:37] That is the reality of doing this work. 

[00:24:41] Janna Bastow: Yeah, absolutely. And that type of work always feels like the good stuff is being done, right? That low impact work is the stuff that’s easy to get out and ship. So shipping feels good. 

[00:24:50] Matt LeMay: Celebrate it, right? That’s the other thing, is that it’s the stuff where it’s like, Yay, we shipped a feature!

[00:24:57] It’s what did the, what was the impact of the feature? Let us never speak of it again. We shipped a feature. There’s also like the whole realm of kind of business theater, like the actual work of setting and cascading OKRs, which not only is harmful in that it leaves us with too many, too downstream goals, but it also takes up so much time.

[00:25:18] Like I’ve seen entire organizations grind to a halt because everybody is going to spend the next quarter and like making up fake goals for the next year that they will never use again. 

[00:25:29] Janna Bastow: But they’re doing OKRs, and the good companies do OKRs, so they must be doing the good things. And they’re shipping.

[00:25:35] So what could possibly go wrong? 

[00:25:37] Matt LeMay: Or they’re not shipping. Or they halt shipping. That’s my favorite. We’re not shipping anything for the next quarter because it’s goal setting season. It’s OKR season. And I’m like, this is crazy. This makes no sense. This is madness. Like we’re going to spend a quarter coming up with gold.

[00:25:53] What about last year’s goals? Do we ever look at those again? Do we ever retrospect on whether or not we achieve those things? Of course not, because we all feel like important strategic business people setting made up goals for the next year and putting a halt to the work that is actually going to potentially help us deliver against those goals.

[00:26:11] Because the reality is, Those things are completely disconnected from each other. And then we wonder why companies wind up having these massive cycles of layoffs when there’s, again, no real sense of the connection between the day to day work that teams are doing and the existential success of the business.

[00:26:31] Janna Bastow: Yeah, and I want to check your experience with this compared to mine. When you go into these companies do the individuals in the company get it, do they know what’s going wrong or are they also just. Going along going, yeah, this is fine. We’re going to be absolutely fine. I 

[00:26:47] Matt LeMay: I mean, honestly, I think it’s more of the latter.

[00:26:49] And I think part of the challenge is again, candidly speaking, it’s not the executives who would be bringing me in at the level where I like to be brought in who will lose their jobs when these things don’t work. It is the individual product teams who are often, I remember when Spotify laid off a whole bunch of its workforce.

[00:27:11] And then there was a statement from the CEO saying, We have too many people doing the work around the work. And somebody pointed out who made that decision? Who decided to have people doing work around the work? Why isn’t it the person who set those ambitions, who set those goals, who is now bearing the brunt of this, as opposed to the people who have done the work that you told them to do?

[00:27:37] And I think this is one of the fundamental disconnects and challenges of politics and modern organizations is that the people making the bad decisions are also often the people who usually have the most air cover and the most opportunity to say, there has been a shift in macroeconomic conditions. So now we must lay off all the people we chose to hire as opposed to saying.

[00:28:01] Wow, we really got this wrong. What about the fundamental structure of our business? What about our decisions needs to change? So I think one of the problems here is that the folks feeling this the most urgently are not necessarily the folks who have the most leverage within an organization to bring in folks like myself.

[00:28:22] Or to shift accountability or to change goals, which again is why I think it is incumbent upon folks at the product team level to have a point of view on this, because that point of view is going to be something that can prove very valuable, even in an organization. Where the folks who are ostensibly tasked with having that point of view don’t have that point of view or have actively avoided having that 

[00:28:53] Janna Bastow: point of view.

[00:28:53] Amen. Amen. Now, you also say you call this a low impact death spiral. Does it always lead to death or is there any way out of it? 

[00:29:04] Matt LeMay: No, the reality is most of the companies in that spiral have just enough, enough market share and enough revenue coming in that it’s a slow death spiral, right?

[00:29:15] Janna Bastow: Some comfort there. 

[00:29:17] Matt LeMay: Yeah. I think the reality is the smaller version of the death spiral tends to affect smaller companies. Once you get to massive publicly traded companies, things move a lot 

[00:29:28] Janna Bastow: slower. And they’ve got a huge base to burn down through, really. Exactly. They’ve 

[00:29:33] Matt LeMay: got a huge base to burn through.

[00:29:37] But I think you see it and you feel it in products that feel dead and in products that feel like they are on a decline. And I think you see it and feel it when you work with product organizations that frankly would be better suited by not doing anything. You know, it’s a real thing working with product organizations where it’s 50 product teams shipping new work.

[00:30:02] If 48 of those stopped working. We’d probably be exactly where we are which invites some really challenging conversations about, Hey, do we need 50 product teams? B, what, what does success look like for this business? C, how is the market shifting? I think I want to be clear that I’m not exactly conflating success with revenue, right?

[00:30:26] Because in a big business, sometimes success for a team means exploring new avenues of revenue. Sometimes success means getting good PR. Sometimes success, for a small company means just getting enough users on board that we can raise that next round of funding. Yeah, success is not 100 percent equated to revenue, but I think having a clear sense of what your team’s success means to the business, like what the business needs to see from your team to look at it and say, this team is delivering value for us.

[00:31:02] Is. Really important. And a lot of games just do not know that. 

[00:31:07] Janna Bastow: Can I tell you one of the most sobering things I ever heard? At a product talk thing. Talking to somebody who was working at one of the larger banks or one of the longer standing banks, this thing had been around for nearly 200 years and it just survived that financial crisis, was bailed out with the rest of them, they survived by the skin of their teeth.

[00:31:26] And he said every company will one day go out of business. It’s just a matter of when. Yeah. Every company that ever does or will exist will one day go out of business. Just a matter of when. And I thought about that. I was like, that’s a good point. Even multi generational companies, and you can think about this business that he was working at, this big bank that had been there.

[00:31:45] His grandfather’s grandfather could have worked there, but can you imagine his grandchild’s grandchild? working there? Or is this like the end of this big old bank? Is this how we’re seeing some of these giant companies? Are they going to run out of steam in the next couple generations? And while they do have lots and lots of steam behind them, unless they are able to show the value and create, continue to create value in new ways to fit the world around them, they aren’t going to make it for the next generation and the next generation.

[00:32:19] Matt LeMay: Yeah, I think that’s absolutely true. And I think one thing I keep coming back to product management is a job. It’s a job like any other. We’re labor. We’re not capital. We are, unless you have. A stake in the business that you are building, which, most of us, especially most of us working for big companies don’t really but hands up 

[00:32:40] Janna Bastow: who thinks it’s the best job.

[00:32:44] All right. Sorry. Carry on. 

[00:32:46] Matt LeMay: I think for the point Stephen’s making here we, I personally don’t care that much what happens to pretty much any business. I don’t really care that much. If a bank goes out of business, I’m like, okay, there’s a different bank.

[00:32:58] I think we have a tendency in the product world to be very precious about products and companies sometimes to be like, oh, these companies have these products, but this is a job. And I say that in a way that I hope is freeing for people. Where I actually found that when I over-ego identified with my company and my role, when I was like, I have to make things that people love, I’ve got to fight the business to do what’s right.

[00:33:24] Then, um, it, it got challenging for me. I started to get really wrapped up in this and I found as unfortunately many of us find that when the macroeconomic conditions do shift that loyalty can be a bit one-sided that all those nights I stayed up saying my success is the success of this business and I need to do everything to make sure it wins.

[00:33:47] That loyalty again is not necessarily reciprocal. Yeah, and I think that once we say look, our job is to help this business succeed. There’s actually something very liberating about that because we can do that job. We cannot get into these again. Very philosophical. What is the right way?

[00:34:05] The wrong way? It’s my job. I am a business accountable generalist working on a team of specialists to help make sure that the work we do delivers success for the business. Yeah. There’s a whole world of ethical concerns that I think are really important to bring up and to navigate and to understand there.

[00:34:20] But you can have those conversations in the open when you recognize that your job is not to love your job. Your job is not to ego identify with your business. Your job is not to build things that people love no matter what, even if that means fighting your business tooth and nail. Your job is to have a job.

[00:34:38] You work for a company. And again, I think once, once you recognize that, You are both better equipped to succeed in the service of that company and hopefully better equipped to have some healthy work life boundaries and just get on with the other stuff you want to do. 

[00:34:53] Janna Bastow: Yeah, I hear that. Thanks for sharing that.

[00:34:55] So there’s a question here from, oh, it’s anonymous. Somebody asking about the ROI for product teamwork and is that distinguishing, distinguishable from ROI for, from the products or features that the team? What do you think about that distinction? 

[00:35:10] Matt LeMay: I, for me, I always start at the team level because I find that when you start at the team level, the team is more likely to explore things that might not be features and that they might not have considered building.

[00:35:23] For example, I think there’s a whole set of things like, Copy and messaging changes, like certain operational improvements, like subtractions from the product experience that teams that are in a more feature oriented mindset are less likely to take on. Whereas if you tell a team. Look, you are accountable for delivering these results.

[00:35:46] We don’t really care how you do it, but this is what success looks like for the team. That team is more likely to pursue those things. So for example, when I worked at songs, which was a very kind of cool up and coming 2010s music startup. We, there were a lot of people who were music people who wanted to build cool things.

[00:36:05] And eventually we shifted the goals at the team level to the product team level to be very specific. So we were like, you’re responsible for increasing the average revenue per user from this to this. So we looked at our backlog of cool things we thought about building.

[00:36:26] And 1 person on the team said, I was talking to somebody on the. Ad ops side, and they said that there was a new advertising network we connect to, which would basically get us all the way there. And we all grudgingly looked at each other, because that’s not the kind of thing we wanted to be working on.

[00:36:42] We were like a cool feature team, but it turned out the thing that was going to get us to our goals the most quickly was to work in close partnership with the ad operations team. Team to connect to a new back end advertising network. So I think of that example a lot because I think that once you think about goals and ROI at the team level, it actually frees you up to pursue more things that might not feel like products or features, but that are actually going to help.

[00:37:15] Get you there. Again, I think ultimately when you look at ROI across all of these levels at the team level and at the what are we doing level, but when we start at the team level, that frees us up to pursue more different things we might do in order to achieve those goals. Even if they’re not really fun or exciting.

[00:37:34] Janna Bastow: Yeah, I like that’s a good insight. Thank you. And so how do you start balancing out the showing the ROI of long term stuff that’s important for the business versus short term wins that the business needs for whatever reason, whether it’s for client commitments or pet projects or small gains that the product needs or whatever it is.

[00:37:54] Matt LeMay: So I’m going to, I’m going to start by answering that question a bit, and a bit of a roundabout, but hopefully practically helpful way. A lot of product managers and teams get really hung up on the perfect way to estimate ROI, when in fact the most important thing to do is to test it. Do something to estimate ROI.

[00:38:13] We cannot perfectly predict ROI. If we could perfectly predict ROI, every business would be infinitely successful. It’s not really possible to do that, it’s called estimating impact. For a reason, you estimate, you look at a rough range of what we think this could do.

[00:38:30] Here are our assumptions. Here’s how we’re moving forward. So this question of balancing long term and short term ROI is a really important question. But having some sense of the ROI is a really good place to start. I think part of the key here is, again, starting with what the business needs to be successful.

[00:38:49] A lot of that comes back to your business model and to who you are ultimately accountable to. If there are quarterly shareholder expectations that need to be met, then Yeah, you might need to be really focused on quarterly revenue. If the business has a longer term view, you might come to the business saying look, we are working on something which we believe is going to contribute this much in three years, but is not going to have any impact on quarterly revenue, both of those things.

[00:39:21] Can be valid, but what’s important is that you have that point of view on the work you’re doing so that you can talk to your manager, you can talk to the CFO, you can talk to whoever you need to talk to at the scale of your business and say, look, this is the impact we are seeking to have. It will impact this.

[00:39:41] It will not impact that. It will not impact that in this are we cool? I deal with this a lot. I work with product teams that are like. I worked with a team once where they were told they were a team working on an existing product that was very revenue positive at a company where the strategy seemed very focused on the new product.

[00:40:07] And they were freaked out about this because they said, look, the strategy we’ve been given is all about new things. We’re not working on a new thing. We’re working on an old thing, but it actually contributes massive revenue to the business. What do we do? I said, first of all, like, estimate how much of that revenue is coming from your product to the best of your ability, estimate how much the work you’re doing is going to affect or protect that revenue.

[00:40:34] And then say, right now, we are not focused on building new things. We know how important that is to the strategy, but our work will ensure the survival and success of the business by continuing to contribute this much revenue in this way there’s never, I think, especially in bigger, more complex organizations, um, as Robert said, here, there’s no perfect.

[00:40:58] Framework, and there’s also no perfect answer. That’s going to satisfy everybody, right? There’s no, like we are going to deliver against all of the company’s strategic initiatives and also create revenue and growth product work as trade offs, right? So I think for you as a product manager and a product team to be able to say, yes, we are delivering against this.

[00:41:20] No, we are not delivering against what is good product work and good. Estimation and ROI estimation, it’s like. 

[00:41:31] Janna Bastow: Excellent. I love that. So from a practical standpoint, are you giving us permission to say when we’re estimating to, come up with some basic estimations to just start from a blank page and say, Hey, you know what, I think it’s going to hit this many people and this many, based on what we did last time, it could be this many, but this part could be wrong, but I’ve come up with this number.

[00:41:52] Okay. And it could be wrong, but really, it’s fine. I’m going to put it out there. Because one of the things I find, I struggle with this as well, and I bet other people do too, is when you’re faced with this blank page of what’s the value? What are you going to do with this? And you feel like you can’t say anything because you don’t fully know and you’re making something up.

[00:42:11] There’s always something that’s the unknown. I don’t know. You got to give us permission to be like, hey, Here’s where you can start, picking apart, where you might estimate and how you might check it and who you might check it with and that sort of thing. 

[00:42:25] Matt LeMay: Exactly. I think in the book, there’s a series of questions that are good places to start, which is exactly where you started, right?

[00:42:30] How many people are going to see this? What is the value of the interactions with those people? What is the likelihood we think that those people will do those things? There’s a bunch of questions that we can ask. In a lot of cases, I find that people get stuck. Furthermore, some of these kinds of big existential product questions say we’re going to improve the shopping cart experience, but how much is that likely to change conversions?

[00:42:52] And with a lot of those big questions you can Google it, right? Yeah. A lot of the big wicked questions. You can look up what’s a good conversion rate? How much does an improved UX affect conversion rate? Yeah. There’s a lot of stuff you can look up and again, it’s not perfect, but you can start to get a sense from looking it up of like, all right, there’s a specific.

[00:43:15] tactic I recommend in the book, which is just looking at orders of magnitude, which is going to Tom’s point here, right? So I worked with a comp with a team while I was responsible for just, 

[00:43:25] Janna Bastow: just to give some context. Tom said in the chat, if you need to know the second decimal place, it’s probably not a good idea anyway.

[00:43:32] Matt LeMay: Yeah. You can get into these debates if it’s going to increase by 5 percent or 6%, but I find it really helpful if you’re stuck and you’re not sure where to start, look at 10, a hundred or a thousand, right? Just look in orders of magnitude. So I worked with a team at an HR management platform that was responsible for building the new version of this platform and taking old users and bringing them over to the new version of the platform.

[00:43:57] And the first question I asked them was like how many users by the end of the quarter? And they were like we don’t know we, and I’m like, Oh no wonder this team is struggling. If you don’t know the decisions you’d make are really different. If you’re building to say, by the end of the quarter, we’ve got one user versus 10 users versus a hundred versus a thousand versus 10, 000, this is a platform with about 50, 000 users.

[00:44:22] So I got the product team together and I was like, look, this is a big, expensive product team. What’s the number we need to get to where we’re going to feel good about it. And one of the engineers on the team said, gosh, if we could get a thousand users on by the end of the quarter, I would really feel like we did what we were set up to do.

[00:44:41] Another engineer said, yeah, but if we do that, we’re going to have to say no to everything else that people bring us. And that was this kind of moment of aha, this might be perfect. So we literally just got the CPO on a call and we said, we are committing to a thousand users. And the CPO said, absolutely.

[00:44:57] You have my full support. If anyone comes to you with other stuff to do, that’s not on target, please send them, feel free to send them to me and tell them that I said, you can’t do it. And what was interesting was that so many of the kinds of important discovery questions we had struggled to prioritize.

[00:45:11] Like now we had to answer those, right? Who are those thousand users? What matters to them? Where do we start? How do we? What’s the segment that we go after a lot of these things that have been more academic debates about how to do product management became really urgent conversations. Once we knew what that specific number was so again, I think if you’re stuck, if you don’t know where to start with orders of magnitude and just be like, what is, what would the difference be and what here feels right.

[00:45:37] And again, that question of what feels right is not a. Bad question to ask. It doesn’t mean that we’re not doing our jobs. If we’re close to the work, which hopefully we all are, we should have enough information from doing that connective work to have a sense of yeah, this is generally where we should be aiming.

[00:45:55] Janna Bastow: Yeah, absolutely. And I think there’s a lesson in there as well. The fact that the first person to speak up about it saying this number, is it a thousand? If that’d feel good, that came from a developer. I think for too long products people have sat in their own corners, trying to figure this stuff out.

[00:46:10] And it feels like they’re making it up when in fact, the information, the insights might be coming from the people around you back to what we’re saying in the beginning. It’s more about pulling in those insights and doing the stakeholder collaboration to pull in what your colleagues are thinking, what your teammates are thinking.

[00:46:26] So you can deliver as a team. 

[00:46:28] Matt LeMay: Exactly. 

[00:46:30] Janna Bastow: Yeah. Very good. All right. So when you’re actually coming up with the ROI, who does it need to be communicated with? Is this something that you’re locking in and committing to a particular number? What happens when you say we’re going to hit a thousand users by the end of the quarter, but you come in lower, you come in, way lower or something like that.

[00:46:51] What’s the, what does that mean for a product team? 

[00:46:53] Matt LeMay: Yeah. That’s a great question. And I think, part of the reason that product teams are reluctant to seek accountability around things outside of their control is this understandable fear that if something, if they don’t achieve something outside of their control, they will be held to account unfairly.

[00:47:10] Again, I think the reality of working for a business is that we are ultimately. Subject to forces outside of our control. That’s the reality of working for any company. But again, I think that the point of starting with impact is to help focus and clarify your decision making. If you miss the target, you retrospect and figure out why you missed the target.

[00:47:34] That’s the same. That’s always been the answer, right? Yeah. If you miss the target, you retrospect, figure out why you missed the target. It’s a learning 

[00:47:41] Janna Bastow: opportunity. Yeah. It’s a learning 

[00:47:42] Matt LeMay: opportunity. 

[00:47:43] Janna Bastow: And also whether or not you hit a thousand, you should be able to tell us whether you’re directionally heading towards a thousand, are you at 650?

[00:47:49] Next week or next month, it’ll be at 750 and you’re on your way up. Or is it like, ah, we got 65 users and maybe we don’t do this thing, this sort of thing anymore, right? That’s the learning. Exactly. 

[00:48:01] Matt LeMay: But I think the most important piece is that you build differently for a thousand than you do for 10, right?

[00:48:05] Yeah, it affects your decision making. And that’s the, that’s why in this book, it’s called impact first product teams is that if you know what your impact level ambition is, it affects every layer of decision making beyond that. And if you keep your day to day work connected to back, if you skip through all those layers and say, all right, Do we still feel this connection to the impact level work that we’re having?

[00:48:29] It gives us a little bit more room to adjust course to say, like, we’ve gotten a little off track. We’re building this. As if we’re building for 50, as if we’re building for 10. 

[00:48:41] Janna Bastow: And once you’ve clarified that it’s, a thousand users that you want, or it’s lots of users that you want, right?

[00:48:46] Regardless of whether it’s a thousand users, it’s probably as many users as you can handle . If you’re building a SaaS business or pretty much any other type of business, you want more users. But what you’re really doing is you’re setting clarification as to what sort of magnitude and what.

[00:49:01] Aim you’re looking for. And that helps other people open up their minds as to where they might help hit that goal. Reminds me of a tactic that, Oh, I want to say Airbnb or Stripe or one of those. And they do this for their marketing. And they basically say, we only green light projects in marketing that can reasonably say that they’re going to bring in a large swathe.

[00:49:22] And it would be like, what sort of things could we do that’s going to bring in a swathe of users that looks like this, right? If it’s going to do this many. The maximum number of people it could possibly bring in is this, we don’t touch it. Unless the maximum number of people it could bring in is this, now we’re talking.

[00:49:37] Matt LeMay: I think that’s so key, right? I worked with a team at a fintech company that was responsible for taking single product users and converting them to multi product users. We were building into a company level revenue goal. And it was really, it was a great process. We sat down and we said, all what is the customer lifetime value of single product users?

[00:49:52] What is the customer lifetime value of multi product users? How many do we need to convert from single to multi product users to feel that an increase in CLTV is a significant contribution to the company’s revenue goals? We got a number. Yeah. And, the product manager on one of these teams came back to me a while ago and said Oh, but like we have three things we might work on.

[00:50:11] I’m not sure. Like we’ve done this discovery on this one. I’m like, all right, great. Each of these what’s the most impact we can reasonably expect? How many users on the first one was like we’re going to get a thousand. Let’s say that our goal is 10, 000. We’re going to get, we’re going to get a thousand.

[00:50:23] Like it’s, we think we could really do this. Like, all right, great. The second one man, maximum 50. And I’m like, great. We cross out the second one and never speak of it again. The third one we could get the 10, 000 right away, but it would be really hard. It requires a lot of coordination. And I like this story because it doesn’t end with a clear answer, right?

[00:50:39] It’s not obvious we prioritize C. It’s yeah we wind up with one that’s more likely to get us a 10th of the way there. And one that’s less likely to get us all the way there. And figuring out those two things is the art and science of product management, right? But out of three options, we were able to just never talk about one again.

[00:51:00] That actually means the team is more likely to achieve one or both of those other things, right? Because we’re not wasting our time scoping out and talking about something, which does not have a chance in hell of ever actually helping us get to our goals. And again, When we talk about low impact work, I think a lot of teams are working on things which do not have a chance in hell of actually delivering any kind of meaningful return on the investment the business has made in the team itself.

[00:51:30] Janna Bastow: Absolutely. So maybe we’ve got time for a couple quick fire ones and we had another plus one on that about who owns ROI. When, and KPI is when that KPI could be attributed to different functions, like in a funnel conversion with growth reporting versus product initiatives. 

[00:51:48] Matt LeMay: That’s such a good one.

[00:51:49] And I think there’s no easy question and no easy answer to that. I think the idea is that we own it together as best we can. There’s one of my favorites, and I talk about this a lot in the book, in Christina Wiley’s book, Radical Focus, which is one of my favorite books about anything she basically says.

[00:52:06] All team level goals should not be more than one mathematical operation or one click away from company level goals. And I think that there are ways that guiding principles can be really valuable here. For example, if you have one team that’s responsible for bringing people into the funnel and another person responsible for converting them, and those two things add up to a number of converted users, then that’s a valuable way to break things down.

[00:52:33] But again, I think the trick is to never get more than one well understood mathematical operation away from what success looks like for the business at large. And within that, there are ways to break things down that can be helpful, but we don’t want to break things down too much. 

[00:52:49] Janna Bastow: Great advice. Thank you.

[00:52:51] And thanks to Tom for sharing the name and the author there. That’s Radical Focus, Christina Wodke. One last question. Do you have any advice for how to show impact for physical product teams compared to software? Challenges include things like longer software, longer life cycles and less data to work with.

[00:53:07] Matt LeMay: Yeah. That’s a great question. And again, I think it all comes back to like, how has your business defined success? I’ve worked with some big CPG companies in the past. There is definitely just a different timescale and a lot of kinds of software development. Best practices just don’t make sense at those timescales.

[00:53:25] And that’s okay, think about what success means for your business. Take those timescales into consideration when you’re estimating the impact when you’re estimating the risk. Again, everything kind of cascades from your business model. So if you have a business model, I definitely feel for folks who are living in a world of B2C software best practices, trying to deliver things that do not adhere to the timescales of the best practices.

[00:53:51] But that’s where your local expertise becomes even more developed. Yeah. 

[00:53:56] Janna Bastow: There’s no shortcut to good collaboration and spending time de-risking and understanding the problems in front of you. 

[00:54:02] Matt LeMay: Absolutely. 

[00:54:03] Janna Bastow: Matt, thank you so much. Those are the, that’s all the time we have for questions today.

[00:54:07] I know that we did have some further questions, but thank you everybody for jumping in on that. Yes, so 

[00:54:12] Matt LeMay: much for 

[00:54:14] Janna Bastow: joining. 

[00:54:14] And in the meantime, if anybody wants to check out ProdPad, start your free trial today. And give us a shout if you’d like to get in and see a demo of it. We’ll be happy to take you through. And in the meantime, Matt, thank you so much for joining us today and sharing all this knowledge.

[00:54:28] It’s been hugely insightful and I know that everyone here got lots of insight from it as well. Thank you. Thank you so much. It’s been great. All right. Take care, everyone. Have yourselves a great rest of your day, wherever you are. Take care. Bye for now. 

[00:54:44] Matt LeMay: Thanks, y’all.