Projects or Products? Three Keys to Overcoming Uncertainty
A practical guide for digital leaders to understand how to deal with unpredictable scenarios.
We’re living in an uncertain world
During these times, we all have seen how uncertainty has become part of our daily lives. As now this is something we consider in our personal choices and projections, it’s also one of the leading factors when making business decisions. Customer’s behaviors have changed -and are still evolving- so fast that only companies with the right mindset will end up victorious after this crisis.
As a result of this situation, digital companies are now forced to adopt a different -but long-standing- way of continuous leading and improving; it’s needed to have a “Product Mindset” instead of a “Project Mindset”. In other words, we need to focus on creating value over just delivering features, on quickly adapting from learnings over following a fixed plan, and also on empowering teams rather than micro-managing them.
OVERCOMING UNCERTAINTY = APPLYING A PRODUCT MINDSET
This article is intended to help you understand why this is so important and also to assist you with some brief advice to start owning this mindset change in your organization. Enjoy!
PRODUCT MINDSET: Maximize outcomes with the least possible output
“Your job is not to build ideas faster, your job is to build just the amount necessary to maximize outcomes.” — Jeff Patton
It’s a fact that companies’ resources are limited -these times even more- and solution options are infinite, especially regarding digital products, so we need to be really effective in what we choose to do. That’s why the main objective when having a Product Mindset is to provide the most significant results with the fewest possible deliverables, assuming that you will use your resources efficiently enough.
- Projects = Max. [Outputs] / [Resources] = Efficiency
- Products = Max. [Outcomes] / [Outputs] = Effectiveness
In other words, we have to search for sustainable delivery shortcuts that have the potential to drive us faster to those desired outcomes. There is a fantastic sketch from Jeff Patton that explains this concept visually:
1) FOCUS ON VALUE: Concentrate on creating value through each delivery
“Don’t fall into the trap of creating more and more functionalities, losing the view of what is important: to produce value for customers and users, achieve business goals, and innovate against competitors.” — Melissa Perri
It’s known that ideas and deliverables don’t have value by themselves, which quickly leads to a classic and well-known problem; we think some new features will be awesome, but most of them won’t. As we deliver them, we realize they’re not as meaningful to customers as we thought, and nobody uses them. And worse still, we try with feature improvements to force our users to use them as a nonsensical effort to justify incurred expenses, usually with devastating results.
- Projects = Focus on delivering Outputs (Features) = Accomplishing delivery dates
- Products = Focus on delivering Outcomes (Results) = Adding value to the market
As expected, now the most important question isn’t “When will we ship the next feature?” but instead, “How will we achieve the expected result?”. As Henrik Kniberg explains in one of his clarifying illustrations, our job as product specialists is to bring value to market -customers and business- by prioritizing and delivering the most valuable solutions:
But here’s the tricky part: To create the most valuable solutions and really influence your users, you first need to find the biggest opportunities where the most value is.
“A solution can only be as good as your understanding of the problem you’re addressing” — Paul Adams
That means that the more you understand your customer’s context and you co-create with them to solve their biggest problem, the more probable it is that the product you deliver would be meaningful for them. Only then would they behave as you expect, and as a result, you would be closer to your goals.
Here is some advice:
- Be clear about the core value of your product. The “Value Proposition Canvas” is a great tool to use for that.
- Maintain a deep understanding of your customers and their context as much as your business. Be sure you have continuous contact with them, preferably on a weekly basis.
- To discover the greatest opportunities, run different types of exploration experiments. Most of the time, it’s not enough to only conduct interviews. Some good examples are in the book “Testing Business Ideas” (p. 94–95 “Discovery Experiments”)
2) LEARN & ADAPT FAST: Validate early, learn from interactions, and adapt your path accordingly
“It’s not hard to get output, what’s hard is to get results” —Marty Cagan
The ugly truth in Product Management is that consumer-facing products are full of uncertain risks because nobody can know in advance if people will use our deliverables as expected or planned. This means that very probably, even if you focus on providing value, our outputs will not address our expected outcomes, and we have to assume that.
- Projects = Predictability = Working with determined risks
- Products = Uncertainty = Managing unknown risks
An early validation approach helps you to manage risks by encapsulating them into short periods, reducing the probability of significant failures. The idea is to correct your course in case of error rapidly and also to take advantage of your successful steps.
To do so, we need to implement an iterative and incremental way of developing our products, as Henrik Kniberg also explains in another of his illustrations:
Although the first option in the picture delivers the final output faster than the second one, it’s not the best option when dealing with uncertainty. The risk is much higher, you don’t develop any relationship with customers, and you wouldn’t be able to find out if the customer just wanted a bike instead of a car as his ideal solution.
It’s also important to know that you don’t have to deliver production-quality software to validate your products. You can also validate them in an earlier stage by running some experiments, for example, using prototypes or other lower-quality deliverables.
“Remember that our higher order objective is to validate our ideas the fastest, cheapest way possible. Actually building and launching a product idea is generally the slowest, most expensive way to validate the idea.” — Marty Cagan
Here’s some help to accomplish this:
- Validate early and celebrate fast failure. It prevents you from losing money!
- To obtain the best evidence about your solutions, run combinations of validation experiments. Some useful references are in the book “Testing Business Ideas” (p. 96–97 “Validation Experiments”).
- Learn how to slice stories so you can deliver value as soon as possible.
- Ensure you monitor usage data and analytics to (in)validate your solutions and support your decisions.
- If you have enough evidence to do so, don’t hesitate to kill features. It will make your product easier to use, and that should enhance your business outcomes.
3) ALIGN & EMPOWER: Align on key results, but let the teams resolve how to get there
A leader’s job is to communicate where to go and why, while a team’s job is to figure out what to do and how to achieve that challenge.
As you show your teams their goals while you are open about the solution they could provide, you don’t contaminate the decision-making process, and it enables them to discover the best path to maximize results. At the same time, that naturally leads people to better performance, creativity, job satisfaction, and commitment to the organization, as people feel they are valuable in their job.
- Projects = High alignment but low autonomy = Efficient constrained teams
- Products = High alignment and high autonomy = Effective empowered teams
To really be able to achieve outcomes through autonomy, you first need the leadership to be able to communicate those expected results effectively. As Henrik Kniberg also explains, alignment enables autonomy to be effective; in other words, he describes that the more aligned we are, the best performance we will have through autonomy:
It’s essential to understand that our ideas as leaders are very probably not the best ideas we can develop as a solution. Neither are most approaches from team members as well. The truth is that the very best ideas start from connecting the dots about customers, resulting from a deep understanding of them and exhaustive analysis of their behavior and context. That means you need to invest much time in it, and that’s definitely a key part of each team’s role.
“He reminded me that my job was to produce value, not develop my own ideas. It wasn’t until I found some humility that I was able to create products that people loved.” — Melissa Perri
Some last tips can include:
- Clearly define and communicate the Product Vision, main objectives, and key results to your teams and organization. The Product Vision Board and OKRs are a good starting point for that.
- Make sure all team members understand why they have their particular mission. To perform well, you need them to be convinced about the importance and direction of their challenges.
- To enable teams to work towards their goals, verify that they have enough tools and skills to do so.
- Monitor your team’s Key Results continuously and make them visible to all team members. Those are your leading performance indicators.
Start the journey now!
I hope you have enjoyed this read. I also hope this helped you understand the -huge- differences between a Project Mindset and a Product Mindset and the main reasons behind applying the second one. In any case, I’m not saying that a Project Mindset is bad in all cases. Still, it’s essential to know that it could be really damaging for consumer-facing products and other digital projects where uncertainty is present.
You also may have noticed that this article’s main concepts are not too complex, but the real challenge here is to apply them to your particular context effectively. That means moving from a Project-led organization to a Product-led organization that takes advantage of uncertainty. You can kick off by applying the given advice from above, or whatever best fits you; however, the most important takeaway is to begin!
And just before you leave, please keep in mind this key concept: Outputs don’t guarantee results by themselves, and even focusing on them could be the main reason for failing. If you want to make your product a better place for your customers -and your business-, align your company to stop thinking about new features and start talking about improving outcomes.
