Part 1: Customer are numbers!
There have been a few moments in my life when I’ve experienced what’s known as ‘cognitive dissonance’. This is a psychological state one enters when confronted by facts that challenge fundamental beliefs. It’s an ‘earth is round, not flat’ type moment that is very disorienting. It last happened to me when I was updating the C-suite about the progress of a new product that was still in beta and therefore ‘pre-revenue’, meaning it wasn’t yet making money.
I filled the presentation with genuine quotes from customers that had come to me through a variety of channels. These quotes emotionally conveyed the impact our product was making on their lives. For me they were golden: extraordinary currency that clearly indicated we had a product that was solving a real problem, often with powerful results.
I was surprised, then, to be asked to remove these quotes from the final version of the presentation. Not only did the C-suite not want to hear them, they seemed embarrassed at being confronted with such awkwardly humane data. That’s when I realised that customers didn’t really matter. Customers as individuals and human beings, that is.
Product Managers in ‘Grown Digital’ companies — eg. media, financial services or telcos — are expected to be Agile and Lean in everything we do and educate those around us. But old habits and practices die hard. Corporate cultures have evolved around certain modes of thinking and these are ingrained in the organisational DNA.
As you get older, you pay less attention to what people say and more to what they actually do. No organisation is going to say they don’t care about their customers, even RyanAir have stopped doing this. They all say they put their customers at the heart of their business. But when you look behind the curtain this is seldom the case.
As a Product Manager, I believe in putting customers at the centre of the product development process. In my opinion, you can’t spend too much time getting to know customers but you can easily spend too little. I’ll wager most Product Managers worry about the amount of time they spend with customers. It’s a feature of the job.
However, in a mature organisation customers are not the axis around which product development revolves. And this is where Product Managers can find themselves hopelessly misaligned when communicating upwards. Customers are just numbers. To discuss them in any other terms is to commit a serious error of communication.
To be credible at a senior level you need to communicate in theoretical constructs and numbers, ideally both. Rather than fill slidedecks with nakedly honest testimonials it is preferable to create a series of slides that look like this:
In most Grown Digital companies, the founders have moved on or passed away. Very likely the company is now public and governance is carried out by a Board of Directors on behalf of shareholders. The company is now regarded as a vehicle for ‘maximising shareholder value.’ This means demonstrating consistently strong return on investment. Usually this is driven by growth in market share.
But when markets become saturated, value can be achieved by cutting costs, raising prices and upselling existing customers onto additional products. And customers are only relevant in the sense that they translate into revenue.
Each quarter, every CEO of a public company has to sit on earnings calls with shareholders and account for the numbers. The only stories they want to tell have the words ‘growth’ and ‘profit’ in them, preferably with large numbers attached. Talking about slick new features and MVPs really isn’t going to cut it. Twitter did this for far too long. As early investor Chris Sacca pointed out:
Twitter’s earnings calls are mostly dedicated to playing defense while discussing incremental improvements to sign-up flows and tweaks to the service. - What Twitter Can Be, 2015
Ultimately, it cost Dick Costolo his job.
Idealised concepts we may hold around the importance of ‘customer success’ or the inherent value of customers’ passion for our products have no place here. Actually listening to the voice of the customer is a singularly unusual event. Forget the anecdotes about Michael Dell sitting in on customer calls every week. This does not happen. In fact, internal stakeholders are frequently viewed as more important than paying customers. This is how the HIPPO rule came to pass and why it remains the standard method of decision making.
This pressure generates a culture that is counter to the typical mindset of a Product Manager. We’ve all been frustrated and perplexed by how frequently our user-centred design solutions get distorted and sidelined. But the alternative too often feels like abandoning our instincts entirely.
Here’s some advice for Product Managers on how to stay customer focussed and manage upwards effectively at the same time:
1. Accept that most companies are not ‘customer-centred’ businesses at heart. Neither are they product-centred. Few of us can expect to work under a CEO like Steve Jobs who genuinely valued product over profit. Companies are run by beancounters. Shareholders trust people to manage their investment efficiently, not obsess over the user experience.
2. Be patient: times are changing, albeit slowly. Maximising shareholder value is now fashionably described as ‘the dumbest idea in the world‘ and is associated with everything that was rotten with corporate thinking before the 2009 financial crisis. Though still intangible, Apple has proved the power of an emotional connection to your products
3. Stick to your guns, but be empathetic to the needs of your audience. If Dick Costolo can lose his job because he’s not meeting earnings expectations then any CEO can. This is the daily reality that executives live with. But despite all the business and financial double-speak, customers really do matter and no Product Manager should ever feel ashamed of being too customer focussed.
In Part 2 we’ll look at the next big pillar of managing upwards: the Executive Update.
For more about digital Product Management, check out pivot.uk.com