Article Club – Avoiding Day 2

At work, we regularly get our Product Owners and Product Managers together to discuss developments in our company and in the PM industry. This week we had a great conversation around Jeff Bezos’ recent letter to Amazon stakeholders, and below is a discussion guide if you’d like to facilitate the conversation at your company too! The letter outlines the top ways that Amazon avoids Day 2, (the gradual decline into obsolesce,) through true customer obsession, resisting proxies, embracing external trends, and high-velocity decision making. Our conversation was free-form, and many of these questions were covered naturally and asked by others, but it’s always great to have a set of backup questions ready to go to spark debate. Even if you don’t do a discussion group, I highly recommend reading the letter.

  • Quick Take – Go around the room
    • What did you think about the letter?
    • What was your top take-away?
  • Overall
    • What day are we on, Day 1 or Day 2?
  • True Customer Obsession
    • Do you feel we have true customer obsession?
    • How are our customers “beautifully, wonderfully dissatisfied”?
    • How could we highlight and lean into our customer obsession, or improve it?
  • Resist Proxies
    • Do we have any proxies? Could we avoid using them?
    • Do we have any cases where our process is the proxy for the results we want? Do we own the process, or does the process own us?
    • Do we have any proxies for customers?
    • How could we highlight and lean into resisting proxies, or improve it?
  • Embrace External Trends
    • What’s the last external trend we embraced?
    • Are there external trends that we should be embracing?
    • How could we highlight and lean into embracing external trends, or improve it?
  • High-Velocity Decision Making
    • What is our decision making velocity? High, medium, or low?
    • Do we have the right amount of decision-making processes?
    • Do we make decisions with 70% of the information?
    • Do we “disagree and commit”?
    • Do we recognize misalignment early and escalate?
    • How could we highlight and lean into high-velocity decision making, or improve it?
  • What actions and next steps should we take from this conversation?

The Power of Ratios

Financial Intelligence CoverChapter 20 of On Financial Intelligence is all about the power and importance of ratios in financial analysis rather than totals. For instance, rather than looking at a company’s total earnings, it’s more telling to look at the ratio of earnings per share. Ratios are powerful because:

1. You can compare ratios to themselves over time. A ratio lends itself to self comparison because it’s unaffected by factors like company growth. If the numerator of a ratio grows, so too should the denominator. If the ratio changes over time, then you’re seeing a truly interesting trend in part of the finances becoming skewed.

2. You can compare ratios to what was projected. By setting goals and projections as ratios, it’s easier to make decisions. For instance, if you set a goals of keeping a product’s costs below $1 million, it’s hard to determine if you should make a $20,000 purchase without totaling your current costs and projections. However, if your goal is to keep margin for a product to a certain standard, you can look at the costs for an individual decision more discretely because the ratio (margin) goal can pertain just to a specific feature or decision.

3. You can compare ratios to industry averages. Public companies publish their key ratios quarterly and thus you can compare your ratios to theirs to determine if you’re on track, needing improvement, or have an advantage in the market.

These same arguments for why ratios are powerful in financial analysis also apply when setting KPIs for your product. When choosing a KPI around increased user activity for Facebook, for instance, it may be tempting to set a goals of 10 million posts in a quarter. Instead, if the KPI is to get to an average of 10 posts per user for the quarter, the goal gets the advantages of ratios as described above. You can compare this ratio over time and see if users are generally more active than the same quarter last year. You can use it in decision making by examining whether a feature is likely to make a user more likely to post and tracking posts per user in A/B tests. And you may be able to compare it to other social networks because, although they’re smaller than you and thus have less total posts a quarter, the ratio of posts per user is still comparable from one network to another.

So, when setting up the KPIs for your product, think about using ratios rather than fixed totals. Tracking totals is fun for milestone celebrations (like having the millionth user), but they’re far less actionable when making decisions.

We Are All Human

Financial Intelligence CoverKnow your assumptions. That’s the first theme in a book I’ve begun reading: Financial Intelligence. Before diving into how to read and interpret financial statements, Karen and Joe (the authors) want to make it clear that all financial analyses are based on assumptions. Be it the depreciation schedule for a vehicle or what counts as cost of goods sold (COGS), there are judgement calls and assumptions that must be made to create a financial analysis. If you understand these assumptions, either by talking to your finance team or reading the footnotes for a financial statement, you can get the full context for the analysis and have conversations about whether those assumptions are accurate. Don’t just accept numbers. Instead, understand how they were chosen and question.

I believe this lesson can be extended farther to teams beyond finance. For new Product Managers, it’s likely the first time he or she will interact with teams like finance, legal, and security. These teams are often shrouded in mist as the common conception is that they speak their own language while making decisions that affect everyone. However, it’s important for a new Product Manager to understand that these teams are human. They must make assumptions and guesses to get their jobs done, and those assumptions are often wrong as assumptions often are. A new Product Manager should strive to form relationships with these groups to understand these assumptions as well as learn how to best inform them of their products impacts to their decisions. This relationship can be formed through informal 1:1s or lunches, or simply getting on the phone to talk to these teams rather than sending email. And even better is to read an intro book to those teams, like Financial Intelligence, to understand their lingo and the framework for their decisions.

So far Financial Intelligence is quite good, and I expect to have several posts about the parts of the book as I read through it.

Service Design – Is your Service Ethical?

14-service-design-320x480For the final meeting of the Service Design book club, we covered Chapter 9 and did an overall debrief of the book. This chapter was the least liked by the group. We could tell that it was written by a different author, making it feel disjointed from the rest of the book. The subject was also about assessing whether a service is ethical, which did not pertain much to our services.

However, the chapter got more relevance recently for me at the Mind The Product SF conference when Marty Cagan promoted adding “Ethical” as a new fourth dimension to a Product Manager’s values of Viable, Feasible, and Usable. He talked about how too often he’s seen Product Managers ignore the ethical nature of their products to pursue the latest fad in technology or profits. I agree that it’s a value to consider when designing a service or product, and when training a new Product Manager it’s an important discussion as often a new Product Manager has not been in a position to make decisions that could have wide-ranging ethical impacts. Rather than telling the new Product Manager if something is ethical or not, teach them how to talk about ethical attributes of their product with teams like Legal and Security to determine it for themselves. Since ethics can be subjective, it’s crucial for them to get feedback from others on tough decisions rather than assuming that they know best.

If you’d like discussion questions for Chapter 9 and an overall debrief for your own book club, here are some that I used:

  • Did the triple-bottom line of economic, societal, and environmental impact resonate with you? How do you feel we perform in regards to these three measures?
  • Which practices from this book would you like to try out?
  • What’s your one take-away from this book?

And as this was the last session of the Service Design book club, here are links to the prior posts. If you decide to run your own, it’d be awesome to hear how it went for you and what types of conversations you had.

  1. Service Design – Classify your Service Model
  2. Service Design – The Spirit of Discovery
  3. Service Design – Service Blueprinting
  4. Service Design – Expectation Setting
  5. Service Design – Is your Service Ethical?

Service Design – Expectation Setting

14-service-design-320x480For the fourth session of the Service Design we looked at Chapter 7 and 8 which covered Service prototyping and measuring services.

One of the themes of this section was in setting expectations. Services are experienced through the lens of  expectations, so it’s important to know what expectations your customers have before they use your service and what expectations the rest of your service has set. You can then design experiences that both meet these expectations and set appropriate expectations for other experiences in your service offering.

For Product Managers, the adage for expectation setting is “under promise, over deliver.” Whether it’s talking about future roadmap items or responding to support issues, be sure to set expectations that you can over-fulfill. I’ve found this adage is an especially good one to teach to new Product Managers as likely they’ve had an experience of over-promising that they never want to repeat. This saying is an easy one to remember for tough situations and serves as a quick safety check before saying anything close to a promise that may be misinterpreted by marketing, sales, customers, or other groups that are eager to hear commitments they can act on.

These chapters also had a good overview of prototyping practices for service experimentation, which can be a good resource for Product Managers. Here are also the discussion questions I used for this session if you’re interested in digging deeper into the chapters:

  • Do you have an example where a solution had issues because it was not designed with the whole in mind? From the book “The entire purpose of service design blueprinting is to ensure that all the different elements across all touchpoints are not designed in isolation.”
  • Do you feel we have any places with particularly good or bad expectation setting? Or have you been the recipient of particularly good or bad expectation seeing? From the book “As customers, we have expectations of a service in terms of quality and value that overarch the day-to-day tasks we undertake. These expectations are set by the brand and our experience of other services, and are closely tied to the amount we are paying.”
  • Do you feel we have any touchpoints that are too high in quality? From the book “Sometimes, you may need to consider reducing the quality of a certain touchpoint to enhance the overall experience of quality in the service. When you set consistent expectations in each interaction and fulfill them in the next, people will feel quality.”
  • What do you think are some great service measurements that we could be tracking? How could we set a baseline? From the book “However, it is important to define some measurement criteria before a new design is launched and to track these parameters to prove value and improve the service.”

Service Design – Service Blueprinting

14-service-design-320x480The third session of the Service Design book club covered Chapters 5 and 6. These chapters cover techniques for describing services, which fed well into work we are doing this quarter to improve our customer experiences. Jenni and I took the opportunity to try the book’s technique of service blueprinting to create a holistic view of our customer’s experiences. If you have not read the book, I think you’ll find this technique useful as it’s easy to apply without full understanding of service design. And if you have read the book, you know the examples in the book are hard to read and/or not in English, so hopefully this shows a real-world example.

We spent a couple hours creating our service blueprint, using a whiteboard and big stickies to easily change our approach as this was our first time service blueprinting. We started by drawing several swimlanes on the board (where TBD are blank spaces):

Physical Evidence TBD TBD
Customer Actions TBD TBD
Onstage TBD TBD
Backstage TBD TBD
Product/Systems TBD TBD

We then created the backbone for our service in large stickies. A key point from the book is to set a boundary for the blueprint as it can easily get out of scope if you don’t constrain it. Our backbone had about a dozen stages, with the first couple looking like this:

Physical Evidence Signed Contract Welcome Email
Customer Actions TBD TBD
Onstage TBD TBD
Backstage TBD TBD
Product/Systems TBD TBD

We then gave detail to each stage to show what the customer, onstage, backstage, and product actions are. Many of our stages had blanks for some areas as there are not activities onstage or backstage.

Physical Evidence Signed Contract Welcome Email
Customer Actions Product/Service Selection First Login
Onstage Contract Negotiation Welcome Text
Backstage Legal/Finance Account Provisioning
Product/Systems Provisioning System Email Automation

We tracked our open questions and ideas for improvement along the way on different stickies. At the end we had one of our key service reps join us in the room to review what we created, which led to some great conversations and corrections to our understanding. Most notable were discussions around how certain product features aren’t used by our teams as we thought they were, and around how we could make the final contract termination stage better to help our customers stop using our products.

I think the experience was great with a new PM for a number of reasons:

  • The blueprint creates a foundation for understanding our full customer experiences, not just the product interactions.
  • Trying a new technique together gives a space to experiment and collaborate towards a shared success with a blueprint artifact.
  • The stakeholder review at the end helped form a key relationship for Jenni.
  • The blueprint creates shared understanding for Jenni and I which can be used between us as well as with the development team and stakeholders.

We are planning on sharing the blueprint with others as a scaffold for this quarter’s work and to further validate some of our improvement ideas. I think it was a successful activity and would recommend it, especially for product work that impacts a customer across multiple touch-points in their life cycle.

If you are interested in hosting your own Service Design book club, here are some discussion questions from these chapters:

  • What did you think of Service Blueprinting? Should we set up a workshop to create one? From the book, where the importance of the mapping activity is highlighted: “First, it wasn’t the map itself, but the mapping.”
  • A theatrical metaphor was used to describe frontstage/backstage service activities. Did this resonate with you? Why or why not? From the book “Shostack’s line of visibility has transmuted into the frontstage/ backstage metaphor in which anything that the “customer” experiences is frontstage (on-stage would be more appropriate to the metaphor) and everything else that goes on behind the scenes to make that happen is backstage.”
  • Are there backstage activities that we could bring frontstage to improve our service experience? From the book “Often, this backstage activity is evidenced in some way by bringing it frontstage, such as the folded toilet paper tip in a hotel bathroom that indicates the room has been cleaned.”

Service Design – The Spirit of Discovery

14-service-design-320x480For the second session of the Service Design book club, we covered Chapters 3 and 4. These chapters focused on the importance of research and many techniques to gain customer insights.

For a new Product Manager, the techniques discussed in Chapter 4 are a great introduction to the tools in the discovery tool belt. And more important, these chapters stress the value of discovery in gaining insights that power service design decisions. As you train a new Product Manager, it’s helpful to take this same spirit of discovery in talking about new ideas that the new PM may have. Rather than dismissing a new idea due to your preconceived notions of what’s best, take the stance that the new idea is worth testing. Talk to the new PM about how their idea can be validated, either through existing data, interviewing internal stakeholders, or reaching out to customers. And be comfortable saying you don’t know what’s best. By showing how you go about learning and gaining customer insight, you’re teaching the new PM “how to fish” rather than giving them the “fish” of your prior experience.
As we covered this section at work, we had a fruitful conversation focusing on how our Customer Experience (CX) Team currently shares insights and how we could do it better. Our CX Team has a blog, and we knew we could drive more internal traffic to it. We talked about ideas such as adding new posts to Slack or Chatter and creating posters of valuable insights to distribute. As the HourSchool case study suggested, we also talked about ways to better ingrain CX into existing standing Services meetings to make customer insights a regular part of our services planning and give it continual focus.

If you are interested in using Service Design for you own book club, here are some discussion questions you can use for Chapters 3 & 4:

  • Do you agree with the focus on qualitative over quantitative research? Is it better to get 100 insights or 10 truths from research? From the book: “Statistics are not very actionable for designers—we need to know the underlying reasons.”
  • Do we utilize our internal staff enough when performing research? Are there ways we could utilize them better? From the book: “When time is short and a service improvement project has a limited budget, it is often a good idea to prioritize the research time with staff and data to dig quickly into the detail that is needed to design great services.”
  • The HourSchool case study mentions that research became a regular part of meetings. Would it be beneficial to make research updates and recruiting a regular part of Service Team meetings? From the book “Announcing new classes, soliciting requests, and recruiting volunteer organizers are now standing agenda items.”
  • As we learn about Service Design and create exciting improvements to our Services, how can we ensure our actions and momentum continue on? From the book: “Service innovation should have a lifespan beyond the length of time the service designers are involved in the project. This means recognizing that other stakeholders may engage in many of the activities of service design as part of a continual process of change.”
  • Were there any discovery tools you’d like to try? Should we do a Service Safari together? Should we put together a Brand Sheet to use in discovery with customers?

Service Design – Classify your Service Model

14-service-design-320x480I’ve started leading a book club at work for Service Design and it’s creating some great discussions around how to improve our service setup. This week we covered Chapters 1 and 2, which gave an overview of how a Swedish insurance company used service design and the basics of service design. As we progress through the book I’ll post about interesting ideas and discussions.

One of our first talking points was around the notion of classifying services in one or more of the following values:

  • Care – Services that maintain people or things, such as healthcare or airplane maintenance.
  • Access – Services that enable people to use something temporarily, like a car rental.
  • Response – Services that respond to people’s unforseen needs, like an insurance policy.

For a new Product Manager, this classification of a company’s service values can help them think about a product holistically. A great point in the book is that many businesses silo parts of a customer experience into business unit to optimize organizational structure, but the end customer receives the service as one package. It can be all too easy for a new Product Manager to think only about product development without considering how product decisions impact the overall service that a customer receives. And that a customer’s experience with your company is shaped only partially by the product experience. It’s important to work across the business with all stakeholders, incorporating internal needs into product design and communicating profusely about any service impacts.

At work we’re in the midst of transitioning from Access and Response values to Response and Care values, which is an exciting time to explore new ways to structure our services. It also means that the tone and value proposition of our products has to change to support this new service model. Viewing the service change as a fundamental shift in service values helps give a measure for examining product changes. Any product change I make should be about getting us away from an Access value to a Care value. For instance, instead of giving customers access to raw exports of data, we should be caring for them by bundling that data into actionable recommendations that can easily implement.

If you are interested in using Service Design for you own book club, here are some discussion questions you can use for Chapters 1 & 2:

  • Gjensidige had their CEO and Executive Team talk to customers. What effect do you think direct Executive Team involvement would have/has on our services, both internally and externally? From the book – “When a CEO sits down to talk to customers to find out what they think, it sends an important signal to the rest of the organization and the industry.”
  • Where are we siloed as a service organization, and where are we not? What impact do these silos or lack thereof have on our customers? What could we do to help bust any existing silos? From the book – “The division of the silos makes sense to the business units, but makes no sense to the customer, who sees the entire offering as one experience.”
  • How do we think and talk about our customers: as productive assets or as consumers? From the book – “The biggest missed opportunity in development is that organizations don’t think about their customers as valuable, productive assets in the delivery of a service, but as anonymous consumers of products.”
  • Services deliver one or more core values: Care, Response, and Access. What are our service values? Is it different depending on the product/value proposition?
  • How could we make our service more visible to customers? How do we make the invisible visible? From the book – “As a result, service designers frequently need to make the invisible visible by showing customers what has gone on behind the scenes, showing staff what is happening in the lives of customers, and showing everyone the resource usage that is hidden away.”