Arguing Agile

AA185 - What Companies Do Instead of Strategy

• Brian Orlando • Season 1 • Episode 185

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Are you struggling with strategic planning in your organization?

In this episode, Enterprise Business Agility Coach Om Patel and Product Manager Brian Orlando walk through the common mistakes companies make developing and executing strategies.

Listen as we discuss:

  • The goal mirage of confusing aspirations for action
  • Overemphasis on planning and forecasting
  • The pitfalls of being a "feature factory"
  • Neglecting the external business environment
  • Mistaking operational efficiency for strategy

Learn how to identify these issues in your own organization and discover practical solutions to improve your strategic planning process.

strategic planning, business strategy, feature factory, operational efficiency, market analysis, product management, agile development, leadership, decision-making, innovation

#BusinessStrategy #ProductManagement #AgileLeadership #StrategicPlanning #Innovation

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welcome to the Arguing Agile Podcast, where Enterprise Business Agility Coach Om Patel and Product Manager Brian Orlando argue about product management, leadership, and business agility, so you don't have to. So we had a session recently about strategy, about how to construct the strategy, and we walked through several companies very famous and successful companies. And I wanted to have a follow up to that podcast, very quick follow up. I want to have a couple of follow ups actually, if you listen to that podcast. Right. But one of the followups I wanted to have is what do companies do instead of having and running successful strategies and how you can spot when companies are, I don't know, I'll stop short of saying misbehaving, but when companies are kind of going haywire, when their strategy facade kind of goes off the rails when they're operating sub optimally. Yes. Yeah. This is a, yeah, this is a, it's going to be a good one because I think we're going to delve into some of the, like the anti patterns, I guess is the word and people will be able to relate. Actual companies whether you work in there or not to some or maybe some or a few or more of these things That we're going to cover probably about a dozen or so roughly. So yeah, let's get started wasting no time. Let's start in category one the goal mirage Confusing aspirations for action inside of the gold mirage. I don't know that we're exploring alternate titles for this podcast. I think like I couldn't, I couldn't discard the gold mirage. So good. Like it makes this a great thumbnail, by the way. when we finally get to the middle of the desert where we've been walking for days, we get to the mirage. And what's there. Do you ever get to the Mirage? Oh, you can. It's not that oasis that you can actually feel in touch Right at the end. You get to the mage at the end. That's right. And I feel many, many people have gotten to the mirage of, I'm just gonna set financial goals for you. And then however you meet them, that's not my problem, but I set the goals for you. So like we've seen, I think everybody listening to this knows like, Oh, you need to grow 15 percent year over year. You need to increase revenue for this product line by 10 percent year over year. No, no, ignoring the Deming podcast that we did, where very clearly Deming was like, by what method are you going to do this? Like, Oh, I need to increase the bottom line revenue of this product line. by 10 percent cool. I'll just figure out how many people just fire right before the quarter closes And then i'll just fire them immediate boost to the bottom line Forget that we're going to take the next two years to rebuild that talent pool But it'll make our it'll make these numbers look good this setting a arbitrary financial goal without any kind of plan or planning attached to it It sounds ludicrous to say it out loud But it's amazing how often it happens exactly I call this Cutting the branch of the tree that you're sitting on, right? With the saw toward the trunk. You're sitting on it, you're cutting away at it. Yeah, good luck. The goal mirage is actually real, right? Because if you look at the companies, pick a duration, a year, two years, three years, and figure out companies that have gone under and really kind of lift the hood and see what happened there. Yeah. And you'll find this is probably very prevalent out there. confusing aspirations for action is kind of like the grouping that we had here. Arbitrary targets. We're going to grow this market by 15%. Why that market? Why 15%? but more importantly, how? How are we going to grow that market? Just go do it. Make it happen. How are we going to grow that market? I go back in time when I was working at a company that served logistics. So, we want to grow the number of truck drivers that use our mobile app. We want to increase the number of transactions year over year by eight percent eight percent is pretty good. It's pretty reasonable number It's not fifteen percent thirty percent just a wild number like that Seven eight percent is within reason right? Well, how do you increase the number of transactions that well? You need your drivers to be using your app more If you don't add users, meaning adding companies, meaning new sales, if you don't have new sales, how are you going to get your existing customers to deliver more truckloads of cargo places? That just means they need to drive more places like that faster. that's not naturally going to happen. No, it's not that's automatically a constraint that's going to bite you and you know that up front So in that case we would look for horizontal places that we could move if we can't be where the driver is dropping off their cargo and we can't take transaction value out of that What other value can we give to the driver? You know, can we get in line with their like their fuel purchasing can we get in line with figuring out how to help them figure out their the the driving plan when to rest where to go Can we figure out how to get them the services they need because drivers have to stop places They have to buy showers. They have to buy food can we Help them map that kind of stuff out and then we're making the individual user, the driver in this case, more efficient, a little more efficient planning, more efficient communication back with their home office. we're basically creating a new type of transaction inside the mobile app to be able to handle this new growth line item. Now I bring that up because I want to say cool. We can hit that new seven, 8 percent growth number. We probably can even blow that growth number out of the water, but the team that maintains the app they're still doing a hundred percent of the transactions they did in the previous year. So that team is still. Potentially super stressed about the work that they are keeping it running without even any major upgrades or moving into new businesses. So are you saying I want. It's 15 percent more transactions in the app year over year. Cool. How much money are you willing to spend to get that 15%? Because you might need to hire a couple more developers, hire another product manager, put them on their own team, and then have them dedicated just to that new growth. Yep. You've got to invest in what you're saying in order to get the growth that you're looking for. Absolutely. Yes. And again, this is another area where you see, you see a gap. Between the willingness to invest versus setting these goals Well, investment often is looked upon as a negative because while we've got to we're putting up money here up front, right? But growth sounds good, right? It doesn't just happen, though, right? The case that I just outlined. in that company, the original transactions that I was talking about are drivers dropping off their cargo, they get paperwork signed, all that goes in the mobile app and it gets processed in the mobile app. And the driver gets paid, the company gets paid. Everyone's happy. What I'm talking about now is like, what additional little services can we offer to the driver? that is barely in the same, I understand it's in the same market of logistics. broad market of logistics, but if you really break down the market of logistics to say, you know logistics services logistics fuel logistics Load planning and stuff like that That market segments into several different markets and you really have to ask yourself as a company is like are we Trying to break into a completely unrelated market and we don't have any expertise in house None of our sales people, none of our business people, none of our product people have any expertise about when drivers buy showers and how much money they spend on it. and we expect that we're going to break into that market. Like we own the place, but we have no skill. So if you're not looking to segment the market yourself. You're looking to get into different, You're looking to get into different market verticals. Maybe they're adjacent to you. Cool. But you're good. You think you're going to do that with the same team and maintain all your existing products? It's not like you're freeing the team up of their current responsibilities. That that's where I have a big issue with this one is you're going to set a financial goal. You're not going to give the team any new resources and you're going to expect them to still be accountable to a hundred percent of everything they've been dragging around the last couple of years. at a minimum, before setting this target, as arbitrary as it may seem, maybe do some research, go figure out the stuff you don't know. You get some data on how often drivers stop for showers, where do they stop? Right. Cause they probably have their favorite places and then you can do the analysis based on actual data that you gather. And then come to that kind of a strategy or a goal, I guess, in this case of, you know we're going to grow by X percent or whatever that goal is, but it's an informed goal at that point, right? It's not just simply put it out of thin air. We've been talking a lot about growth, right? So I want to talk about growth for a second, , I tangentially. can talk about growth. So I'm not going to say too long on this topic, but growth because we want to grow, like I think about this for all the private equity firms that I've been involved with, their idea is like, Oh, we're going to grow the company. a company that I was with was acquired by private equity. After they owned the company for two years ish, something like two years, they bought our closest competitor and merge the companies together. Because their idea was we've cornered the market in this business segment because we bought the top one and two players and we merged them together. So now we own all the market. we own the home market. It's very VC, private equity type of thinking of like, we own everything so we can set the price and we'll be in monopoly, right? But really, like their plan. Is just growth for the sake of growth they want to grow to be the biggest player so they attract more attention So more people want to work with them because they're big and because they're big more people want to work with them. They'll continue to grow because they're big. I realize how ridiculous it sounds, but that really is their plan. we saw a lot of that during the heyday of the internet, right? Before the bubble burst, we saw a lot of companies start very small, but then immediately just singularly. laser focus on growing. And I understand why they were doing it at the time because they just wanted to go IPO and they have to have a certain threshold that they want to meet. But that was then right but then you would think that after the bubble burst We would learn from that and people would grow because there's some rationale to how they grow controlled growth, perhaps right or strategic growth and sadly, that's not happened. We're still seeing well on the whole, right? What we're seeing is people pursuing Growth like it's the holy grail and that is not worked out. Well for a lot of people you know, a lot of companies They're suffering because they just simply say we want to grow. Well, why do you want to grow? Right? We want to be the biggest player Why do you want to be the biggest player? Right, right. Can you actually sustain yourself as a biggest player? Do you have everything that it takes to be up there. If you're doing five why's like it's it's like it's It makes you seem like you're the unhinged person in the room doing a five wise. It sounds like you're not the team player, but really, you're really just asking a very clear, like why, what growth? Because like, let's, let's, let's figure out where this goes. Growth because like we're acquiring all these companies Mm-Hmm. customers. They might be in different marketing. Like we might acquire a, a Brian and Om's driver shower business. What does that have to do with Brian and Om's software development company? Software development company or Brian and Om's truck bill plan paying business only because the truck driver is the main player in both of these categories, but the needs of truck drivers. That needs showers versus the needs for truck drivers that have to get their bills paid. That, those, they might have very few related needs. And we may not understand them. I was gonna say, we might be the bill pay people might be really bad at understanding. The shower people's needs. Exactly. Yeah. I think we're seeing this in a lot of cases where companies grew by acquisition, right? That strategy of growth has led to this kind of phenomenon where companies grow. They think they're going to grow because they're buying a market or they're buying customer bases or whatever it is. And. What they're ignoring is the real cost that they have to bear in assimilating a company that they acquire, right? And then this is beyond all the technology and the back office stuff and things like that, that you're actually consolidating. this is outside of even that. It's about strategy. It's about having the right people collectively. Now, how many people are you going to keep from the other company? Because you can't just fire everybody. You don't have the domain knowledge. Oh, I mean, you can. I've seen it. I've seen it too, short term, right? So yeah, yeah, definitely. Like, so there's two other points in this goal mirage category that I want to stay on. Before we get out of here, which is mistaking Certain things for strategy. Let's start with mistaking a vision for strategy. So our vision is that we're going to be the number one trucking app. You know, the number one app that all truck drivers love. That's a real squishy vision, first of all, but confusing that for strategy. You know, so now I've got people throughout the company that are engaged in all kinds of potentially counterproductive Strategies because they think that they're operating on the best intent of the company. They're operating in the best Intent for the company. Yeah on behalf of the company basically by doing a bunch of different initiatives But what you really have what really happens is We're all over the map of what we're actually trying to solve. So one division is trying to solve these things that they think is important. And another division says, well, those things aren't important at all. So now we're all running in different directions with scissors. That's what I'm saying. Well, you can't really pursue a vision. You can, you can pursue strategies that fulfill the vision. So as I tell you let's conquer Everest. We're going to go do a podcast on top of Everest. So that's my vision. And I'm going to go find like Edward Everest and conquer that individual. Like I don't like this. Yeah. Yeah. It's like everyone's interpreting it at their own. Exactly. Exactly. We just say Edwards. There'll be those people that say, what about Edward Scissorhands? Strategy is how you fulfill the vision, right? So if I wanted to conquer Everest, the statement, we're going to do that. May be the vision. But that's not a strategy. How am I gonna do that? Am I gonna do 5, 000 feet per day and even that's not linear, right? So initially I might do 10 and then I might do 3. Yeah, and then take into account the bad weather up there Where's my base camp? where's my the first Right. Place where I'm going to stop. Those are strategic decisions, how you follow those. And for me, it's pretty clear. Vision is not a strategy, but it's, but still right today, we do see companies that befuddle both of those and fall foul of it. That's right. I think of vision statements. It's they're very broad so you can fit potentially anything into that vision statement and those things are not measurable So there's like there's a bunch of stuff missing what does a good strategy look like? Well, you have the kernel of the good strategy as, as prescribed by the richer ult, good strategy, bad strategy book. Let's go with that. Like I said, in the strategy podcast that we have with Nisha, have to have a diagnosis. You have to have a guiding policy that tells you how you're going to deal with it, generally high level. the diagnosis is a problem in the market that you see, or the opportunity that you see the guiding policy tells you how generally you're going to deal with it and the set of cohesive actions are the more lower level plans that you're going to take in the Nisha podcast, one of the things she commented was if you skip constructing a strategy and You go from the. diagnosis directly straight to actions and you skip the guiding policy because the guiding policy has to be vetted to make sure it's the right guiding policy hey because like I go back to this example all the time because I love this example congratulations Ohm we checked your temperature we did whatever we looked in the back of your throat you got strep throat I think the guiding policy is keep it elevated, take two Motrin and wait a minute. Are you sure about that? Guiding policy? Like, that sounds like it was AI driven. We probably should do an MVP and test say, well, I got an elevated doc, I sat here all day and this is stupid I don't know. I feel the same. Still got a temperature. I might die. You probably should do something. I'm like, maybe we need to switch our guiding policy. Do another MVP. Here's some antibiotics here's some of the things, you know the, the Attributing goals where you should have strategies like the goals are down here at set a cohesive actions, you know So even in the podcast with niches, he's like when you skip the guiding policy and you're up here You're I'm sorry up here. I'm up here. I'm on the table. But when you're up here talking about the problem in the market you're observing And then you immediately jumped down to cohesive actions. She's like, you sound insane. I believe that was exactly what she says. You sound insane. this is the category we're talking about now is you're mistaking your goals. I think when we accomplish this, we've met our strategy. We'll solve world hunger. Yeah, boy, you sound crazy. Cause there's a layer that you didn't talk about. And when you skip that. Yeah, not only do you sound crazy, but no, that layer really serves as a checkpoint. So you could say, well, this is, this is how we're going to go about our goals. Are those goals achievable? Are they realistic? Are they completely wacky? If that middle layer really does provide the opportunity to see if that's going to, Help you or not and maybe select even further so do some more fine tuning of those right without that Yeah, I mean you're out in left field really well, that concludes the first part of this podcast Let's let's put a bow on the first part of this podcast about the goal mirage like what what people do When they confuse aspirations for action with regard to strategies, growth dictates mandates, stuff like that. and I want to get into the second part of like, you have a strategy. They're just all ineffective. the first one is like, we're relying too heavily on frameworks and analysis techniques, like SWOT and stuff like that. I was at a workplace. Long time ago that did SWOT every year. we would list out all the weaknesses and all the opportunities in the market and whatnot. And we send all this stuff up to the leadership and they say, Oh yeah, we'd have a big review, a departmental review with them. And they say, yeah, these are, we agree. These are really great suggestions. And then. No action, no action at all and then, then it, well, a whole another year came, came through and the more senior team members who have been there longer, kind of started taking the process a little less seriously. Pay lip service. Got dinged for it to be like, Brian, you seem a little cynical about this process. I don't think you're a team player. I think you need to commit, you need to commit fully, commit and disagree on commit and disagree. I'm like, I don't know. But I see no action from all this work that we're doing real market analysis here and we're seeing no action. So I've seen two different ways this goes down, right? One is when you get help from outside. Use the word help lightly here. So consulting company has called in to help you and two by twos are their favorites, right? The little BCG matrix. So they do that. And then the new tool they have now is Venn diagrams. You know, they start with. Two circles and add a third one and then maybe add four more over time. So they should throw AI in on that. They should. That'll help. So they will come in and they will do your SWOT analysis among others. Just one tool. There are many other tools, right? It doesn't position your company. To be successful with those things because they're not owned by the company. They're simply in a deck somewhere or a powerpoint. The other way i've seen this happen is close to what you just said You bring people together from different parts of the company and you do this rara And people go away. Everybody's nodding up and down at the end of the day at the end of the session or whatever But then they go about doing their own thing because they have their own vested interests that they're pursuing So they have their own Strategy if you want right that they're following for their own little unit. Yeah, well, it could be a business domain could be a sub domain, but they're not really doing anything that contributes to the bigger, right. You know, org strategy. I've seen people take what you're describing. I've seen people take this away as their own little initiative of like, well, my department or we're going to. Where sometimes it's cross departmental. We're going to assemble this like quick reaction team. They'll come up with names like that. Like rapid reaction team to deal with this thing. And then They'll spin that team up and the team will borrow people. Well, let's be honest with these seven companies. They'll borrow resources. They'll borrow people from different departments and they'll people like stop working their day jobs for a period of a couple of weeks or whatever and do something special, but then it all like, It all kind of slowly collapses over time is the rack teams Effectively go back right the rapid action team or whatever, you know I like my favorite is the strategic high intensity teams Go abbreviate. Thanks. Yeah, so I mean look we've seen this before many many times. There's no coherent focus. That's what I like to say. It's not taking the company forward anywhere, but everybody feels good that they're doing the right thing, except they're not actually doing it. They're just discussing it. So if you have, if your company has strategies and they're written down somewhere and they're tracked in one place and everyone's looking at them, the. Formation of a special team to go try something or go launch an MVP something or go explore some market or something. That will fall under the set of coherent actions and the guiding policy for a strategy. So there is a way to do this. But the takeaways, , what you're measuring, the coherent, coherent actions from. You'll be watching those. Like it is not just a bunch of people spinning up things that are like departmental to their own or like, oh, I'm manager and I heard the company has this problem, so I'm gonna. Do something under my budget to try to hail Mary and maybe people love me. It's a company level strategy or business unit level. If you're a big company or whatever, it doesn't. You know, it scales. Budget is one aspect that you just highlighted that really gets in the way here because in order to do the work, you have to spend the time and effort and nobody wants to sacrifice their own budget to do this for the common good. Oh no, I'd rather spend that money on my little area. You make a good point individual budget may not be able to because the budgeting process was done nine months ago in a room away from on an off site with all the smart people and you weren't even included. So like you, like you can't even question that process. There's no pool or body or whatever to go back to to say, Hey, we want to launch a new strategy. I need a little more money. Like you got to wait that the strategy panel doesn't convene for another. Three months, right? You're a congressman and get your business case together. I don't want to do all that. I'm ready to respond to this challenge now. I'm ready to gather evidence so I can ask for money. But I need some money to do that with but all you've given me is a budget from 9 10 11 months ago That says just do normal business, right? I can't work with anybody to my left or right because You know, they don't want to work with me because their budget is for them and they'd rather work on their own teams with that money. So immediately you have these Really constricting silos taking place in the form of budgets. So what is the solution here? Right? Let's talk about that. What is the solution here in order to do this? across the aisle, to use a cliche there, but I mean, if you really want to, if you really want to talk radical, like burn everything down solution, it's don't do yearly financial planning. that is the answer, but you know, people that are doing annual budgets aren't going to just in one fell swoop swap over to that model. Right. So in the interim, maybe intentionally set aside a pool of money that can be used. Purpose where people's time could be, you know ascribed to that budget instead. there are two things that I want to finish this category out. People that are working in a feature factory, so they exclusively focus on product features. They never talk about customer pain points. They never talk about reducing churn or the user onboarding experience or things like that. They talk about. I need PDF in the application. I need 20 percent faster load time of these screens or whatever. They're talking purely features. The other category I want to talk about is the company that has this emphasis on doing all the planning upfront. we have to get all the requirements and we have to do it all, all up front. We have to do that all up front. Before engaging the developers, because the developers are the most expensive people in house and we can't waste our time going to meetings and talking about what requirements and vetting them out. That's why we hire BAs and project managers and people like that. Right. Yep. So these two things are kind of overlap, like the feature factory. you could not be stuck on this planning forecasting, you know velocity all the time trap that I just said, like this focus on planning, you could get past that. And you still might not get out of the feature factory mentality. But yeah, I feel if you're in the first one, you're definitely in the feature factory. Yeah, absolutely agree with that. I think that this is gold because so many companies are in this, quicksand? I guess they can't get out of it feature factory we have to so there's two different categories here. Yeah, that's like initially I think of two categories. but I feel like the company that over emphasizes on planning will always be a feature factory. Correct. But the feature factory might not. Always be the one that overemphasizes planning. They just might not know how to transition to outcomes. And they may be just simply they also ran because the competitors have these features, they have to have them right. And then in the rush to kind of leapfrog them, they just simply focused on features, get these out there. It's no validation. If the user actually needs those or not, there's no validation on how the customer you know, is using them. That that's the quickest way to escape the feature factory, add another column to your board post done through development, post deployment, follow up, measure usage. And now you're ready to attack. Without that data, you are not ready to attack this problem. you're going to be the problem in this environment. Right. Because worst case is your customers see bloat. Maybe they don't use the features you're pushing out at them. You don't even know if you're not measuring. So yeah, that's a valid point The other one that we keep talking about the people that are just simply planning and forecasting all the time I feel like Larger companies really fall foul of this more often than smaller companies do. And that's because these things become a ritual. You have to have the planning, the annual budgeting. You have to have all of these things. You have to have your forecasts. And so even if they're, quote unquote, doing agile, they still need to know. what does that Gantt chart look like? When's this release going to happen? We need to know that. And the focus there is just because it's a comfort factor, right? This release is going to happen in October. So we won't fall foul of the November holidays or December or whatever. How is that critical to me? I don't understand, but part of it is because they've always done it that way. So bad habits die hard and they have to have that, right? They have to have those plans and forecast and it's hard to let go from there. over emphasis on planning, it's probably a podcast all of its own. And it probably does deserve to be its own podcast. I might not show up that day. Cause I don't know if I want to have that podcast talking about like, because as a product manager, it's sort of the antithesis of where I make all my money during the day. I want to show adoption and usage of the features that we're working on. And ultimately that's the ROI. Right. Right. Yeah, Aside from the fact that companies are just kind of natively bad, just objectively bad at that ignoring that. There's also a culture aspect of, am I willing as a product manager to say, I put this feature out and it did not get adoption and I missed on this one, I made a bad choice. Am I willing to do that? Or do I go out and look for edge cases and stuff to hide my decision and try to disguise it? I've been with a lot of people, salespeople, VPs, executives, managers that asked for features. And then. When the feature got delivered and nobody used it, they were nowhere to be found when I was sat in the chair, like sit down, kid, we're gonna have a stern talking to you. And it was me by myself. At that point, calling like we were all misbehaving together. And I'm the only one that got sent to the principal's office at that exactly those people will if they're around even right what they will do is they will simply Play the blame game. So they'll say it wasn't built right. That's why the customer's not using it, right? Not easy enough to use anything, but they didn't validate the need right, right or the other one They got blindsided because that need morphed and your competitors served those needs better, but you ignored The customer behavior you ignored their desires wants wishes or how about this one? we blame it on we missed that requirement. We didn't it was a ba's fault. Yeah, exactly Ultimately, it is a blame game at that point They are but that's what i'm saying There's so much to dig into it with the like, when your company has this problem that we already separated the two, we said, well, you're a feature factory. Well, there's reasons you're a feature factory. And we set, we already separated that one from the, well, your company is overemphasizing planning and forecasting and they want to know when everything's going to be done and they want to know the hours of your developers The line items of every single hour that they turn like that's a different problem than being in a feature factory I feel you can be in a feature factory and still not have this problem Would you have this problem you have a lot of like you probably have the blame game going on if we say like what percentage of companies are feature factory versus outcome based, like let's just, let's just, I'm just random number out of the air, random number out of the air, I'm saying 80 20, random number out of the air. 80 percent are feature factory based. Out of that 80 percent that are feature factory based, how many have this problem where everything's got to be planned? Like 50 50? Like we're talking about a 50 50. If we go with the 80 20, it's another 80 20, I feel. I was going to go 50 50, because even at 50 50, that means 40 percent of the companies out there are overly obsessed with planning. Forecasting to a point where like that is the main like they don't care about what their customers want They want to know how long things are gonna take how much is gonna cost how much is gonna cost? That's myopic thinking and I think that's more prevalent than you think unfortunately Yeah, I'd be, I'd be again, if we ever did a podcast on this topic, specifically on this topic, I would, before we did the podcast, I would go and try to dig up some of these numbers if they're, if they are out there. I mean, I have no idea if I can, I know where you find PMI probably does surveys and stuff like that. I mean, this probably surveys out there for this anecdotal stuff. Yeah. Yeah. Okay. Well that, I mean, that's the ineffective strategic planning. Type of category now. Now let's move into another category that I like to call the narrow, narrow slash misguided focus category. So let, let's talk about the intentional misuse of statistics. Weaponizing statistics, I told on a podcast before I told you the story of the developer manager who owned the system where all the stats were kept and he wouldn't let anybody into the. System where all the stats were, he would just give you the stat you're looking for because he would go throughout outliers and make the development department pick the data he's sharing. So the decisions, like the decisions are based off of numbers and there's a quantitative and a qualitative aspect to every decision. And this is heavily emphasizing the quantitative aspect and deemphasizing the qualitative aspect, which at that point, why bother having experts in the house at all if you're not going to trust their expertise. So this, this is, this also goes back to the podcast that we had with Alex about evidence versus intuition. the intuition is your qualitative analysis and the evidence is your quantitative analysis. you need to look at the two of those things. together. Exactly. that's the key right there. We're not saying you sacrifice one for the other, right? Because they both have merit. They both have their place. So what would be an example of that? You know, maybe you are the premier player in your space, right? And customers are using your product. So in terms of adoption, your numbers, the quantitative aspect of it, It's pretty high. We had 80 percent of the market share for that specific product. Great. The qualitative would be, what is the experience like? People may hate it, but they have no other choice. Right. So knowing that really helps you, I would think. But knowing one versus the other, just like in isolation is not enough. Yeah. Oh, I was going to say it's a easy example. All social media right now. Let me, let me talk about the algorithm right quick and social media. Many times I've thought about a social media aggregator platform , one mobile app. That you pay two bucks a month, three bucks a month, real negligible amount of money. I'm talking less than four a month total, and it could connect to all the major social media platforms, Facebook, Instagram, Twitter, and, it shows you everything that people on your friends lists are posting and nothing else. No ads, no influencer content, just the people that you follow. In a timeline, reverse chronological, that is it. Dude, I'd sign up for that, seriously. And like, maybe if you're looking at a true timeline view, you can go back to wherever you last left off in the app and that will be the marker of where you start next time. Catch up from there. And maybe you get some control to say, well, do you want to pick up from last time? Or do you want to start with the newest and then reverse scroll? Like I think about stuff like that is like the user experience, the social media companies have basically taken that away from you. They say, no, we don't want you to browse like that. We want to serve you content because we think that we can keep you in the app that we can control the content that you see, as opposed to What are the people I follow posting? What are my friends posting? Yes. And right. One of the reasons why they do that is because they want to liberally insert ads in there so they can get money out of it. Right. I mean, they're there for profit. So, yeah, but the point there is like the quantitative data. The quantitative data there tells me not to do something like that. Right. Quantitative data tells me serve me. Whatever garbage you engage with that keeps you in the app, regardless of it, like how the effect on mental health or like how questionable the content is like, just serve me that. Because that's what I engage in like that's I mean, okay, that's that's quantitative data But is it really good for you or society or anybody really? It's probably not any of the social media companies could have, could have implemented something like this. It's not a technical issue., one of the companies did that when they switch over to algorithm, they had a toggle. That let you flip from algorithm view to just the people you follow. I thought it was Twitter. It might've been somebody else. And anyway, it doesn't matter. The point is they're not going to do that because that's, they don't, that's not what the money is for them because they're making. quantitative decisions, not qualitative decisions and need and they are not balancing the both of them. I don't care what they say. They're not balancing them. I have not seen one that can even come close to balance. Oh boy, you find all Brian's hot buttons on the podcast tonight. Neglecting the external environment, neglecting the, the business environment around your business. So some of these categories that we're highlighting today, they're not like In isolation, they interact with other categories. So this one, I feel like it really does interact with a company being a feature factory, because you're basically inward focus. You're, you're focused on getting stuff out but you're not really paying attention to how it's being received. So in this case, yeah, you're ignoring everything outside your own little microcosm, right? And as a result, when the market moves, you miss it. Yeah. Right. And you're still busy stamping out features, but nobody wants them. Yeah. This is on the Deming podcast. This was the we make the best vacuum tubes, the highest quality vacuum tubes in the world. And then the whole world moves to transistors within five, seven years. And now our whole not just our company. All of our competitors, everybody is dead. There's no market for vacuum. I mean, there, there's a tiny, tiny market for vacuum tubes. All the people that are, have like old COBOL programs that, that, that type of market is like, Hey, there's no market for COBOL. Oh no, that's not true. There's all these people who have this 20 plus year old government systems that are running that it's too expensive to get them out. How many of those. Like how many hot professional global development jobs are coming straight out of college. Exactly. I still have a an old preamp and an amplifier that uses vacuum tubes And the original company that made them also made tubes, of course, and they're they've gone So now aftermarket tubes are my only option then subpar quality, but they're cheaper So I stock a few just in case they go out of business. And when I can't buy them anymore, I swear my equipment is going to the trash heap, right? Unfortunately. So the, ignoring the external environment, the business market around you, like do that at your own peril, because you get to have great processes. I feel like with a lot of layoffs as well, the problem with the layoffs, there's so many of them and a lot of them have to do with. So I don't know if I want to say a lot of them had to do with greed. A lot of them have to do with the company reducing head count. Not because they're not profitable just because they're trying to improve their margins That's what it is, right? It has nothing to do with like they're not running a profitable business. They're improving their bottom line Yeah, but the idea the idea is They're trying to be more competitive in the market they're in. So what I'm saying is watch out for that kind of stuff. If you're ignoring the external marketplace, one of the other things you really run the risk of is not seeing when a new entrant in the market or one of your existing competitors is going to overtake you. Right. Right, because you really have no pulse on that. So, if somebody new comes in and they find a better, cheaper, faster way of innovating something, you're not seeing that happen. Right. You're just going to continue along your merry way, stamping out features and boom. this is a complicated one because I like to keep my competitors in the corner of my eye. I've been coupled with sales leaders in the past. And sometimes with executives, especially operations people that are used to going from goal one to goal two to goal three, real operators. And they want to have parity, feature parity with every single competitor feature. So the competitor can't, can't, they can't go wide to out compete us. So as wide as a competitor goes, we're there too. But how do you know that those features are not their worst features as in terms of adoption, technical debt you know, it's how hard it is to maintain? how do you know it's not like two dudes in India that are peddling in the middle of the night and there's not actually a feature that's working at all? That's right. How do you know it's not something you just talked about at a conference? how do you know if there's a demand? By the users for that. Is there a need? Do you know that? Have you validated that or are you simply chasing what your competitors are doing, right? That is a fallacy. And yes, there are companies that do that. Well, it is a strategy like parity with all of our competitor features

could be a strategy:

let's diagnosis. Our competitors are outpacing us with new features that are hot on the market and that people love. Diagnosis. Guiding policy. we're gonna spin up a development team to make sure we got feature parity with all the at least MVP level type of feature parity. At least like on paper type of feature parity. First pass type of feature parity. With all the big features. Coherent actions. We're going to copy this feature. We're going to copy that feature. We're going to copy it. Now we're in this, like we got this strategy that sort of sounds like a feature factory when you say it out loud, but I want to know that those features that I guess the advantage of this, we need parody with our, again, assuming our company is willing to put a bunch of money at this strategy, because that's where this all breaks down. It's all breaks down of the, the guiding policy is we need to have feature parity. So that we're not outcompeted by any of those customers. Now I expect every coherent action that you want to run out as a product manager and implement or development team and implement. I want an MVP test that tells me what kind of signal we would get if we were to fully build that feature. I want to see those results before I give you a dime to go hire developers and to go spin up teams and to go build those things. So as a strategy. I like it. let's just, put it in the normal format that we've been doing and let's move it forward, but I'm not going to compromise my value of, we need to test every Guiding policy to make sure that I'm not telling you take two motrin and keep it elevated, but I got a respiratory infection. What is your problem? Dr. Brian? You're trying to catch up with feature wise with your competitor. You're assuming the competitor has done the analysis, the needs analysis, and all of that, that these features are actually needed by your customers. Let's just go past that. If you're chasing all the time, forget about the fact that the budgetary aspect kind of hinders all this. You're not going to take a dominant position. You're not going to leapfrog your competition. Wouldn't you rather do something a little different and go figure out, talk to your customers, go figure out what they need, look at the features your competitors have. And then come up with something they don't have. So you are now leading as opposed to following. Yeah. This is the basis of market segmentation. So you're looking at what your customers are doing and then inside the market, the broader market of where your customer is doing, you're looking at segments that they are not serving or not serving. Well, yeah, exactly. Then you're segmenting the market around those things. and then suddenly the customer finds they can't compete anymore because you've segmented the market so well for that little tiny niche that they'll have to stop everything they're doing in order to compete with you They do that to fall further behind. That's where you want to be There's one other subcategory in this larger. Section I've been with a lot of technology Oriented organizations where they think that operational efficiencies and also development teams that work somehow under operations, like when they file smaller companies, they work like you kind of work for either the CEO or you work for operations. And that's really the divisions. We're like finance, HR, whatever works for the CEO and like everybody else works for operations. You get into this category of efficiency is our strategy. We're going to be able to produce 20 times that. Wait, what's the book called? 10, 10 times the twice the work. We're going to be able to do twice the work in half the time and that's our advantage. That's our competitive advantage. That's not a competitive advantage. No. But there are plenty of people out there that, that truly do believe, Oh, we can outwork our competitors. that's our strategy for success. This was a very prevalent strategy before the whole offshoring model exploded, right? People were buying cheaper talent. Onshore to try and do this and what they found is at the end of the day you get what you pay for and then the offshore model hit and now you could get Supposedly the same kind of talent for a lot less pennies on the dollar, So but then everybody started doing that and of course the consequence of that was It's no longer pennies. It's now a couple of quarters because the offshore You Well we did a podcast on offshoring. there's a whole offshoring has its own challenges when you're just looking at being as efficient as possible. And like fine, fine tuning your finances to do twice the work with half the people. And when you're putting all your effort towards this Trying to squeeze out of the sponge every little every little bit of water. Yeah. Boy, like you're missing market, like market analysis, being competitive in the market, staying ahead of your customer's problems, predicting their next problems, like finding out what the world's going to be like. Tomorrow. Yeah. Like there's a lot of stuff that you're not paying attention to , I've seen so many development teams driven with this kind of thing Oh, you need to operate with less people. And 99 point X, X, X, X, X five, five nines. And a lot of things that, oh, no, I know somebody was telling me, oh no, it was Lenar he was telling me like you have the greatest product that takes millions of dollars to scale and to run through AWS and whatever, and you have no customers. this is this category. It's exactly this category. So when you're doing this, it's not just that, well, two things, right? One is when you're doing this. And you're doing it semi well, you figure out, you have this feeling where you're getting more for less. You have that feeling. It's kind of, it's good. You know, I'm getting, I'm only spending a little bit to get more. But the downside, you're not innovating because you're not spending to innovate here, right? People that you hire are just doing what they're supposed to be doing. They're not innovating. And if you're not innovating, you're missing out. Right, you're figuring you're not figuring out what the customer needs are really you're just too busy. Just peddling it all the time That's right. And then that isn't gonna get you anywhere in the long run. Yes, right Yes, the best you can hope for is that somebody who is out there is gonna acquire you probably temporarily so they can flip that organization like a holding company would buy you hold you for a bit and then so yeah, I definitely, this is a legit thing. I've worked for a company like this where there was really no time talking about customer pain points and things like that. It was just, we know what they want. We're going to build the features they want and they will come and they don't come because by the time you get those out, and this is relatively short, a few months, not years, by the time you get those out to the market, you're done. Their needs have moved, the market has moved, new things have come about, right? So yeah, I mean, way back when I first started in this, it was with a large photo film company basically a household name, right? And they sat on their laurels. When digital cameras came about and they were small in the old days, they didn't hold much storage and stuff like that. Right. Yeah. That company didn't invest anything in this market. They're like, well, we've been around for a hundred years and people will always need photo film. Right. That changed quickly. So it catches you very like unaware. And it hits you upside the head really fast. the thing I worry about in this category is all these development teams, like they're doing a great job one day and you know, getting, getting their bonuses and performance reviews and whatnot, and the next day, nobody wants vacuum tubes anymore. And now the world has moved on to transitions and all these people are shocked and then suddenly out of a job and it's not, it's not, none of it is their fault. Right. A more harsh person could listen to this podcast, please comment below and say like, well, it is your fault because you, you always should have been in front of those customers in the first place. You never should have allowed the the, you never should have taken the backseat to all these proxy people. Salespeople and whatever, customer people, whatever. I don't know, customer success, people product operations. I'm just, sorry. I'm trying to get everyone mad at us in the last 30 seconds of the podcast. Like you should never allow all these people to get in between you, the development team and the customer. there's some legitimacy to that. I mean, it's, a little overly harsh because in larger organizations, you only have so much that you can do with the customer. There's only so much you can push back for they're just like, you know what? You're basically Sisyphus in these large companies pushing a rock uphill. most of the people that are listening to this probably don't have a seat at the table to say, this is what we should be doing. But I mean, why I want to have this podcast was we did a podcast with Nisha on strategy where we talked about how to construct a strategy. And then we went through a bunch of examples of strategies. And if you're listening to this podcast. And you've identified some of the things that we talked about that says, Oh, that's my company. I see myself in what you're talking about. I hear myself and what you're talking about. either, or like if you're hearing that here, please go look up episode 179 was the Strategy Podcast with Nisha. I encourage you, if you're listening to this one and hearing these problems, go listen to that podcast where we actually give you the framework. Maybe you are in a position where the leadership goes offsite and comes up with a bunch of strategies and comes back and says, Hey kid, like this is like, get off your butt. Cause this is what we got for you this year. And they give you your stress you know, you can't push back on some of these. But I also gave some advice of what to do in that situation So go listen to that one. It's got a lot of real tactical advice on how often to do this stuff, what you can do when you're kind of sidelined, what you can do when you are in a large organization. You got to piece together the strategy because it maybe they've got one of these other problems. Plan focus or feature focus or something like that. So go listen to that pockets. It's the companion to this one. But we really want to record this one from the perspective of these are potential things companies do instead of having successfully drawn up and executed strategies. Yeah. If you're copying things, you might as well copy down arguing agile and subscribe to it and like our podcasts. and if you know someone, if you know another product manager or development team. Or other business leaders that are having issues with strategies, send them this podcast and send them podcast 179 as well. Exactly. Yeah. And let us know in the comments below what you think of this one, the 179 podcast. And also what else you'd like us to talk about. We're always here to listen to you.