Companies that struggle with articulating why their products exist, what value they deliver for their audience, and how they are organized within the broader ecosystem will find themselves stalled at the starting line of innovation. I was recently brought in to establish an Agile-based product practice for such a company. They had previously undergone an unsuccessful digital transformation where significant resources had been invested in defining and organizing what resulted in an overly complex portfolio of products.
During my onboarding investigation to understand the current state, no one had a complete picture of what all of their products were and no one seemed to be accountable for keeping track of them all. And yet the organization had gotten extremely comfortable with pointing at a set of features and deeming it a “product.” After uncovering more than 50 of these “products,” I honestly stopped counting. These PINOs — Products In Name Only — were everywhere and hidden throughout the organization.
Why Identifying Your Products is Necessary
The company I was working with was not nearly large enough to support that many products. Products were everywhere yet no one was accountable — no one was minding the entire store.
Not only were these products ill-defined, but there was also a lack of understanding of who used them and what (if any) value they were delivering — both of which are vital for managing ownership, the backlog, and the budget to cover the supporting resources. Because of the heavily integrated nature of all these products, a lack of group coordination meant duplicate functionality was constantly being built while sizable gaps were left unaddressed. To add insult to injury, conflicting code was being deployed at will without quality assurance testing across the dependent systems and without following a defined release process.
This approach caused frequent breakage resulting in serious outages across critical services and costly downtime for internal and external users. Even when identified, fixing these issues was no small task due to the vast levels of bureaucracy and historical institutional inertia.
Let’s Start with Defining “Product”
Let’s say you find yourself in a similar situation. Where do you start? With a simple and neutral definition that applies to any business in any industry, summed up as succinctly as possible: “Products provide VALUE to a PERSON.” And that value should be sufficient to warrant the time & resources required to manage “business as usual” or even invest in improvements. As you examine your product portfolio, if any product didn’t pass this simple litmus test, the immediate follow-up questions would be “Could this ever really be considered a product? What would have to change?”
Examples of products are wide and varied. They can be physical or intangible (or a blend of both):
- Professional Services delivered between human beings such as accounting, plumbing, or product coaching.
- Physical goods & hardware that reduce manual efforts such as a motorized drill, an oven, or a car.
- Intangible software & digital tools that reduce manual effort or that automates work, such as workflow applications, lead generation websites, eCommerce platforms, or operating systems.
- Or any combination of the three resulting in offerings such as the popular Software as a Service (SaaS) model, Internet of Things (IoT) devices, and consumables like digital media (videos, music, games).
Depending on the scale or scope of your digital offerings, each individual product might simply be a subset of capabilities (e.g. user authentication/authorization, checkout/payment processing, inventory tracking, or shipping logistics) within a larger platform. And that’s okay. The common theme across all these examples is that, if all the other related products or functionality were stripped away and no longer tied together, would the “product” still provide sufficient value to stand on its own legs?
There’s That “Value” Word Again
If the test of a true product is all about delivering a sufficient stream of “Value” to an audience, then what does it really mean? In this context, value is a shorthand way of talking about the benefit delivered to the person (or people) using the product. In order to understand how much value the product is providing, it must measurably solve a problem or satisfy a need or want for a user. Applying the definition more broadly, a product is anything you offer which encompasses the people, processes, and technology assembled to solve a need and provide a benefit to a market in exchange for the business to receive a return.
“Value” (with a capital “V”) measured becomes a form of currency that is frequently, but not always, exchanged for money. It is important to note here that while a product can be associated with a P&L, it isn’t required. When tying a product’s delivery of value to revenue, the formula for a favorable ROI becomes all about maximizing one or more value streams which will, in turn, maximize a stream of revenue back to the business. But even when a product is not directly associated with a P&L, it should still provide tremendous non-monetary value to an organization in terms of operational efficiency, user satisfaction, or insights generated.
Consistency is What’s Most Key
Lacking a consistent product definition muddies the waters of ownership, accountability, and how to decide where to invest to increase value delivery. When products lack this definition, everything begins to look like a product and people throughout the organization end up calling themselves a Product Manager — yet operating in a vacuum without the benefit of clearly defined roles, the center of excellence, or a community of practice.
While there’s no single “right way” to go about defining your products, being consistent within your organization is what is most important here. Take a step back and put some structure in place by laying out ground rules to first determine why each product exists and then how they all function together as a cohesive whole.
Organizing Your Products Into a Portfolio
Once you have your products defined, it is time to get the whole product house in order by organizing them into a portfolio. This organization is an influential reference point for the mitigation of dependencies and understanding of integrations necessary to eliminate downtime due to critical outages.
So in order to wrangle those 50+ products, we had to re-evaluate the connective tissue between all products within the portfolio and articulate how pulling on one string affected multiple other products. Diagramming their portfolio with a product taxonomy helped everyone finally comprehend the entire ecosystem of capabilities across the entire enterprise. And this structure ultimately helped answer where the products sat within the organization and who was accountable for managing each.
In the end, applying a consistent definition and conducting an organization exercise helped the company whittle down the 50+ PINOS (and their “product managers in name only”) to land on a more manageable 12 products structured around their respective audiences and owned by the business units supporting them. Resolving this issue and having the structure understood by the entire business was just the first step in the path to accelerating the adoption of a product practice