Reasoning patterns, that make unsuccessful products

[Russian version]

After a while, I'm greeting my readers again. If you haven't been one yet, I'm pleased to meet you.

During my career I've noticed, that some patterns in people's assumptions and expressions lead to negative outcome in the area of product development. I've learned these patterns, while collecting information about different businesses.

My background can clarify why I've come up with this topic. At work I'm managing the development process in a broad sense; I'm managing projects pools, and also I'm doing business analysis (2014).

Everyone, who participates in discussions of some ideas or solutions, decision makers, and managers, belong to the target audience of my article.

Today we are going to talk about how one can identify the moment, when somebody has a wrong assumption or intention in context of product development. And what the result of such a nasty situation might by. Also we are going to discuss possible solutions.

What we are talking about...

Before I begin, I want to bring one thing to your mind.

In the first case. If you create some solution and don't get any return, you've just lost time, man hours, and your money.

But in another case you get, for example, twice less than you expected (including all these cross-sells and up-sells) and invest twice more than you planned. Let it be the second case.

If your team has worked a month in the first case, we can talk about the loss of a month's budget.

In the second case you have a negative annual balance, when your planned ROI was 36%. You need about 3 years to return your investment. And it is without calculation of present value and if your monthly revenue isn't being reduced in time. I think, that three years for a software product is a huge term. And if you include these things into your calculation, you will have assumed, that you are facing negative outcome and a future with a lot of resources spent on this product or enhancement. I mean: support, maintenance, marketing etc.

Once we see the problem, let's talk about how it can become your reality.

The general picture

Look at our strategic plan before we get to the field of particular actions.

A product company has three sources of losses in prospective income and investments:

• Valueless and failed releases 
• Unplanned investments (delayed finish date)
• Inconsistent ideas

And all these groups are driven by certain drivers.

The first group is driven by:

• Wrong assumptions about problem and solution
• Important features and qualities being overlooked
• Unexpected obstacles, that block features or diminish their outcome

The second group is driven by:

• Artificial, avoidable obstacles to the team's work
• Simple solutions being overlooked
• Excessively complicated solutions

The third group is driven by:

• Failure to fully exploit the existing marketing mix and product mix
• Failure to recognize the right priorities from the opportunity list

In a nutshell, committing anything from this list drives your losses of prospective income and investment. But you see: all these things are very abstract. They don't tell us what to do. So, let's go into more details.

“We know everything about the market”

Let's take a simple example, that I'm sure you know about and know, that this case requires some special attention during consideration.

Assume, that you have a conversation about some idea. And one of arguments sounds like: “We can use such a decision without any additional research, because we know everything about this market/customers already”.

There is a general pattern in this expression: people hide details under cover of some generalization and a vague reference like “everything”.

The most harmful case is when people imply something like:

• “We shouldn't collect marketing data to make a decision” 
• “We don't need statistical or analytical data to make a decision”

Consequences are clear: the team has little data. The team has outdated data. The team generates wrong assumptions. Thus, the product you will get solves a wrong problem for wrong customers by a wrong way; this product misses really important things and bumps into unexpected obstacles, which might diminish the outcome of the solution. So, this assumption can feed all drivers of the first source of losses: “Valueless and failed releases”.

Now you can finally see, what we are going to talk about, and we can move to more complicated cases.

You also can look at the CRT that provides you with the logic, that links patterns I'm talking about with the negative outcome, that we discussed at the beginning of the article.

“I know better than my colleagues”

The second pattern is more complicated to identify, because very often it sounds natural and has some at least historical proof. To be honest, it is one of the hardest patterns to control from my own list.

You can find the symptoms of the problem among explanations like these:

1. “I'm trying to help you notice more”.
2. “I know better, because I'm more experienced”.
3. “I'm responsible for that”.
   But more often it comes in rhetoric like this:
4. “It is a better solution, because your solution can/can't lead to some kind of a vague issue/possible outcome”.

Actually, probability of the outcome or peril mentioned at the 4^th bullet is usually low and the negative or positive results are negligible.

Danger really comes when a person who behave like that isn't involved in a day-to-day basis in the activity that she tries to regulate or improve by her solution. And it is a condition when you should be really alarmed.

However, as I mentioned before, It is tremendously difficult to identify this behavioral problem, especially after yourself, and acknowledge it.

Among other things, I can provide you with a simple logic: it is stupid to steal experience from the people, who responsible for the job, they do; and it is more stupid to share the responsibilities, that are not yours and actually lose ability to ask particular people about results.

The linkage to the negative outcome we mean to discuss is not so obvious. But it is still there. First of all, you can make the job of other people more complicated, because your solution can be good but outside their experience. Thus, you can get less results with more time.

The second issue is more harmful. Because, when one influences product or marketing decisions, she misses insights and intuition, that are owned by people who deal with the market, raw data, and customers, on a day-to-day basis. It can easily lead you to the issues discussed in the previous pattern – the decisions are made with less knowledge about the market.

I would be glad if you write a couple of words about your personal experience with this subject in the comments.

“We are clever than our customers”

The most strange thing, that it can certainly be true. But if you make things that seems simple for you, you should remember, that they can be overcomplicated for others. And it won't be your advantage, because you can create a product, that is complicated for studying relatively to your target audience.
On the other hand you should always be careful. You could see a lot of similar businesses, or you could even have such a business in the past, but you can know nothing about a certain customer or group of customers. So, you should always listen to your prospects, and always rethink their situations.
Thus, you can miss immensely important qualities for almost every product: usability and learnability. You can come up with wrong assumptions about your customers. Also it can be a variety of the patter: “We know everything about the market”. Therefore, we are still driving valueless and failed releases.

“We should think only about the market”

If you have a team and there are a few good specialists among them, it doesn't mean that you can easily succeed with any idea on any market from your industry, or even with any idea on your market.
There is a good simple instrument, that can clearly explain both the problem and the solution. It should be never forgotten. It is called SWOT analysis.
About consequences: People begin to make things, that are excessively complicated for them. While there can be enough simpler opportunities, that have comparable possible outcome. Thus, they get less result with more time and miss easier solutions.

“We must do it... this way...”

The next one pattern, can be easily identified by the phrase: “We must do it...”. The things become more complicated, when it is burdened by extension: “this way...”.
There are a couple of variations:
1) “I've read from that cool book...”
2) “I feel, and I'm absolutely sure...”
The most funny case is, when people find themselves with a solution, they want to implement. Than they find out a problem to use this solution, than they come up with it and tell you about their great idea. This case usually is not so easy to identify, because it looks and sounds like a quite consistent one for others.
Consequences: one makes life of other people in the team more complicated, but they ends with the same or worse result. Because a particular instrument or solution usually doesn't make significant difference, among the similar instruments or solutions. I should note, that it doesn't mean, that you don't have problems or potential capacity, that could be solved or extracted with an appropriate technique. But it is a matter of serious fitting between your context and a particular solution. And the majority of cool techniques and instruments won't improve your bottom line if they don't address your particular situation.
On the other hand, “We must do it” leads to solving of wrong problems by wrong ways.

“I have a great idea...”

It can be really great! But the company have a product mix, a marketing mix, and a pool of ideas. It means, that the great idea can lose the day, because it is excessively risky, it requires additional efforts to provide a decent marketing for it, and it can end being not so cool in comparison with others.

So, we continue, achieving the goal of our conversation: company makes less money, making something inconsistent with things, it has.

“It is very important... but we don't have time/resources on it...”

Some people conclude something like this, and launch or continue development of some idea. Usually they talk about an expensive, but obviously required feature or quality. Sometimes, they talk about something, that was missed during previous stages of development or planing.
From my perspective it is a point to reassess benefits and look at this thing from its new estimated value for the company. If value has been diminished drastically, I think we should talk about the acceptance of the losses.
To be honest, it is hard to resist desire to complete something, if it is started. But one should be honest with herself - a product or an enchantment without some requirements are valueless.
Thus, it is obviously one of the drivers for worthless releases.

Santiago the old man

We all know the story about Santiago the old man, who had fished a big marlin, but before he came to the shore, sharks tore the fish.

We all have a great ideas or desires to help people, but our own and others' internal sharks are waiting just around the corner. There is no any bad purpose, when somebody releases one of them. Usually it is a side effect of some habit or even a good indention. It should make us to forgive, but shouldn't make us to keep things as they are.

Solution #1 - natural

First of all, there are people, who tend to ask questions, among us. I mean wise questions when somebody uses one of the mentioned patterns. And it's a good idea to have such a guy around. Even if questions, he or she asks, aren't convenient for you. But remember Socrates ended up, drinking poison.

Solution #2 – standard

The second solution is a standard one: team should be data-driven and make decisions only relying on numbers. Also it has to have a set of questions, that should be answered to describe financial prospect of an opportunity. And the third and the most important ingredient is: the team should steadily follow these rules, even if somebody disagrees with a resulting plan. And as far as I understand, a lot of successful companies have something like this inside.

But we shouldn't mixed up overcomplicated bureaucracy and formalities, that prevent company from growth, with an adequate and balanced system of key indicators, checklists and decision making practices, that allow to manage company consciously. Because it is easy to create something in itself from beauty of math and formally organized process.

Solution #3 – logical

The third solution is: one can use the framework, I've just proposed, to identify assumptions, that should be additionally considered and rechecked. Of course, if you are going to use it, it is better to extend it with your own specifics and experience.
There is a number of implementation options for a mass use:

• You can just begin from yourself, no matter what is your role in discussions.
  
• It can be introduced as a funny game: “Find more professional meta-model flows”
  
• It can be implemented by formal and informal leaders as some kind of visible behavior. People tend to replicate their leaders.
  

A long term goal is to create some kind of questioning culture inside the company.
One of the primary enemies, who pushes us toward making decisions based on patterns, we've discussed, is hurry. But if you upgrade all “bad” assumptions in your assessments with considerable amount of risks, you can reduce the amount of projects, you are working with, for some time.
Finally, fewer projects with pointless risks, less hurrying, more data, more valuable projects – profit.

Conclusion

Of course, there are a lot of other factors, that influence destiny of our works. But, when there is so simple thing, that can improve situation, why don't we pay a bit of our attention to it?

Links

Meta-model (NLP): http://nlp-mentor.com/meta-model/

A systemic view on product management: http://www.product-arts.com/resourcemain/articlemenu/22-ppframework

Current Reality Tree (CRT): http://www.dbrmfg.co.nz/Thinking%20Process%20CRT.htm