Adam Thomas | Product Management Expert

Author: Fiverr

  • Why projections fail — and what to do instead

    Why projections fail — and what to do instead

    Projections are useful because they give the rest of the organization a concrete idea of what you’re working on. Unfortunately, they can also set unclear expectations and raise questions that go unanswered. But a better tool exists.

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    Photo by David Pupăză on Unsplash

    We don’t know what is going to happen.

    Let me repeat it.

    We don’t know what is going to happen. 

    So, why do product managers (PdMs) plan as if we do when it comes to our strategy documents? In a previous article, I mentioned the trap that most roadmaps fall into. They give the rest of the company a time, date and feature. The plan usually ends up disappointing the business as a whole, though, as the date and time must often be moved, and after release, the feature doesn’t perform as promised. 

    The way to step out of this trap is to acknowledge the ambiguity of product management and tie the outputs, like that roadmap, to the outcomes you want. Turn the phrase “We will build feature X” into the goal, “We want to drive our customers to do Y.” When you do so, you train the business to give product development the flexibility it needs to solve problems instead of just delivering software.

    PdM’s affect the decision fitness of a company. If we were simply keepers of the roadmap, the job would be simple enough. The thing is, we aren’t. And roadmaps aren’t the only place where PdM’s fall into this trap.

    Let’s take it up a level. Managing strategy means we have to work on the way it’s communicated throughout the organization. Unfortunately, when product managers talk about strategy and explain where the business is going, we can fall into the same trap we do with roadmaps. We tell the company that we have a projection for the next few quarters. When we say this, we then watch the brows unfurrow, safe in the knowledge we get to live to fight another day.

    So, this all sounds like a win, right? Well, projections are great until they aren’t. They’re susceptible to the same problems as feature-based roadmaps. You’re selling a one-way trip to the future, except you aren’t Doc Brown. It’s not a matter of if you’ll blow up, but when. And although one or two small explosions may not make people freak out, do it enough, and at best you’ll sideline the product team. At worst, you (and maybe your whole team) will be tightening up your resumes. 

    So, let’s talk about how to keep the positive aspects of a projection while giving yourself the flexibility to shift when you need to. 

    SCENARIO PLANNING

    In product management, scenario planning is a way to address the shortcomings of simple projection. It presents multiple possible futures for a business and invites stakeholders to participate more fully in the product team’s strategy. Scenario planning involves making various assumptions about what the future will hold and how your environment will change over time. You lay out the scenarios that could happen, the risk/likelihood of each one happening and what factors can trigger them. 

    So, What’s the Alternative?

    Let’s go back to product calculus. 

    Remember that we have to respect the ambiguity of product management. I still haven’t found the person who was right on the first, well, anything: not on the first piece of research, software package or product roadmap. Any solutions that end up working long-term may have the right general idea upfront but usually require some iteration to be perfected.

    The problem with using a projection is that it only gives you one shot to get things right. Much like a roadmap, as much as we tell ourselves that we’ll be able to make changes, once we put a projection out there, changing it is virtually impossible. What you say gets disseminated throughout the organization, and people play telephone. Once it’s out, you can’t put the genie back in the bottle. 

    So, why not just ditch projections altogether? Well, not having one is even worse: The rest of the organization doesn’t know what you’re thinking. If they can’t see anything coming from your team, there’s a slim chance that they’ll actually use your strategy.

    If projections turn into traps, but we still need them, then what’s the best way forward? The answer is scenario planning. 

    Scenario planning involves making various assumptions about what the future will hold and how your environment will change over time. You lay out the scenarios that could happen, the risk/likelihood of each one happening and what factors can trigger them. 

    The Ups and Downs of Projections

    Projections are popular because they give organizations a vision of the future that’s tangible, future-forward and trackable. Those are positive qualities that you’ll want to retain in your shift to scenario planning, so let’s take a look at what that entails and the associated problems. 

    TANGIBLE

    Getting everyone in the company to read your strategy is a difficult task. As much work as you do to get people to engage with it, they often don’t. That means you need something concrete that will stick in people’s minds, even when the strategy document itself doesn’t land with the audience. 

    Projections are a great way to do just that because they give teams an easily summed up idea. It’s one point, and you can pop it on a slide and then go to sleep. Unfortunately, that simplicity is a trap. All it takes is a few slips of that projection, and people start to tune you out.

    FUTURE-FORWARD

    You need to show everyone that you’re looking to the future. Owning the decision fitness of the company is always forward-looking, even if we need to research the past heavily to get better at looking into the future.

    When you make a projection, you tell a story that sheds light on a particular future, but it hides many things that build to that future. You end up unintentionally obscuring the risks.

    TRACKABLE

    How do you know what’s changing in the market, the customer base or even the company itself? Projections provide something you can go back to in order to get an idea of what has changed.

    The problem is that you usually only get to pick one, and unless you pick well, you are hiding too much complexity. By showing only one metric or idea, you obscure the path it took to get there and increase the risk of outright failure. The right metric can lead people in the right direction, but unless you are an expert and know the domain and customer in an otherworldly fashion, you are going to get this wrong eventually. 

    Now, let’s make this real by looking at a projection-based organization versus a scenario-based one. 

    Projecting Into the Future

    Let’s take a look at the company BobCo, looking to plan its second half of the year. The business is looking at product development and is focused on getting the outcome they need. 

    So, their head of product, Keith, decides to make a projection.

    Before he creates the projection, he first does all the necessary leg work. He contacts different groups to get their perspectives, digs into the market intelligence and talks to the executive teams to get an idea of where they think the vision needs to go.

    He sits down and, keeping his eye toward the future, makes a slide deck to show the company leaders at the next all-hands. The deck outlines the projections for the next quarter for product development, how they tie to the strategy and what that means for the future.

    So, he goes through the slides and carefully details all the important factors in the projection. He includes the risks the team faces and the markers they need to hit to make their targets. With that said, he puts a single goal on the screen.

    “We will reduce churn by 1.5 percent over the next two quarters.”

    Everyone applauds, because they feel like they knew where they’re going now. The projection works.

    Except.

    Once the meeting is over and the leaders return to their individual teams, they only remember one thing: the churn rate. Everyone thinks, “Oh good, product is going to reduce the churn rate.” Nobody sees the role they have to play here. They see this metric as a promise rather than a goal.

    To everyone in the meeting, the churn rate became tangible. But they didn’t remember the risks that were associated with making that goal. You see, that was just another slide on the way to the projection. As a result, the risks were obscured. Same thing with the larger story Keith told; it was just in service of that 1.5 percent metric. All the associated opportunities were lost as well. 

    Teams don’t know what they need to do, or even how to understand what keeps them off target. They can’t imagine any alternatives, or track any of the changes that might happen.

    When teams aren’t aligned with the strategy, you’ll find that when they run into roadblocks, they’ll just guess about their next step. Those guesses vary wildly and can end up slowing down or, even worse, reversing progress.

    So, while the team had some alignment around the ultimate target, by the time Q4 ended, they found themselves only a third of the way there. Everyone then wonders what they could have done differently and when.
     

    Planning Scenarios

    Let’s take a look at BobCo a year later. They’ve decided to scrap the projection approach because it didn’t work last year. They also didn’t understand why they weren’t able to communicate when things broke down. 

    The company needs flexibility. So, instead of projection, Keith chooses scenario planning. 

    Not surprisingly, the company has the same goal as before: to reduce churn.

    Keith prepares the same way he did last year. He talks to everyone and gets their thoughts down. He includes the tangible anecdotes, the items that are future-forward and figures out how to track everything. 

    Where he changes his approach is in how he outlines the slides and the assets he produces. Before, the presentation built up entirely to the big finale: “Reduce churn by 1.5 percent.”  This time, though, he wants to bake in flexibility by clearly tying the outcome to a set of conditionals. His slide now says the following: 

    “We’re going reduce churn by 1.5 percent by the end of Q4 IF”

    • The market trends continue as marketing predicts, letting us activate more customers.
    • Our engineering team has the freedom to leverage outside resources to build better.
    • HR consistently grows the headcount at the pace they’ve done for the last few quarters to continue a fresh influx of ideas.

    The “IF” is important, as it invites people to be active participants in the plan instead of passive listeners. Now, their brains are moving. They can see that the goal isn’t guaranteed after all. 

    The job isn’t over, however. He goes on to add a bit more context to those three bullet points.

    OPPORTUNITIES

    • The market trends continue to jump by 10 percent as marketing predicts, letting us activate more customers than last quarter by 15 percent to keep up with our place in the market, AND
    • Our engineering team has the freedom to leverage outside resources by bringing in a consulting team for less than 2 percent of potential profit to build better projects that will increase our upsells by 15 percent,  AND
    • HR consistently grows the headcount at the pace they’ve done, maintaining our hiring targets at an 80 percent hit rate for the last few quarters to continue a fresh influx of ideas.

    THEN we will reduce churn by 1.5 percent.

    The AND establishes a story here. Whose roles are important? Well, the company now knows what product needs from marketing, engineering and HR. This is already more useful than just a statement about reducing churn. 

    These AND statements also set the stakes. If the company can’t do all three of these things, well, product isn’t going to hit the churn numbers.

    So, what happens then? Keith’s presentation also lays that out:

    “If we don’t hit our targets, we will”

    • If we run into issues in marketing, engineering or HR, and we can’t recover by week three of Q3, we will revise our churn number to 1.25 percent and adjust our internal messaging. 
    • If it is past week three of Q3, and we revise the churn target, we will shift to our secondary target, increasing pricing to adjust for our loss. In this case, we will shift our teams and provide more support to marketing and pricing.
    • If we are failing with all three requirements, we will stop everything and reconvene to stop the bleeding. Our teams will be made aware, and we will call a town hall immediately. 

    With these statements, what was fuzzy before is now tangible, future-forward and trackable. Even better, Keith has added flexibility with the next step predetermined in each case to keep everyone moving forward.

    At the end of the quarter, the team ended up shifting to pricing. They’re able to do a proper post mortem to find out that the churn target was too ambitious for several reasons. The next time they do scenario planning, they’ll be able to iterate and get even more precise. 

    Use Scenario Planning

    Strategy is complicated and ever-changing. We need tools that can help us make the most of the time we have with our teams and equip them to do practical work.

    Projections are tangible, future-forward and trackable, but they come loaded with risk. Derisk them by switching into a scenario planning model. Not only will you get the same benefits, but you’ll also train the organization to think about what-ifs and be more open to the ambiguity that comes with product management.

  • Transparency in the workplace: effective teams don’t keep secrets

    There’s a difference between privacy, which is based on trust, and secrecy, which isn’t. To maximize your team’s potential, you need to foster privacy and eschew secrecy.

    white and black diamond shape illustration
    Photo by Wilhelm Gunkel on Unsplash

    Our mental spaces are fascinating. Sometimes, we may keep certain information to ourselves because we know that we’re trusted to complete a task. We don’t need to involve anyone else in our work. Other times, we may hold things back because we know that we aren’t trusted at all. Silence is a self-preservation strategy.

    In both cases, though we did the exact same thing, the meaning was completely different because of the wider culture we were in.

    This schism reflects the difference between privacy, which is based on trust, and secrecy, which isn’t. As a leader in whatever space you’re in, you need to understand whether you have created a privacy- or secrecy-based culture in order to understand the communication patterns inside of your organization.

    Your communication culture has a huge impact on the rest of your business. Cultivating an atmosphere of trust is essential for success. The level of trust people in your organization place in leaders and one another affects productivity, the health of teammates and long-term employee retention.

    You need to understand the difference between privacy and secrecy so that you’re not letting the latter shape your company’s culture. In fact, you may accidentally be pushing folks toward a secrecy-based communication pattern now. Fortunately, several tools exist for fixing this situation and getting your team feeling comfortable again.

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    Privacy Versus Secrecy

    The differences between a privacy-based culture and a secrecy-based culture go deeper than the surface. Company culture affects everything it touches. To get a sense of how this works in practice, let’s look at a hypothetical product development team making a feature and how it might work in each culture to highlight the differences.

    PRIVACY-BASED PRODUCT DEVELOPMENT

    The cross-functional team confirms the plan for tackling their goals in the next quarter. They then set up a meeting cadence to check in, and they make clear communication rules in a public channel so the rest of the team can keep up with each other when there are questions.  Backchanneling is nonexistent, and there aren’t many questions because micromanagement is at a minimum. The group identifies problems as they come up, brings them to the attention of everyone on the team and discusses them publicly.

    SECRECY-BASED PRODUCT DEVELOPMENT

    The cross-functional team confirms the plan for tackling their goals in the next quarter. The design team doesn’t trust the engineering team, so they don’t mention that they have a secret project to build a design system that will cut into the larger project. Engineering keeps their refactoring secret from product because they are tired of being “bothered.” Meetings are on the calendar to check in, but no one takes them seriously because all real communication goes through backchannels, and anything public, including the meetings, is just theater. Teams may identify problems, but they aren’t dealt with because no one believes they’re actually going to be solved. As a result, work slows down and management starts micromanaging to solve the issues. The micromanagement makes teams retreat more.

    Unfortunately, from what I’ve seen, the latter scenario is closer to reality for a lot of teams. Let’s see some things that may lead to this kind of culture.

    What Pushes Secrecy Culture?

    Although many factors contribute to a secrecy culture, they all boil down to a lack of trust.

    If I don’t believe that other members of my culture have my best interests at heart, I may decide to keep as many secrets as possible to prevent information from being leveraged against me. As human beings, our first instinct is to survive. This strategy makes sense as it’s kept our bloodlines around long enough to get to the present day.

    Many of the behaviors in the secrecy-based example lead to a lack of trust. Let’s grab the two that I highlighted: backchanneling and micromanagement.

    Backchanneling occurs when one person talks to someone else privately about strategy or execution. What makes backchanneling so insidious is that it starts off innocently. I think I’m just open a Slack DM between me and someone else to talk about something small. Unfortunately, it rarely stays that way. Soon that chat goes from a quick question to talking about the project, which then turns into making plans that exclude other people. Small things that you think no one notices can’t be kept under wraps for long though. People sense when they’re being left out, and, soon, folks get territorial.

    Micromanagement involves someone in leadership looking to stay on top of everything someone is doing, no matter how minute. Micromanagement starts as a leader trying to help. Suddenly, what was once an attempt to pitch in undermines people and kills their confidence. Their productivity may experience a short boost before bottoming out. Other people close to those being micromanaged will also lose confidence because they worry that the manager is coming for them next.

    Both backchanneling and micromanaging are easy to identify. When there are different answers to the same question, that’s the result of backchanneling. When you see clones instead of people, it’s a sign of micromanagement. The good news is that once you see these trends emerging in your team, there are some concrete steps you can take to roll them back.

    Moving From Secrecy to Privacy

    If you identify some of these behaviors in yourself or your team, don’t fall into the trap of saying, “We’re stopping this today!” If the culture is already damaged, you have a high probability of making things worse. Your decisive action will cause everyone to fall back into the same old habits. People will see the new plan as micromanagement and find their cliques to discuss what they think is really going on. Instead of taking drastic action, then, it’s worth taking time to do an investigation. Here are two tools to do just that.

    RETROSPECTIVES

    A retrospective is a way for a team to publicly talk about the issues that they’re facing. Teams are probably already aware of project retrospectives, but the useful type here is the variant called team retrospectives. These meetings are designed to give the team’s operational dynamics a postmortem. The first time you run one of these, you’ll notice surface problems, like teams having issues with each other, pop up. If you can, solve the simpler problems by making sure the right people talk to each other. Many issues can be handled with a conversation and a simple output, like “Next time we’ll talk with each other before we start work.” It’s important that once you get these things in motion, you ensure that the stuff you’ve discussed is actually happening. Follow-up is important for building trust. Eventually, you’ll see people bring up the deep-seated things that are making your culture secretive, and you’ll have a path to making it better.

    ONE-ON-ONES

    One-on-ones are a tool to help managers understand their teams by talking to the individual members privately. Both the manager and team members should use this time to talk about what’s going on in the company at large and how that person can improve in terms of individual contribution. Remember, managers micromanage because they think exercising complete control over everything and everyone works. We know that it doesn’t; good managers trust their teams to get things done and ask questions of team members to understand motivations. Being in a place where you can talk directly and frankly builds trust and helps to make things better.

    Neither of these methods works overnight. What they will do, over time, is build stronger connections between management and the teams/team members themselves. As a leader, you’ll be able to see problems and get to the root of them. Remember, if your culture isn’t trustworthy, fixing it will take time.

    Give People Privacy

    As a manager, you must create an environment where people can feel like they own their privacy.

    Tools like retrospectives and one-on-ones will go a long way toward building trust throughout the company. Getting away from backchannels and micromanagement will get you closer to an environment in which people feel confident and will handle any problems as a team.

    Feeling better about where we work often leads to productivity gains and a better bottom line. Take advantage of that by starting with these tools today.