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Digital Disruption with Geoff Nielson
Marty Cagan Explains How to Design a Product Like Steve Jobs
00:56:06
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- [00:01]
A
I'm super excited to be talking today with Marty Kagan, founder of the Silicon Valley Product Group. Marty is an all timer, one of the greatest product management gurus of all time. We're going to talk about the state of product management today and what it takes to build the product centric organizations of the future. It should be an amazing conversation. Can you tell me a little bit about the state of product management in 2020? Like where, where are we right now? What's going on?
- [00:31]
B
Well, I would say we're in a pretty fundamental shift going on right now. Mostly of course by, because of generative AI and how that is not so much yet, hasn't really changed things yet. But many of us, myself included, do anticipate more significant impacts over the next few years, probably over the next five year time frame.
- [01:03]
A
So let's maybe dig into that a bit more and start there. So within the context of product management and the product management processes, forget the actual products for a while. How do we see AI changing the game? Where is it now and where is it going?
- [01:21]
B
Yeah, the reason this is kind of a very messy question is because there are actually three very different models of product management out there today and have been out there for honestly 20 years. So AI impacts each of those differently. And it's a very almost religious topic with a lot of people. They kind of have their favorite of the three, but sort of taking religion out of it to the degree we can. There are these three very different models. One of them is sort of more dominant in Europe and it's referred to as the product owner model. Another one is very dominant actually in the US it's referred to, I refer to it as the feature team model. And then there are the form of product management that's used really by the top product companies in the world. And I refer to those as the empowered product team model. But each of those three are pretty fundamentally different. The roles they play not only on the team but in their companies. In fact, the role of innovation in their companies is very different. So because of the different contexts, the different needs, there's very different responsibilities they have. And based on those responsibilities, the new tools, that's the biggest impact really of these generative AI technologies. When we talk about how it impacts people and teams on product teams, it's very different in some cases. I think, especially in that first of those three models, I'm very, I think it's entirely likely that those role, those jobs will be largely disrupted. I have been trying to, I have a lot of friends actually Hundreds of friends that are in that model. And I'm trying my best to encourage them to upskill so that they have a future in that role. Of course I could be wrong and I, a large part of me hopes I'm wrong about that. But I think the writing's on the wall for that one.
- [03:48]
A
So why is it that the disruption is primarily hitting that product ownership model? What about that model is unique to that? And what does that upskilling look like in your mind?
- [04:01]
B
Yeah, well, fundamentally the difference is the product owner role is a much more junior role, a much lower level role. Just like today. I mean pick any headline in the technology space and you'll see very likely that the more junior engineers, developers are already feeling threatened and in many companies they've stopped hiring that level person. On the other hand, more senior people are making more money than they've ever made because the companies realize they're actually more valuable, not less. So there is a just disruption happening on the engineering side. I think the same thing is just starting to really happen on the design side and in the product side. We don't map exactly to that same sort of spectrum, but it's comparable. And the product owner model is a very, it's a much more junior and a much more administrative and a much more project management like role. And so these are things that the tools, I mean I've been asked to look at I don't know how Many more than 20 prototype tools, beta tools, and this is the easy target for that. So this is sort of where I think they're starting. So yeah, I'm genuinely worried about that. And there's more to it, always another layer. But that product owner role is tied very much, not really to product management, but to process. And process is increasingly people are realizing that's really not the solution and there's a lot of baggage associated with that. So there are other factors at play for that role, more than just generative AI.
- [05:57]
A
So is it fair to say that as process becomes more streamlined, more automated, that you know, as these roles look to upskill, they need to start becoming more visionary. They need to start be more forward thinking in terms of like what could the future of these products be? And you know, how like really sell that kind of product model at the firm level versus being tucked away in a corner? Is that, is that I do.
- [06:28]
B
I mean in the, in the product world, each of these, for each of these terms has very specific meaning. So the visionary side is really the leadership role and that is like you're alluding to that is increasingly important. But even at the individual contributor level, there is always some mix of strategy and execution. And the jobs that are really at risk from this disruption are the ones that really are all about the execution. And what it points to is. There's a big question though, and this is what the more advanced product managers focus on. The question of really what to build, not how to build, but what to build and what problem to solve for who and how. And these are difficult decisions, very subjective decisions, and a lot of judgment goes into them. And that's where the more experienced product people have a very large advantage.
- [07:33]
A
Right. So what does this look like in the middle model you described, the feature model that's more popular in America? What does that look like in that model and what's the threat level?
- [07:48]
B
The threat level, I think is a little lower than it is for the product owners, for sure. It's kind of a hybrid model. The person, the product managers in that model, they're not responsible for the level of innovation that we're talking about on that more advanced model, but they do have some. So what they are really. There's a lot of project management there. And that's the part that will, you know, project management, I think will. There is beautiful opportunities everywhere for tools to improve that. But there is still a role for judgment. There's a lot of decisions you make. And so I think the strong feature team product managers will still, I think, have more time to contribute at their companies, for sure. It's still more vulnerable than I would like. And so I encourage my friends in that role to upskill as well. Plus there's very, there's almost no innovation in that, in that model. And my view, and I sort of confess to being paranoid about this stuff, my view is if you're not innovating, you're in trouble.
- [09:06]
A
Yeah.
- [09:07]
B
Especially now. And so while I think it is more defensible as a role, it's not tackling the hard problem that needs to be tackled. So I am hoping, and I do spend a lot of my time trying to convince CEOs of companies that have that model, which is very much sort of top down, tell everybody what you want them to build, to instead try embracing the idea of technology powered innovation, try embracing this other way of solving problems.
- [09:43]
A
Right. And that's the empowered model that we're talking about.
- [09:46]
B
Now.
- [09:48]
A
Do you have Marty, within that model? Do you have any sense of firms that you consider kind of like true north for like, these are firms that they've really figured out how to be product centric.
- [09:59]
B
Oh yeah. I mean and they're not secret also by the way, it's not an accident. They're really the most valuable companies in the world right now. So you know, we're talking about Netflix. Amazon is a great poster child. Private company, Stripe, Apple is fantastic at this. Who else? You know, Tesla is actually very good at this. SpaceX is very good at this. And I'm talking about brand names that everybody would know. Obviously there's thousands of great startups that are working this way but honestly it's a lot easier for a startup to work this way. They kind of have to if they want to survive.
- [10:40]
A
Right. And they don't have to like unlearn all the bad habits or you know, you know. Yeah, the tenets about what product is and isn't. So thinking about the different models that you've got there, the role of what I'll call product leadership and maybe that's not quite the right term, but the person who's leading the product effort in the organization. What attributes would you be looking for in a product leader in 2025?
- [11:12]
B
Well, first and foremost they are the ones that, if anybody's going to raise the skill level of the people we've been talking about, they're the ones that need to do that. That is their primary responsibility to coach and develop. And in fact, in virtually every one of those companies I just rattled off, they have written leadership principles where that is right at the top of the list. Your job is to coach and develop your people so they can do these kinds of things we're talking about. So that's number one. Number two is, is really what you were alluding to before. You have to have, you have to this visionary element. You have to where is the market going in the next several years? Those are some pretty big questions, especially with so many moving pieces of this. And how will this, how will your solutions improve the lives of your customers? That's product vision that is incredibly critical. That's really what motivates the organization. That's what ties all the different teams together into creating something amazing. And that's in the product leaders responsibility. And then a third big one which is really more a function of the size of the company. The bigger the company, the more critical this is, is, is to really win the hearts and minds of the rest of the executive team. Because you really can't do what we're talking about here in a silo.
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A
Right.
- [12:50]
B
You have to do it. It impacts marketing, it impacts sales, it impacts finance, it impacts hr. And so the product leader has to make it a major priority. And it takes a different set of skills, as you know, to, to win hearts and minds.
- [13:08]
A
Yeah, no, it makes complete sense and it resonates very strongly with my experience. And, you know, I was thinking too, as you rattle off some of the names of these firms that have, that have figured it out, they have, like, executive leaders, like, they have CEOs and founders, chairmans, whatever you want to call them, that are bought into this whole product notion. Right. Like, it feels like even above the product leader, you need the whole organization rallying around it to be successful.
- [13:36]
B
You do, you know, a little interesting factoid that not a lot of people realize is that literally the founders of Apple, Steve Jobs, Amazon, Jeff Bezos, Larry and Sergey at Google, the founders, they were all coached by the same guy. Same guy. I didn't know that. Bill Campbell, he was known as. In fact, there was a book written about him called Trillion Dollar Coach. The leaders at Google wrote that afterwards, after he passed away a few years ago, to sort of attribute to him. But literally the same guy was explaining to these people, essentially the product model and why it was so important and how different it was than how most of those companies, you know, most companies in the world work.
- [14:25]
A
So, you know, being more familiar with, you know, Campbell's work, do you, I mean, can you see the. Through lines across those organizations? Like, what lessons can you tease out that. Are you, like, that's Campbell.
- [14:36]
B
See it all the time. And I, I love that. I'm, I, I met him several times, but I was never coached by him. I wish I was.
- [14:45]
A
He'd be a trillion dollars richer, right?
- [14:47]
B
Yeah. I did work for three different people in my career that were coached by him. So I felt like I grew up learning these lessons. And so that was a real gift. But there's several examples. One of them I already alluded to. He's famous for a line which is, you cannot be a good manager without being a good coach. That's one of his lines. Another one, single most important thing. And by the way, this probably, if anybody listening is like, wondering what the key to innovation really is, he argued, and I think he was spot on, he argued the single most important role, single most important thing is empowered engineers. What this means is engineers are not there just to build what you're telling them to build. There's a great Steve Jobs quote which was, we don't hire all these smart engineers in order to tell them what to build. We hire these engineers so they can show us what's possible. And that is so different than, you know, you pick your big organization that has thousands of engineers, many of which are outsourced and they're just, they're just there to build what they're told. They're never. And you know, this is obviously a, an important topic, but if you look at all the companies today turning out very impressive new enabling technology products with Gen AI, they're the ones that have been using their engineers. They're the engineers, are the ones that came up with these solutions.
- [16:25]
A
Well, and that's really interesting to me, Marty, because when you think about some of the mythology around guys like Jobs or guys like Musk, you mentioned Tesla. I feel like they have a reputation as the visionary leaders who are, we're going to do it this way, damn it. And they kind of impress on the engineers what's going to happen. It sounds like there's more to it than that and there's actually more of a back and forth behind the scenes. Do you believe that?
- [16:54]
B
It's a common misconception. Now the truth is Steve Jobs and Elon Musk are two completely different people situations. And a few years ago I thought I understood Elon Musk. Now I don't pretend to. Sure. So there's other things going on there. I do know a lot of people that work at his companies that are, you know, there. You have to realize there is no way at those scale. Just look at Tesla and SpaceX together. There's no way for him to be micromanaging all those people. It's not possible and it's really not how it works. Now Apple is a much better example because actually Steve Jobs was, he was visionary. Absolutely. But it's a really a fundamental misunderstanding to think that meant that he was telling people how to build what they needed to build. In fact, it was very much the opposite. He would expect, he would ask you and they would come to him every week with prototypes of what they think is a good solution. And he was very good at pointing out where those prototypes were lacking. Yeah. And saying like, this is not good enough. You know, we just, we cannot ship this. We cannot. And he set a very high bar. He didn't know the solutions to any of this stuff. Yeah. He just knew what would make a great product and what wouldn't. And for anybody who really. Because this is a common misconception and I think it's a really dangerous misconception because so many people think that, oh well, I'm going to act like Steve Jobs and boss everybody around but that is not how he worked at all. Anybody. There's one book in all of, in my experience, only one book out there that actually shows what it was really like. And it was written by one of the senior engineers from long time at Apple, actually the. One of the key engineers working on the original iPhone and one of the engineers behind one of the biggest innovations in the iPhone. And he wrote. His name is Ken Kasinda and he wrote a book called Creative Selection which is describing how the product discovery process worked at Apple under Steve Jobs. And with hundreds of stories and in none of them was he saying like you build this, you do this, you do this. He was instead saying, we have to figure out a way to do a hundred percent touchscreen device. And that means we've got 100 problems to solve in order to do that. And you need to solve these problems. Here's the problem. And they're not easy problems. Otherwise lots of other people would have done them. So that's more of what it's like.
- [19:44]
A
Yeah. So he would push them to the limits of what's possible, but he would let them. He would let the solution kind of emerge and have them show off.
- [19:53]
B
Not even about. I don't even think it's about letting it. He knew enough. He knew enough that he knew. That's the only way it happens.
- [20:01]
A
Yeah.
- [20:01]
B
See, honestly, it's the only way it happens. There. He. You know, since we're talking about him. There is an amazing resource that was rediscovered a few years ago. It's called the Lost Interview. And it was. It was actually recorded in 1995, which is remarkable.
- [20:21]
A
Interesting.
- [20:22]
B
Time had been kicked out of his company and it was recorded way back then. And then it was lost. It was recorded for a public television show and it was lost. The actual tape. And it was found after he died by one of the producers in his garage. And he just uploaded the whole thing. It's just over an hour. It's on Apple tv, it's on Google Play, it's on Amazon prime and it's literally $5. But it is a master class in this. And he talks about these issues. He talks about what people don't understand about how you create great products. Is probably the best resource I have ever seen out there from anyone.
- [21:08]
A
That's a really cool recommendation. I'm going to check that out.
- [21:12]
B
So I want to.
- [21:14]
A
I want to ground the conversation a little bit. Marty and I could talk about Steve Jobs all day. And it's so interesting as this kind of inspirational leader, one of the. I Spent a number of years advising executives kind of in this space, among others. And one of the most common pieces of feedback I got here is, wow, that would never work at my firm because my leaders are not Steve Jobs. And they, they don't believe in the product model. There's some sort of executive level resistance, and their default posture is just throwing up their hands like, okay, well, that can't work here. So I don't have to push myself. I'm just going to make do with the status quo. What's your advice to people in that situation?
- [22:01]
B
Well, first of all, we hear that every day. So you're not wrong as far as what they. That is so common. In fact, the reason we wrote our latest book, which is actually about this topic, about how do you transform? We didn't intend to write that book. That was not part of the real plan. But so many leaders said exactly that. They said it's not possible. It only works if you're born in Silicon Valley, you know, and you're a native company, you grew up this way. You. And of course we knew that wasn't true because for 20 years we've been working with companies all over the world to do this. So we knew it wasn't true. But this is the prevailing opinion of so many people. And, and it's understandable too, if you've never actually worked in a place like that. You, you don't know, you just like. And there's of course, hundreds of legitimate objections to anything. So unless you have good answers to that, you go nowhere. And in fact, there's a long history of companies hiring places like McKinsey and others and wasting the money. It doesn't go anywhere. So the track record was not good. So we said, all right, this is kind of ridiculous. And what we're going to do is share real stories with real names of real companies and real people at those companies, none of which are Silicon Valley companies that have all been big old companies that had to change everything. And not only did they change, but look what they were able to do once they changed. And so that's why we added up, we added a dozen case studies into this book. And I would say for there were two things we did in that book that I feel like were essential to this topic. One is the examples. And the other was we just literally enumerated the objections that everybody has, literally objections from finance, objections from the board, objections from the marketing, objections from sales, even objections from customers, enumerated them all and then wrote how they're addressed. So that. Because I found, you know, we found a long time ago, you. You can't just ignore the objections. You have to. They're legitimate objections. Most of the time. They're. They're very legitimate. A cfo, they know how things have worked in the past. They. They usually don't like how they work, but they know them. And unless you can show them a better way, they're like, they're stewards of the funds, right? They're not going to just say, do whatever. So they need. They need it to be convinced. And so we put that in there. And I would say for most of these big companies, the objections and the case studies were really the key.
- [24:59]
A
I'm really glad, Marty, you brought up Transformed, your latest book. And for what it's worth, I definitely feel like this is the right book at the right time. I love how it kind of progresses from some of the what and the why of this model to the how. And that really resonates with me. And a lot of the stuff we're doing over here, of the case studies there, is there one that stood out that you find has actually surprised people the most or resonated the most in terms of like, oh, I didn't know that was possible in a place like that.
- [25:33]
B
Yeah, well, actually, it depends on kind of where they're coming from. For example, one of the case studies is of healthcare company, giant healthcare company, Kaiser Permanente, and anybody who's worked in healthcare, most of them, like, it's impossible.
- [25:50]
A
They're like, yeah, it can't be done.
- [25:52]
B
Can't be done. And so those people were like, oh, maybe it can be done. I had no idea, you know, and so that another one is there are parts of the world that feel like they've been left behind and it's impossible for them to catch up. And we, we highlighted a company based out of Saudi Arabia. And so many people, not just in Saudi Arabia, but I just got back from Asia, and I was a few weeks before in Brazil. So many people around the world. That's the one that resonated with them because they were like, wow, if a Saudi company could do what they did, it's kind of like we have every advantage in Brazil, every advantage in China. Right? So they realized they could do it. Probably the one that's cited the most is the train line example from the uk that was an example where a private equity fund, you know how they work, they kind of buy these companies that they believe are not performing as well as they should, and they believe if they can Turn it around. This is a big payday. And that's exactly what happened. And they were, you know, there's a lot of people I think that can relate to that. An old company that kind of joined and inherited all kinds of legacy. And it's so difficult to dig yourself out of those holes. And this company, in just a few years became the biggest IPO in UK history at the time. So they, I think that one resonated probably the most so far. But, you know, it really depends on where you're coming from and what your biggest concerns are. But that's why we picked a range of companies like that.
- [27:36]
A
No, that's great. And I love that. And as you said, it feels very much like depending on what sector you're in, depending on your geography, you've got your own version of the pain you're feeling. And so, yeah, I mean, it sounds like though, Marty, in this world you're describing, it's kind of a no excuses world, right? The days of being able to say, oh, well, that would never work here. I don't know, in your mind, is there anywhere where it truly will not work or should there be a path there? Regardless of what type of organization you're.
- [28:11]
B
In, it's really hard for me to imagine a company that shouldn't work this way. But of course, unless you know every company, you can't really say that for sure. There might be. So I don't know. But I do think that it used to be more of a debate right now and when, I mean now with Generative AI, that that debate is largely going away. Now the question is different. Now the question is, can we do this fast enough? So it's, it's, it has really lit a fire under a lot of companies because for a long time it was really, if you had a competitive threat, like a company like Amazon was entering your space, then you were scared to death and then you were like, we gotta change, right? And there were always some where the investors, the board would say, if we could show where we know how to innovate, we could literally add a zero to our valuation. Because they could look at the comparables out there and see today those two things are still true, but they seem to be in the minority today. It's like, all right, things are changing. Our organization is not set up to embrace and leverage that change. And that's what the product model is all about, is doing that.
- [29:39]
A
Well, with that in mind, the thing that concerns me, and I'm curious on your take on it, is that with Genai, with this kind of current landscape, it's not even like, hey, you can add a zero. My worry is that if you don't do this, you're going to end up taking away a zero from the valuation of your organization. Is that, is that a valid concern?
- [29:58]
B
Absolutely. And people are already worried about. Absolutely. So there's really two sides to it. One is responding to the threats effectively, like we're talking about, and the other is taking advantage of the opportunities. Interestingly, I mean, Gen AI is the biggest test of our world, of our industry, for sure. Before Genai was the pandemic, of course. And the pandemic was an existential threat to a lot of companies. In fact, a lot of companies, as everybody knows, they died because they could not adjust to the new reality fast enough. And one of the things we decided to do in that book was to highlight the companies that because they had moved to the model, they were able to not only adjust, but they were able to come out way stronger. And there are competitors, most of which were literally destroyed.
- [30:59]
A
Yeah. So, Marty, your group, Silicon Valley Partners, you do workshops in this space. You go in and you actually help organizations that are looking for, if I can call it a kick in the butt, to get them on the right path here. For organizations that are like kind of watching the tide of AI come in and are worried about either the threats or not capitalizing on the opportunities. Where do you typically recommend people start? How do you kind of kick this off and get a lay of the land?
- [31:36]
B
We recommend you got to start with an assessment. And in fact, in the book we included our assessment, the exact questions that we use specific. And we encourage people to just do this themselves so they can absolutely do an assessment. And that assessment will give them the lay of the land. Where are they really right now? The book describes where we think you want to get to, but you need to know where you're starting from so that you know what particular situations you have to address. So if you read the book and understand like this is where we need to get to, this is what's common between all the great companies we're talking about, whether they make cars or phones or platform services like aws, they all trying to get to this place. And then you need to see where you're at. And then that gives you an understanding of how much work is in front of you and what kind of work is in front of you. And that's depending on what that result is. Sometimes you need help, sometimes you can do it yourself. Sometimes just a coach For a specific thing is all you need. There's lots of different situations.
- [32:52]
A
Can you give me a flavor of what are the most telling questions that really help an organization orient themselves or help you figure out how much help this organization's going to need?
- [33:02]
B
Yeah, well, there's three meta questions that drive everything and those three give us. We can usually get a good answer to that in about 30 minutes and then we can start drilling. So those three questions, the first is, how do they decide what to work on? How do they decide what to invest in? There are, it's remarkable how primitive so many companies are. They are just so amateur at this decision. They just make up these spreadsheets and they take wild ass guesses on how much money they make and what it would cost. And of course it's sort of all garbage in, garbage out. But the point is we need to know, how do they do that right now? How did they decide? Every company does this, right? Every company, you have to decide. And in fact every company has more things they want to do than resources to do them. So you have to decide. So that's the first meta topic, right? Second meta topic is once you decide you've got something to do, how do you actually solve that thing? How do you come up with a solution? Do you just have what you consider your smartest? People say, this is what we should do. Usually your executives or, you know, do you hire somebody to tell you this, an agency or something. What do you do? How do you solve those problems? And then the third is, okay, you've got a solution. How do you actually build, test and deliver that solution to your customer? Customers? Those are the three meta areas we refer to them. How do you decide what problems to solve? How do you solve those problems and how do you build and deliver your solutions? Some companies are good at one and not the others, whatever. But you need to be solid in all three of those and that at least gives us an area, then we can go and of course drill deeper.
- [35:01]
A
Yeah. And it's so interesting and I mean, these are such meaty questions and they also strike me, Marty, as being like some of the hardest questions or some of the hardest areas to actually mature in or change.
- [35:15]
B
Right?
- [35:15]
A
Like to actually like to transform what you invest in. To transform like how you build this stuff. Like. Yeah, I mean, I can't imagine that's something you're going to do like by the end of the week, right? Like these are so ingrained in the DNA of an organization. And so do most organizations start by like how Do I optimize within this? Like, how do we. Where do we go from there?
- [35:38]
B
It's a great question. It's. And just to be clear for, you know, we're not talking small startups here, we're talking medium or large companies. It's usually one to three years. So realistically, one to three years in order to get to where you need to be in order to be able to handle the changes that come at you, take advantage of the opportunities that come your way. One to three years. Now, here's the thing. Now I'm injecting a little bit of politics here. I've never met an organization that gives you one to three years worth of time to go and change everything. That's just not how it works. So rather than try to change everything at once, we always advocate this idea of pilot teams. Pilot teams, you actually can make a real difference in weeks or a small number of months. Pilot team says we're going to take a small subset of the organization, usually one to three actual product teams. We will staff them very intentionally with the people that are good examples of what you need in this. And we will do everything we can to set them up to succeed. Meaning we'll make sure the management is supportive for that particular. It's just an experiment, right? This is a low cost, low risk and quick way to see if this model works well in this company. And most importantly for the executives to see if this model will work in this company, if this going to be good money to put into this. And those pilot teams, I mean, there's a lot of thought that goes into them. You want to make sure that whatever they do, if they succeed, you don't want the executives to say, we could have done that anyway. That's easy. You want them to say, well, that's actually something we probably couldn't have done before. On the other hand, you don't want to set them. You know, they can't cure cancer in a quarter or something. So you have to make sure you're something ambitious but doable, something that proves the value. And then anyway, there's a number of factors there to make sure that they do. But then that pilot team, usually we say run it for a quarter, so a few months. Usually if you're doing what you want to do, that's everybody's able to see what good looks like. Everybody, the company. And I'm not just talking about the executives here. I mean, even other engineers, other product managers, they can see what good looks like. And now they understand where the Bar is now they understand why this is such a big deal and then we spread from there. So that's just one of those lessons learned. It's not the only way to go. Sometimes companies feel like they have an existential threat and they have like six months to change or they're dead. So you have to be much more aggressive. But most of the time this is the way to go. A pilot team, let it prove and grow from there.
- [38:52]
A
Yeah, I love that. And with that model you can earn the mandate. Right? You can earn the trust, you can demonstrate value and I was going to say, I hate this word. I'm sure you do too. I was going to say take a small a agile approach versus a big a agile approach.
- [39:09]
B
Yeah, yeah, absolutely.
- [39:12]
A
Yeah. No, that's, that's awesome. Are there, are there organizations you see that like just like take the wrong lesson or just like try tactics where you're like don't, don't do that. That is not the road to get there. Like what, what are the pitfalls you've seen along the way that you're like, that is not the road that's going to get you where you want to go.
- [39:35]
B
Well, yeah, this is the, this is a rough one. There's two big ones happen, honestly all the time in many companies. Both anti patterns help happen. The first one, and I understand where this coming from, the first one is the company, they hire somebody like McKinsey, I'm using McKinsey here. But it could be ECG, it could be Accenture, it could be, you know, so, so, and I understand why that happens because who does the CEO trust? Yeah, right. That's why the problem is those companies, and by the way, they're staffed typically with very smart people. That's not the issue. I love to hire from those places, but the issue is they, they have never worked in the product model. They literally don't know what good looks like. And so they end up spending and I'm not exaggerating, millions, often tens of millions and three years later they're still where they started. So that's the first anti pattern and it's not McKinsey's fault or any of these beans fault, it's that they're doing what they do. The issue is the company doesn't know what they need yet. They need people with the skills that they're trying to obtain. So that's a really common anti pattern. The second one, you alluded to it just a minute ago, they think by moving to agile they'll be able to Solve their problems. And of course they mean capital A agile. And don't get me wrong, if you do that, the real kinds of agile, there's sort of fake agile and real agile out there today. But if you do real agile, it will help, but it'll only help in the third of those three big areas. I described changing how you build, test and deploy. And the problem is that's the easy one of the three. That's the problem. So a lot of companies bought into the whole we're going to transform and that means agile. And so they brought in agile coaches and they hired all these roles like scrum masters and product owners and they got almost nothing. Sometimes they got even worse than they were before. And what they didn't understand was that they were not addressing the real meat of the problem like we were talking about. Doesn't address it at all. It's just not even in the scope of it. So. And you know, I feel for a lot of those executives put a lot of money into that and didn't get the results.
- [42:19]
A
Yeah, it's just not the right place to start. Right. Like it's a piece of the puzzle. But you got to get the big.
- [42:26]
B
Stuff right first and you have to understand that bigger context.
- [42:31]
A
Yeah, I want to come back, Marty, to really insightful, by the way. I want to come back to the first one, which was the consultancy problem or the McKinsey problem, if I can call it that. To me, there's a couple of things wrapped up in there. One of them is, as you mentioned, that the consultancies, they don't follow the product operating model here. To what degree is this a matter of finding product centric consultancies or is the use of consultancies itself just somewhat misguided? And this is more about just building those capabilities in house in your mind.
- [43:07]
B
Yeah. There is one dimension because you know, most of the management consultancies, they're in the mo, they're their business model is in the do it for you model.
- [43:18]
A
Yeah, right.
- [43:19]
B
And of course it's very profitable. I'm not questioning that. That's why it's tens of billions of dollars. Often is. Because it's a business. Yeah, yeah, it's a business. They have to provide an army of people. You know, look, the accentures of the world, there's just huge numbers and of course, okay, the problem is the company needs to build these skills. The company needs them. So to me, and I always encourage the CEO, whatever you do, you need to know your company, your team needs to learn this stuff. So unless your team is learning it, you're not getting what you need to get. So then the question is, well, okay, who can teach you? The most important thing is someone who's actually done that, been there, done that. And most of the time, you know, business strategy is very different than product strategy. So most of the management consultancies are all around business strategy. Should we acquire this company, how do we, you know, expand our business into whatever part of the world that. And those super valuable but not products. Right. That's a very different thing. And so they're very different skills. Unless somebody that's helping you has actually done a product vision, unless they've done a product strategy, unless they've coached product teams, unless they know product discovery, how are they going to help you? And so that's a different skill set. And the good news is there's lots of people with that skill set. We, we recommend coaches all the time. We don't have any financial ties with any of them. We just recommend them almost every day. We have a network of about 100 around the world because often that's what people need. They need somebody to sort of stay with them and coach them on these things.
- [45:15]
A
Yeah, no, I'm glad you said that. That's exactly what I was getting at. It sounds like you're a big believer in coaching as a model rather than consulting as a model. So that you can actually like educate, train up and build those skills in house versus like walk out the door with them.
- [45:31]
B
Exactly. Yeah.
- [45:32]
A
No, I, I love that. And by the. Yeah, I'm an advocate for that as well. I'm just, you know, I'm conscious of time here and I wanted to ask some like, bigger, I guess, kind of bigger macro questions as well and get your perspective on them. We talked about Gen AI. You know, it's obviously impacting things in a number of ways, as are different emerging technologies. I'm curious from your perspective, Marty, like, as you're seeing some of these trends emerge, which in your mind are like, absolutely living up to the hype. And are there any that you think are kind of overblown or bullshit relative to what we're reading?
- [46:14]
B
Yeah, well, this is. First of all, I would say Gen AI is real. And I will just sort of funny. I started my career almost 45 years ago and in the first wave of AI, I literally was as a member of an AI team four years ago. The problem is the technology was very different technology, but now I believe it's really, it's real, it's not that a reach to say it is real. There are things you could do that we've never been able to do before. So very. That's like this is I think a golden era for products because of that. On the other hand, look at technologies like cryptocurrency. I still am looking for the problem that it can solve better than anything else. I cannot find it and I am. I. I feel like there's a lot of bad actors that are just using it as a vehicle to take money from you and give it to them.
- [47:20]
A
Well, that's exactly how it feels to me too. Right. It's making an awful lot of bad guys very rich.
- [47:25]
B
Yes. Yeah. So that's. I mean I always hesitate to say there is no good use for this technology. I will say it's been a long time and nobody has shown a good use. Yeah. So that's not a good sign.
- [47:43]
A
Have you seen in your experience, one of the other ones I'm personally skeptical about and I'm curious from your perspective is like Vrar went through a bit of a hype cycle in the last few years and honestly I feel like it's died out a little bit hype wise since AI came on. Have you found a really good use for that yet? That to me it still feels like a, like a solution in search of a problem.
- [48:07]
B
Yeah. I'm actually much more optimistic. Like I would put it in between those two we've talked about. It's not the clear winner that generative AI is for sure. But also it's not the clear loser that crypto is for sure. There are real things that people can do today. I mean Meta's glasses are a good example. There's some really promising things you can see. I'm actually very intrigued is probably the word with Apple's developer platform for AR and VR. And this is. There are. It's not clear exactly which way this will go or should go, but there is no question it is able to do things we've never been able to do before, much better than we've ever been able to do them. So that's. That's very promising to me. There's nothing wrong. So some people feel very religious about this. You have to start with the problem and then you solve it. And some people are like, well, a lot of times we start with a new enabling technology and then we see where it solves problems we've always wanted to solve. I think there's a long history of both out there. So I'm not. I love when you look at a great product. What is it? It's a, it's a real problem that's solved in a way that's just now possible that can come from either side. So it doesn't bother me. However, if you don't find a good solution for it, then that's a different thing. And I feel very optimistic that over the next few years we will see amazing applications of that enabling technology.
- [49:50]
A
Yeah. So whether it's AR VR or just any kind of emerging tech, are there any emerging technologies or I guess let's call it emerging use cases you've seen recently that just kind of were like hair, I was going to say hair raising, which is not a fair expression for either of us, but goosebump moments of like, oh, wow, I didn't know we could do this.
- [50:16]
B
Well, I do get a lot of that with Gen AI. I mean, that's sort of what keeps us all excited. I think about it, the different applications that come out just like, damn, that is a good idea. And I could absolutely see that. We have never even thought that was possible. Most of the time with an innovative product, the users had no idea it was possible. So there's a lot of that going around. And since we already talked about that one, another one I'm very bullish on, and I see a real future is in general. We've got solutions for consumers and we've got solutions and products for businesses. Historically, the products for businesses have been the sort of ugly stepchild. Right. They were just not very good. And largely you go into a business and go into their finance organization, you see what they're using and it's like horrible, just horrible. And compare that to what we have on our phones, what we have, you know, for our personal life, and it's just like, what's going on? Like, why is so much of the talent out there focused on the consumer things and not on the business things? And there is, there are examples today of that talent applied to businesses. And I, I, and I might be a little naive here because I have done this before, but I'm very optimistic that we're going to see a displacement of these old, you know, the companies that really don't care about the products, they don't care about the users, they do care about the buyer, they don't care about the people that have to use it. And I think we're going to see a displacement with companies that do care. And it will not only make businesses more effective, but it will improve the lives of the people that work in those businesses.
- [52:19]
A
Yeah. So the sales centric, like, you know, if I can be, you know, cynical for a moment and say like contract centric, like model is just going to lose out to the actual, like increasing, you know, breadth of amazing products.
- [52:36]
B
Yeah, absolutely. One. There's one enterprise software company that I, I was an investor into, so I'm clearly biased, but their products are literally their financial products for financial reporting to the sec. Their products are rated higher by their users than Apple products.
- [52:57]
A
Wow.
- [52:57]
B
Think about that. Wow. You just would never hear that phrase anything but in the past, never. But now you can. And that's, I think that's a wonderful thing because, you know, maybe somebody spends an hour or two in the evening on their personal life stuff with, you know, Instagram or whatever they like, but they're spending eight hours or whatever on their work stuff in front of this horrible, you know, solution so often. And I really do feel for those people and I think, and you know, we're talking millions and millions of people around, just around the world.
- [53:35]
A
I do want to follow that. But there's one piece that I've been meaning to ask you about and I haven't really had a chance to, and it's that we keep talking a lot about, you know, businesses, about consumers, you know, to what degree do you see this, you know, the product operating model, this whole approach being adopted by or working for the public sector, like is there a use case there, are they using it or is this really just kind of commercial applications?
- [54:03]
B
No, it's a great question. In fact, I, I have spent time with the us, the uk, the Australian government services because in a way they're, they're like perfect example of why you'd want to do stuff like this.
- [54:20]
A
Yeah.
- [54:21]
B
And also product model is about not wasting so much money. And of course most people would agree we don't want to waste taxpayers money. So I think there's a strong argument for it. In fact, I did a collaborative article with somebody who was a major advisor to the US Government digital services called the Product Model in Government. It in theory applies fine. It's hard because as you know, there are so many stakeholders in go.
- [54:56]
A
Yeah.
- [54:57]
B
And there's so much, there's a lot of obstacles. Now most of those obstacles are to make sure people aren't like ripping off the government. Right. They're for a good reason. But it's a lot easier to do this stuff in the commercial world. No question, just easier. But you could argue you get more impact in the public sector. I think the public sector people I know they are. They're very passionate about doing this, and there are good examples where they've done some very impressive things.
- [55:35]
A
Yeah. They just have to have the stomach for getting it off the ground.
- [55:40]
B
Yeah. It takes a certain kind of grit to get something built and deployed in a model where there are so many interested parties.
- [55:51]
A
This has been super fun. I really appreciate it.
- [55:54]
B
Well, thanks for inviting me, Jeff. I hope this was useful to your audience.
- [55:57]
A
Absolutely.