Product managers can create a better organization
Product management is the economic engine of society. It drives value creation. Without products, whether they be a tangible item like consumer goods, such as toothpaste, a service such as Uber, a checking account, or any other product form, the economic system we enjoy would not exist. It is through innovation — the creation of new products — that value is created for customers and for organizations. Because of that, your role contributing to product and innovation is vital to not just your organization but to society.
While your role is critical in this value creation, it also gives you unique insights into your organization — insights that equip you for an even larger role if you wish. This role is creating a more valuable organization. You can go from building better products to building a better organization. Phrases like organizational improvement, performance improvement, quality management, and performance excellence are used to describe such transformations.
My guest has been helping organizations make performance improvements for many years. He seeks to inspire and lead people and organizations to achieve organizational excellence. And don’t think this is just about improving the bottom line — organizational excellence is creating a positive work environment along with being a responsible contributor to the community. His name is Adam Cohen. I hope you enjoy the discussion and learning how product managers and innovators can have a larger role in organizational performance.
Summary of some concepts discussed
- [3:19] What does it mean for organizations to improve their performance? When most organizations talk about performance improvement, they are really talking about the bottom line. This is how they can make or save money. However, there is much more to real performance improvement, which is called performance excellence. This is an integrated approach focused on the value provided to all stakeholders, including the customers, employees, community, environment, etc. It requires an aligned approach between elements that are top-down (strategy, vision, objectives), bottom-up (product, customer feedback, employee feedback), and processes in the middle. It means creating a system that improves the way the entire organization works.
- [8:58] What is an example of an organization that pursued performance excellence? OMI was a business unit of CH2M, a large engineering construction company. OMI operated water and wastewater systems for municipalities. The journey towards performance excellence resulted in many changes. Before starting the journey, revenue was $300,000 and grew to $300M. Of the many changes along the way, one was the way people were able to innovate and improve the way they worked. The concept of employee empowerment was integrated into day-to-day work. Leaders sought ideas from frontline employees and worked with them to innovate. An emphasis was placed on day-to-day innovation, change, and improvement. Customers became more invested in the organization over time. They participated in annual meetings and shared how the changes made benefited them. During the journey, the organization’s overhead rate remained below 10%. The performance transformation was made possible by how employees were empowered. Employees had a clear understanding of the organization’s strategy and the capability to act upon it. They knew how their individual work contributed to the overall strategy. Together, this created many engaged and motivated employees and made for a better work environment.
- [17:07] What are the characteristics of product managers who should be involved in organization performance excellence? The ones that are most effective have a product or product line focus but also have a strategic view. They understand the market, customer requirements, and have customer relationships. They understand the value chain of their products – how a product creates value for the user/customer, how it is distributed, how quality is assessed, how manufacturing or creation occurs, how it was developed, and how the ideas for the product were discovered. The person who has the full value chain perspective will be most effective because they have the best chance of optimizing value. That requires a strategic view of their work, an understanding of the customers and markets, good communication skills, effective interactions with stakeholders across the organization and customers, and the ability to speak truth to power.
- [20:33] What characteristics would not be effective contributing to performance excellence? A product manager who is content focusing on “product” and taking a narrow view of their work instead of a strategic view won’t be effective with performance excellence. Leaders want product managers to be more strategic in their work, but they also must recognize that the organization may be placing limits or barriers that make this difficult.
- [23:03] What are the key elements to performance improvement? First is the selection of what to improve. Again, it is helpful for a product manager to have a strategic perspective to help with this, but practical experience with bottlenecks and issues is also helpful. Next is to apply PDSA, the Plan-Do-Study-Act cycle from Ed Deming. Other methodologies are similar, such as Six Sigma, Lean, etc. Essentially you want to decide what to improve, make a plan for the improvements, experiment and try different options, measure the outcomes or impact, evaluate the actions taken, and implement what is needed. From there we continue to monitor and evaluate the changes.
- [27:50] How do organizations deal with the tension of continuing operations while making performance improvements? Employees’ responsibilities are two parts of the same equation. Any time you spend away from operations/production is time away from creating value for the organization. However, any time you spend on operations/production that is not optimized for creating value for the customer, such as developing the wrong product, is time wasted. Balancing time on operations with time on improvements is the challenge. Organizations that use only existing resources can set aside a test environment that is a lab for making improvements. Some volume from existing operations will need to feed the test environment, temporarily lowering existing throughput. Another approach is to host an event focused on making change. Employees are dedicated to the event for a few hours to a few days to test ideas and make changes. As no additional resources are involved, this does slow volume but the changes may allow you to make up the loss over time. Another approach is to add temporary resources by bringing in performance excellence experts and others to help define the solution and implement it, leaving a system in place for the organization to sustain the changes.
- [34:25] For product managers that want to move towards organizational leadership, what is one thing they could start doing now in preparation? Learn to ask good questions and to listen to the answers. Think about what are good questions to ask the stakeholders you work with – the sales manager, distribution manager, engineering, senior leaders at a town hall meeting, etc. From good questions you get an increased perspective, knowledge, and also recognition from others who see you as a person that asks good questions.
“Those who look only to the past or present are certain to miss the future.” – John F. Kennedy
Thank you for being an Everyday Innovator and learning with me from the successes and failures of product innovators, managers, and developers. If you enjoyed the discussion, help out a fellow product manager by sharing it using the social media buttons you see below.