Special episode with Marty Cagan on product operating model and leadership

Welcome to the podcast Dodane do backlogu. In today's special episode we host a special guest Marty Cagan. My name is Marcin and today with me are Kuba Tutaj from Mixmax Wojtek from Zendesk and Tomek from Product Academy. It's a beautiful holiday and Christmas season and we are extremely pleased to host Marty Cagan in our monthly podcast for Polish product management community. Marty, jesteś fundatorem grupy produkcji Silicon Valley. Jesteś autorem książek, o których mówiła cała inwestycja. Inspirowano, wsparli i transformowano, ukształtowano, jak świat zaspiera na budowę produktów, których ludzie kochają. Jesteś prezydentem, najlepszymi liderami produktów, ale także autorem czasami kontrowersyjnych publikacji.

You are a leader who never shies away from speaking boldly about hard truths that sometimes many leaders avoid to talk about. Welcome to the podcast, Marty. Thanks for inviting me. As we approach 2025, it's hard to believe, but it's one year since your last book, Transform, has launched and the introduction of the product operating model. Now that some time has passed since launch, how do you assess the impact of the book and the model on the product community? No, to jest dobry pytanek, tak, to było 9 miesięcy, w marcu się zaczęło. Ale, wiesz, nie zaprezentowało to modelu produktu, ponieważ od 20 lat odwiedziliśmy model produktu.

Wszystko, co to naprawdę zrobiło, to było wyjaśniać go nowej audiencji. Inspired wyjaśniało model produktu do kierowników produktu i zespołów produktu, a Empower próbowało wyjaśnić go kierownikom produktu. What about the CEOs, the head of sales, the head of marketing, the finance people? All of those people need to help as well and they were asking a lot of questions for a long time. And so the goal of Transform was really to explain it to a non-product audience because they are so essential in transforming. A lot of people think

You know, you can transform just by talking to your engineers and product managers, but it really impacts the whole company. And so the goal was to do that. And also the other goal with the book was, you know, online, it's the internet, right? So there's a lot of people out there that don't think it's possible. If you're a born Silicon Valley company, sure, you have a big advantage. But if you're a company in some other part of the world that's older, been around since before the internet, a lot of people thought it wasn't possible. We knew that wasn't true because we've been working with those companies all over the world. But we said, alright, we're going to share their stories.

And so the other thing I think the book Transform did was expose people to other companies all over the world. I mean in Europe, in Saudi Arabia, in Brazil, in places that are not known as technology hubs. And, you know, like in all our stuff we use real names, people could look them up on LinkedIn, they could reach out to them and they started to believe maybe we can change. And so I would say the best news to us since the book came out is so many more Leadership teams have been reading the book and reaching out and saying, yeah, I think we could actually do this and we'd like to try.

We only work with a handful of people, but there's many more that work and just tell us how it's going or a lot of times they'll ask us for an introduction to a product coach. We explain the critical role of product coaches in the book because For many companies the real challenge in transforming is that none of their leaders have ever seen it before. So they don't really know what good looks like. And that's where a product leadership coach can help them to show their organization how they need to work for a few months and then back up. I czy uważasz, że rola produktu coacha powinna być bardziej wewnętrzna czy zewnętrzna ekspert?

Jak myślisz o tym? Problem jest w tym, że większość firm nie ma wewnętrznych ekspertów. If they did, they wouldn't need the product coach, right? So the problem is they don't have anybody who's worked this way. Now, in many companies in the world, especially in Europe, they hire people from Amazon or they hire people from some leader at a company that's really good at this and then they bring it into their company. I will tell you a lot of people would like to do that but don't, aren't able to or they believe that their own leaders have the potential, they just need some help. So that's why most of the time coaches are

Now, I realize that this gets into one of those controversial topics because there are a lot of people that genuinely want to help their company. The problem is they don't have the experience. That's kind of the problem in a lot of the agile coaches around the world. They have the genuine desire to help, but they've never actually worked in a company really doing well. So to them, what does agile mean? It means following some process. But to somebody with the experience, it doesn't mean that at all. It means you can really move and release quickly every single day and that's you know learning how to do that if you've never done it before is not so easy.

So the point is most of the time you need somebody with that experience and in order to get that experience they're usually external. If you can hire them you should but if you can't hire them then it's a lot easier to get an external coach. Otworzyłeś mnóstwo treści w mojej głowie, ale chciałem po prostu podkreślić to, co powiedziałeś, że transformacja dla CEO i liderów seniorów to zupełnie inna historia, niż nauczanie product managers, żeby być lepszymi product managers. I had a pleasure to observe it right now at the company I'm working for that used to be product-led kind of company, a start-up, and then after several years they went into the sales-led motions for another several years, so they unlearned how to do product fast.

Listening to the customers, not only to the sales team as a proxy from customers. And now we are having another transformation going back to the roots of OK, now let's go back to PLG, product led growth. And this is like we can feel that leadership wants it badly, like they already are all in to do it, but it's still they have this muscle memory of keep coming back to the old ways. Where we are there to guard them from themselves in a way and reminding like okay how do we do it right now like how can we do it better way so it's like a it's a huge undertaking for any company I can imagine to to get transformed.

Even if leaders are all in. Yeah, it's a cultural change and it's easy for the leaders to say we're all in. And then the head of sales comes with a big check from a prospective customer and they're like, well, maybe not so much. One of the case studies in fact in the new book is about a company exactly like you're describing. 100% sales led enterprise software. And yes, the CEO knew that wasn't working. Even the head of sales knew that wasn't working. But that's one thing to know it's not working. It's another thing to believe something else could work better. And so... Yeah, it really took... You know what it took was the head of product that knew that he had to win the heart and mind of the head of sales and the head of finance and the CEO.

And the way he did that was hundreds, literally, in the first year, hundreds of direct customer interactions, sitting down with customers, including salespeople, so that the customers Really saw how this worked and sales saw how this worked and most importantly they could figure out a winning product again. Yeah, maybe I follow up on that. As you know Marty, the target audience of our podcast is also the Polish product community. We conducted a survey actually trying to get more like an assessment of the readiness for transformation or the need for transformation among various product teams in Poland.

Just to give you the scene, we have more than 100 different respondents. The profile of the person that gave us some feedback is like majority is like 65% of our product managers. We have also a good subset of product leaders and I get good long tail of also various different low. Whether this is a cross-functional roles, minority is only a product owner roles. And from the company perspective, the bigger profile of the respondents are like enterprise and scale ups and only like small subset of startup. And before we deep dive into very concrete takeaways from the survey, in your latest book you describe three critical changes necessary for a successful product transformation or product operating model.

Changing how companies build products, changing how teams solve problems and also changing how teams decide which problem to solve. What we observed in the response is like that most of the people really struggle in all of those three areas simultaneously. So I wonder like what is the first step that the company should start doing once they really realize that they have a real problem? You know, I hope you don't mind, but I'm going to take the opportunity to give, we call it tough love. Tough love. Pretend you were creating a new product for a minute. Brand new product.

Would you do a survey of the people you were going to sell to and ask them what they want? That's called a focus. I mean that's, hopefully you know, we don't do that. Now why don't we do that? Because those customers, they don't know what's possible. That's our job. Similarly, if you go to a community that is not using the product model and you ask them what they think the problems are, it's not all that useful. And it's not their fault. It's your fault. It's not their fault. You have to realize, this is why Steve Jobs would hold up his iPhone and say, you can conduct a hundred focus groups, you will never get an iPhone.

So this is why you have to realize, we are talking about moving from one completely different model to another. And unless those people have already done that, now that would be different. If they've already done that and you are asking them what would have made this a little easier, then it's useful. Just like surveys for products, we never ask what do you want in the product. Well, not the smart ones, we don't ask that. What we ask might be like, okay, you've been using the product for the last year. What are the areas of friction that you still have? And we can get to work. So the higher order point is be very careful of surveys. Second is realize what you're asking people really, is to sort of predict something they can't know.

Z tego powodu, tak, są pewne problemy, które są specyficznie ciężkie. I najbardziej ciężkie dwie rzeczy, mimo że to rzadko pojawia się w badaniach, jest, po pierwsze, że bardzo ciężko się przejmują, ponieważ pracownik produktu jest zupełnie inny. A feature team product manager or worse an agile product owner is a completely different job from an empowered product team product manager. Just a completely different job. And it's a shame because most people don't figure that out for a long time.

Makes it much harder on them. And the other is People think somehow, deep in their head, especially, I have to say, this is especially common problem in Europe, that the main way you empower teams, I mean we all, most of us, like, yeah, we know we need empowered teams, but they think the way you do that is that you convince the managers to back away. Give them room. Stop bossing people around. The irony is empowered teams don't require less management, they require better management. A lot of companies fail in their transformation because of the leaders don't understand the essential role they have to play.

Those are probably the two biggest areas that people really struggle with. The techniques like to move to continuous delivery. They are very well understood. They're really, there's some work involved for sure, but that is not rocket science. The techniques of product discovery. If you have the skills on the team, that's what they've been trained to do. It's not that hard. But if you try to do either of those things without people with the necessary skills or without product leaders that know how to coach their people, you're probably setting the teams up to fail. Mhm. I also see this kind of problem, especially about product leadership. I think that in Poland we have misunderstanding about this role, this area of responsibility.

If you can, you know, talk a little more about this product leadership and product, product leaders role, what their responsibilities, what is this role in your product operation model? No, jest dwóch. I żeby być jasnym, nie wymyśliliśmy model produktu, nawet nie wymyśliliśmy nazwiska. Dostałyśmy to od innych firm. Wszystko, co robimy, to dzielimy się tym, co widzimy użyte w najlepszych firmach produktowych. To wszystko. Tak, więc rolą liderów produktu są dwie duże odpowiedzialności. Pierwsza, kształcenie i rozwój swoich ludzi. Tak to się uczy. Nie uczy się w kursach treningowych, i zdecydowanie nie uczy się, gdy się zrezygnowałeś w jakimś procesie.

In particular, like, Scrum doesn't teach this stuff worse. I don't even know if you've heard this in Poland. It's a horrible, horrible thing, but it's called SAFE, Scaled Agile Framework. It has nothing to do with Agile, but it's marketing. But a lot of people around the world have fallen for the marketing tricks and they did. So anyway, it's nothing to do with anything like that. You learn by a manager normally, or a product coach, if your manager can't do it. You learn by somebody who has worked this way, helping you for at least a few months to learn your new role. And that's especially important. It's not that hard for the engineers and the designers because it's not that big a change for them, but it is a very big change for the product managers.

It really is a completely different job. Think about it this way. A product owner is trained as a role in a delivery process. A product manager is the prime job in product discovery processes, right? So it couldn't be more different, the job. Couldn't be more different. Yes, the product manager should also be the product owner and that's just the backlog administration responsibilities. That is nothing. So, the first issue is they have to coach and develop their people. The second issue is the whole idea behind empowered teams is that you've hired and you've coached this cross-functional set of people with the skills they need to come up with solutions that are valuable, usable, feasible, viable.

And in order for them to do that, they have to make hundreds of decisions. Many, many decisions. How do they make those decisions though without understanding the big picture? That is called the strategic context. So you need to provide each of those teams with the product vision, the common product vision, the product strategy, the team topology, This is what helps them make good choices. Without that context, they have no ability to make good choices. They'll make the best they can, but, you know, good chance if you've got 25 product teams in, say, a medium-sized growth stage company in Poland.

You've got 25 product teams. You do not want 25 visions. You do not want 25 assumptions about what's going on. You want one. And that is the job of the product leaders. That's the second responsibility is the strategic context. That's why Netflix calls it, you need to lead with context, not with control. Context is short for strategic context and control is short for command and control. Basically making the decisions, passing them down the organization. Yeah, we often see in Poland that product managers in this kind of companies that you describe are officially responsible for product strategy. Because, you know, you are a product manager, you are responsible for product, so also for product strategy.

And the truth is, those product managers, they might be officially responsible for product strategy, almost certainly they don't even know what that means, and there's no way for them to really do that. At a product team basis. The whole idea of product strategy is to look holistically across the 25 teams. So it's sort of a nonsensical thing. It's also nonsensical, and I know I sound like I'm beating up on the poor agile coaches of the world. Most of them are really good people that just have never been trained. By anybody that knows what they're doing. So the result is they'll often come in and say, oh, we have 25 product managers. We need you each to create your own product vision.