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Episode 06 Product Management in Scrum

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(HINWEIS: KANN UnBEABSICHTIGT KONFUSE, UNGENAU UND/ODER lUSTIGE TRANSKRIPTIONSFEHLER ENTHALTEN)

“Q”
Hello, and welcome to the scrum sessions podcast here from Dallas, I am Q and carry on, it’s your cue to get in.

Gereon Hermkes
Hey, everyone, this is Carrie. I’m from Berlin. And in case you’re wondering why I’m smiling, cute, just we just taped the episode and Q hit the stop record button. I was not gonna let you get away with a cute. So here we go. Oh, great. She just started the episode, the two fingers pointed at me because I’m a moron. I hit the stop by mistake. Right? Okay, good. So well, at least we’re all pumped up. We already have the dress rehearsal. Right? So today, my friend. Like I mentioned before, when was not recording, we’re going to talk about product management. And the reason we’re gonna talk about product management is I am up to here with people not doing this thing, right. And because they don’t do it, right, we have the big problem, right? The Standish report, chaos report that mentions that 75% of what we create is waste. And that I honestly didn’t believe that. I didn’t believe the first time I saw the report. I didn’t believe it. Until I started using PowerPoint, which I use quite a bit, right you and I, we train people. We’re always working on PowerPoint and doing stuff in PowerPoint. And one day, I realized that I think on a good day, and I’m a very heavy user of PowerPoint, I may use 15% of that.

“Q”
Which means the other 85% is waste.

Gereon Hermkes
And that for me, it’s for Product Management. And why that happens? Well, I’ll tell you why that happens. That’s my opinion. And that I bet is common John, several people. Because companies do not invest in a product management organization. It’s all about delivery, delivery, delivery, and cut cycle time and get better at this and automate that. And it said, which very important things. But delivering what are we delivering the right things.

“Q”
And you know, you’re using the example of PowerPoint, but PowerPoint is actually one of the few successful products right? So even though maybe, I don’t know, 5075 85% of PowerPoint features are useless or very rarely used. This is actually product that is used, right. And there’s probably for every one that is being used, there’s 99 product, going from slide nine other products that are going straight to the trash can because nobody ever talked to the customer, it was way too late, etcetera, etcetera, right. So, I think this is a problem of monumental proportions. And I always like to with the customers, I always like to give the example yes, it’s great. You’re doing Scrum in the team’s you are improving your delivery, right? You’re building a car that’s going faster and faster, right. And that’s awesome. That’s really, really important. But who’s steering this car? Who’s sitting behind the steering wheel? Right? And that’s usually the product owner, the product manager, and you have to invest in that person as well. If you were the owner of a Formula One team, would you just invest invest into the technology to make the car faster? Or would you also invest into the driver? And the answer is, of course you would because just the car going faster, doesn’t get you anywhere? Exactly. Exactly. And honestly, I love Formula One is case studies, right? Because when you when you noticed last year, they changed the regulations and all that stuff. The cars were supposed to be as low, the wheels were bigger. So the pitstops went to 2.3 2.4 seconds, right? And at the end of the season, the pitstops were around 1.9 again. So that’s continuous improvement, but they see the whole thing. And I think we concentrate too much on the delivery. And it’s kind of funny because first of all, people look to me but said queue scrum doesn’t talk about product management, right? Yeah, it doesn’t but other order that thought we’re gonna get to there in a second. But one thing that we confuse is Scrum or not Scrum is there is a strategic understanding where you want to take a product and there is the operation on tactical execution to where you want to realize that strategy. And multiple times we don’t connect the dots multiple times we put a bunch of stuff in a backlog just because somebody thought was a good idea. Right? I just dealt with this. Last week I was talking to somebody and he told me q i being forcing my the product owners to prioritize. And what I hear back is oh, you know what, everything is important. We need to get everything done. Yeah, but which one is the most important? I cannot tell you
that seriously, he told me that the product owner said, I cannot tell you which one is more important. That for me is a classical failure of product management is where’s the strategy?

Gereon Hermkes
Right. So Gartner say mega issue number one is prioritization. Well, no kidding, right? I mean, you and I probably dealt with this 1000 times over, right? So like, what’s priority one? What’s priority two, I don’t know, everything is important.

“Q”
And, you know, it could be an impediment or hindrance to prioritize, right? Because I have so many, so many stakeholders, and everything is so political, that I cannot prioritize for that reason. But a lot of times, it’s simply because you don’t know where you’re going, right? You’re the product owner, you’re the chief product owner, or whatever, right? And you have to steer the teams into the right direction. And it’s not an easy task. And task, right? It’s actually I actually feel like, it’s quite daunting, because I know that if I gave the teams, a team or teams, product backlog items that don’t create as much value as they could, it feels horrifying, right? Because the team’s cost a lot of money, they can actually achieve something substantial, the competition is probably doing that right now. Right? Because you know, we’re not living in a vacuum, somebody else is probably working on the same problem. And if I don’t have the orientation as to where we need to go, and that really means high level strategic insight, and not just, you know, moving the stories around, then I cannot actually lead them into the right direction, which is extremely, extremely wasteful. Yep, I know. And we come back to this, and I heard this the other day. But kill scrum doesn’t talk about product management, they have only product owners there. I said, Well, I cannot tell you why they decide to name that way or this way. But my understanding is, if you get one team, let’s say startup, a small operation, right, you’re gonna have one team. And that person in there is doing or should be doing must be doing both roles, product owner and product management, they should be looking at the strategic side, they should be looking at the tactical side, they should be looking at where the market opportunities are, and how we can implement stuff to address those market opportunities. But as your organization scales, which we often forget that eventually, hopefully, right? It’s going to grow more people is going to start using our product, and we have to put more teams in there right? Then we’re going to have to have this differentiation between the strategy and the tactical side. And we normally don’t plan for that. And what happens is, we start to scramble things. So Oh, yeah, we have 100 things on a backlog. Great. We have 100 teams things on the backlog, do we need to deliver 100 things? Oh, if you ask somebody? They’ll tell you. Oh, yeah, sure. That’s why we put them in there. But my point is always a if when we deliver 25 of those 100 things, did we reach 90% of the outcome? Yeah, I mean, it’s pretty much everything, the user or the market, or that market segment wanted? And then I asked the question, why you’re going to do the other 75 things.

Gereon Hermkes
Right. And at that point, I hear that strange silence. You can hear the hamster wheel spinning there. And there’s no answer.

“Q”
And I think there’s so many reasons for that. One of them is just a lack of discipline. Right. The other one is also, you know, I sometimes think it’s a, it’s a feeling of insecurity. Meaning that, you know, if you put something out that doesn’t have all the bells and whistles, you know, maybe it’s skipping some functions that your competition has, but you know, you feel good with it, right? You say we don’t need that stuff, let all the other guys do that. We are focusing on the most important stuff. Some people can deal with that insecurity, right? They feel like oh, yeah, but we have to have it, the competition has to do it as well. And so there, there might be some compensation in there. Um, but you know, it’s really interesting, because like when I was in startups, usually, like you said, in the beginning of they don’t have that problem, because they have so much pressure, right, then they need to everything they eat, they need to hunt, right? So if they’re not successful, if they’re not creating impact with the limited resources that they have, they go out of the market. And so that really helps to focus the team obviously, because, you know, you can’t just sit around you have to go hunting and you have to get something otherwise you’ll you’ll die, you’ll die. And so usually that works quite well. And then you also have the venture capitalists who have an eye on this for example, and that they kind of guide you into the right direction.

Gereon Hermkes
But then if you think more of a transformation, right and organization that wasn’t born agile, they did some traditional stuff, and then it moves to Agile

“Q”
And if you think about it many times, who is the product owner, right? It could be a business analyst, it could be a project manager. But that’s not kind of the right necessarily the right mindset, because especially the project managers, what do they do? Well, they are executors, right, they get the past, here’s the project, get it done. Which is not the same as making sense of the environment, strategically picking the best way through it, because that’s a different role, different mindset, different training. And so you end up with a lot of project manager types in those product owner roles, and then you’re surprised that it’s not working. And actually, it shouldn’t be a surprise. Yeah. And you see, the thing is, I think people miss this product ownership is a role in the product management organization. Right? And the as your organization grows, you’re going to have those separation of roles.

10:57
Because they has to happen, otherwise, you don’t address things properly. Right? And I’m not even go there and how many times I heard, oh, we need to hire a new product owner. Oh, great. You know, let’s get a business analyst to do that. And then I asked why I’m not talking. Now. I’m not saying business analysts are useless or anything. That’s not the point. But why you are making a business analyst or product on Oh, they know how to write user stories.

Gereon Hermkes
Okay, why do I care? And of course, people listen to the podcasts gonna say, Oh, my God killed doesn’t like user stories, right? Because I know this is coming, right. But no, that’s not the point. The point is, I used to do this all the time. I used to go to the product owners and say, hey, if I get something out of your backlog, and I go to a team member and ask them, what’s the point of that? Card or item, whatever you want to call it? Right? Can they tell me? Oh, yeah, absolutely. So we didn’t do this multiple times. I said, What is this? And they’re gonna say, Okay, this is, when we do that. There’ll be this button in the form that they can click and do something.

“Q”
And then the product owner was always smiling. Oh, see, they know what that is. I said, No, they don’t.

Gereon Hermkes
They know the execution of the stuff. How does that impact my customer? My user, my stakeholder?

“Q”
Yeah. Right? Because in the end, product management is about two things, retention and acquisition.

Gereon Hermkes
You retain the people that you have as customers and you acquire more, right? That’s the whole point. Otherwise, you don’t have return on investment, right? So if we’re creating stuff that nobody’s really sure, why do we need it? And how does that connect to retention and acquisition or whatever outcome? It was? Why are we doing it. And again, it’s because we lose connection between the strategy and the execution, like your mission and our startup that’s much more clear. Because when you create a startup, you have a vision, and everybody knows what the vision is. And everybody is focused in the vision. So you’re not going to create waste, because you know exactly what it is that you’re aiming for. Right. And we go after a difficult thing sometimes, because that’s where the fun is, right? Nobody wants to do easy stuff. We’re gonna do the difficult stuff, the creative stuff, the stuff that innovates but everybody knows their objective, because a tiny little group, then when we scale up, we forget that we get a multiple layers in there, we’re gonna need multiple roles, but we don’t really understand how all the things connect together, and then we start generating waste.
Now, I like what you just said about going after the difficult stuff, right? Because, you know, like, oftentimes, in this podcast, or in the live scrum sessions that we do together, we often talk, you know, we always have, it seems like we have problems, problems, problems, problems, problems, right. But the thing is, and this is actually reflected when you do a transformation, right, because some employees will say, Oh, we have so many problems since we have started doing Scrum. Right. And actually, this is how it’s supposed to be the the problems aren’t created by Scrum. So we don’t suddenly have a product management problem because we are doing Scrum. Scrum is a problem identification machine. It’s a rigorous and relentless magnifier and and it’s making clear where the problems are right. It’s shining the light on all the problems and you cannot avoid it anymore. Before it was always easy to you know, Oh, this isn’t working well. Let’s just put it out underneath the carpet. Right and but as soon as you have transparency through Scrum, there is no avoiding the fact anymore, right. And so what’s the problem? Yes, there’s tons of problems in the delivery right, the scrum master she might not be doing her job, some team animals might not be performing tons of stuff.

But also, usually there’s a lot of problems on the product owner side, like you said, the product owner organization, the product management organization, because frankly, a lot of product managers just suck. If I think back to the organizations that I used to work at, that weren’t agile that weren’t in a transformation, the product managers, and this can be an extremely influential role, right? Because depending on your product, and how it’s cut in the organization, that role you can make or break an organization. And most of them didn’t know what they were doing, honestly. And if you think about, like, how traditional organizations are organized, it’s usually a system of organized responsibility, right? Nobody’s responsible for anything, everything is a committee, you know, there’s tons of people discussing everything too many cooks in the kitchen. And then like, how do you actually know somebody is good as a product manager? Well, you don’t, because I remember, you know, hiring a great product manager, I was in the computer games industry. At that point of time, he was the product manager for a very successful computer game that everybody who plays computer games knows, right, it was an international success, it had had many follow ups, and we hired him paid him a lot of money, because we wanted to learn from him have the next successful game, right? And he came, he didn’t know anything, he really didn’t know anything, he was a total dud.

“Q”
Why? Because it was okay. 20 years ago, 30 years ago, to develop all these products, 99 of them went straight to the garbage can because first of all, they were over budget and late. Nobody ever talked to the customer, right? And then accidentally, you had had a success once in a while, right. And if you were the lucky guy, to be the head of that successful product, right, you could move on up the career ladder. But in reality, nobody was responsible for it, it was just luck. And nowadays, you can’t do that anymore. Because the world has gone agile, a lot of other things have changed. And now you have more transparency. And now it’s becoming obvious that most product managers don’t know what they’re doing. Yeah, I am not surprised. And you see, I always tell people, a good product owner needs to be empowered, available and qualified.

Gereon Hermkes
A lot of times, they’re not available, because they don’t know how to manage their time. A lot of times they’re not empowered because they are a proxy for somebody else. A lot of times they’re not qualified. And it’s not even their fault. They’re lacking training. They’re lacking a lot of things, right. But I had a case on a client years and years and years ago, they had three product managers, and they had 39, teams, big, big, big chunk of stuff.

“Q”
Honestly, the 39 product owners or not even good proxies, because every time I happen to be doing a gimbal walk and talking about about this and that, I don’t know, let me go talk to the product manager and see what they think.

Gereon Hermkes
So the rules were not clear. And basically three people are responsible for coordinating 39 teams, and you know how well that will go right? Very, very well, it went so well that I cannot even tell you how well it went.

Gereon Hermkes
Because we forgot the empowerment. We forgot the qualification.

Gereon Hermkes
And one thing available. Yeah, they were available. But every time they were available, they didn’t have the answers anyway. Right. So the Empowered wasn’t working the available while was sort of working. And the qualification was not there. And we forget those details. Now, if you are in an execution team, and somebody is not very good at what we do, we will get into panic mode, oh, we have to train them, we have to fire them, we have to replace them. Whatever people people get really, oh my god, we need to fix this. Now when somebody is not performing, and the product management organization, it’s okay. It’s another 50 items that you put on the backlog and that’s okay. Our teams are really good. They can do another 50 items. Right? Well, somebody paid for that there is a cost to developing that stuff. Right? And we are creating waste.

“Q”
Absolute. And you know, we were talking about the race car before, think about fighter jets, right. So a fighter jet is quite expensive to build. And it’s supposed to go very fast. But of course, the military is also invested into the pilots, right? Because the person at the helm makes a difference. And when I’m working as a product owner, honestly, it stresses me out so much, to always make sure that I have the right orientation, right that I know what’s going on in the market that I have a good strategy and the strategy to get there that I’m thinking of the marketing then um, you know, it’s very broad based. It’s actually not one discipline. It’s like five to 10 difference, different disciplines that I have to think of at the same time, and then making sure that I’m feeding the right stuff to the team, because otherwise, yes, they are working very fast. Yes. And they will work on stuff, even if it doesn’t make any sense. I’ll just give it to them, they will work off it. But then they just waste their time, right? And then we have, you know, think about how much a sprint cost, it’s easily 20k per two weeks sprint, right. And then if you have one team, or if even if you have a couple of teams, what happens then you’re just wasting money, money, money, right. And that’s one thing. And that’s actually not the biggest problem in my mind. Because in my opinion, the product owner, Chief Product Owner, product manager needs to be strategic meaning using the speed of the team to attain competitive advantages, right. And that’s usually about speed, it’s great that the team is going fast, but you need to maneuver them in a smart way. So that you can actually get to the goal and wasting the money for sprint, that’s peanuts compared to being too late the market, right? You have great product, you actually you might start early.

Gereon Hermkes
But then you get off track, right? You focus on the unimportant stuff, and then will the market is gone? What do you do then? And this is not something theoretical, in our times where things are moving quickly, we’re often you have when it takes it all scenarios, especially everything on the internet, and I think in the AI business models that are developing now, it’s the same thing. You’re just you’re not going to be late, you’re going to be shut out if you’re not fast enough, right? And the team can drive as fast as they can. It matters, who is steering them through it, and you’re gonna lose everything if you don’t do this correctly. Yep. And you see, again, shock I’m going to disagree with for longer a lot of people in the so called Agile community, like I care what they think anyway, right? You know, me, but I’d rather rather invest a lot of money and have extremely good product management organization, good product owners, good product managers, and have so and so teams, because they can grow with time, right? Because those guys, they’re gonna make sure whatever the teams are doing, is the best thing to do right now. Now, if you have the other way around, you have a really good delivery organization and a bunch of not so good people in the product organization, guess what’s gonna happen yet, you’re gonna come to the market really fast with the wrong thing.

“Q”
Right, and then the competition is not going to make that mistake, and then you are doomed.

Gereon Hermkes
Yeah. And personally, I think I agree with you. And I think you need to do everything, right, because this is actually what Scrum is about, never stopping to find problems and improving stuff. And so you need to have good teams, you need to have good Scrum Masters. And you need to have good product management organizations, Product Owner organizations, and you’ve been referring this to this in this session. And I think a lot of people just simply aren’t aware of it, right? Because they’re coming from this old project management mindset. And they think about delivery. And yes, Scrum can do that for you. But you also need to fix the problem of what they are working on, right? Because often, that’s not the most important stuff. And yes, then you also have to invest into the delivery. So, you know, the better you do Scrum, the more problems you’re actually probably gonna see, because there’s always a next level. But that is what you know, everything that is interesting, is about it’s, you know, Simon Sinek is always talking about the infinite game, it’s an infinite game, you’re always gonna find more stuff.

“Q”
But this is actually something that happens earlier in your transformation journey, in my opinion. And as you say, this is something that’s completely overlooked. And it’s extremely wasteful, because you’re investing into those teams, but the people in command of those teams don’t have the orientation don’t have the training don’t have the empowerment to actually lead the teams into the right direction. Yeah, and another thing we often neglect, and honestly, I know a very good example where it worked wonderfully. And the results were phenomenal, is the constant communication and coordination between the product people in the process people, the delivery people and the product people because it cannot be like a guys, this is what I want done to call me when it’s that. Right is the daily conversation that daily communication. It’s a we’re stuck on this. Are you sure you want to do that? Can we do this in a different order? It’s a questioning. I had a developer once who questioned something that the product organization wanted to do. And to make a long story short, he was right. And the reason he question is because I coached all my teams to ask questions non stop a just because the backlog it doesn’t mean that you guys actually have to do it. Go understand why it’s in there. And the question that and by question that by putting people on the spot at the time was about six, seven years ago, he saved about $2 million in development costs, because it came down that that feature was somebody’s pet project, nobody really needed that. But you have to have this communication. Because otherwise people do dumb things. And it’s not that they are dumb or stupid. It’s the more people look at something, the more they’re gonna see, right is the typical thing, you are playing chess, and you are there for an hour. And you can see something somebody just comes by and says, Oh, why don’t you move this over there and like, ah, but that’s exactly what we need. We need people poking holes on on things, you know, and talking to each other and trying to understand, then you have a really good organization on both ends, product and process, delivery, and strategy.

Gereon Hermkes
So okay, now the executive comes and says, Okay, we’ve been doing this transformation for a year, I can see the process improvements, the teams are not great, but they are getting better than they’re fairly good right now. But it makes sense. What you guys are saying, we need to invest into our product management organization. What’s the next step? What is that manager supposed to do?

“Q”
Well, I don’t know. I don’t have my boots on the ground over there. Right. But I will tell you, are we

I will tell you, are we delivering the right things? How do we know? Right? are we increasing acquisition? Or are we increasing retention? Are we are we getting better value for the money that we spent developing it? So I think the first thing we have to look at is how efficient we are as an organization in the in the product delivery? Based on the strategy? Is the strategy really good? Because we may actually get really good at delivery. But is the strategy Good? How are we? How are our products being received on the market? So a great stuff for this. I love it to know that I teach it a lot as objective and key results. OKRs. Right? So are our OKRs giving us the idea, the perspective that we’re doing the right thing? Are the outcomes because we need to measure the outcomes in the in the delivery side is all about measuring process efficiency, right? And you know, every time I interview a Scrum Master, what I do a lesson that you had in percentage points, what was your process efficiency?

Gereon Hermkes
Their thinking, I’m gonna ask something about a what is the fun game that you taught your team and all that stuff here? Great, right? But you know, how many people actually answer that question to me process efficient, they look at me like I’m from some strange planet out there, right? And I asked the same thing, when a product people say A, are we getting better at addressing the market opportunities?

“Q”
How can you show me data that proves that we’re actually getting better? Because I’ll tell you one thing, it’s all about the best possible result. And we always go for the most probable. So if you tell me Oh, till next quarter, we’re gonna keep our position in the market. I said, Great. So that’s your strategy for a product organization, I guarantee you that somebody out there is saying next quarter, we’re gonna beat those guys, because all they do is keep their market position.

Gereon Hermkes
So what I tell to executives is, how can you show me the efficiency of your product organization?

Gereon Hermkes
How do we know that? Because if, if it’s not good enough, and oftentimes it is, and because we’re always going to space for improvement is what we do next to improve?

Gereon Hermkes
Is that how we’re targeting? Is that how we’re pricing our product? Where is the opportunity and what we’re not doing? Right? And the other side? Is? What’s our process efficiency?

“Q”
Right? Are we doing DevOps are doing that? Whatever? If it’s software, yeah, if it’s hardware? Can we do stuff a lot faster? I mean, can we prototype things faster? It’s both things have to work together, and we have to be communicating. So I always say is, okay, product people? How do we gauge our outcomes? How do we know we’re getting after the best possible result? And not the most probable, which is really easy to do?

Gereon Hermkes
Yeah.

“Q”
So for me, I think this is a very good point, my mind immediately went to training in some kind of form. And by training, I don’t mean I’ll let’s do a one day training class on it. Because this also seems to be somewhat of a reflex, right? put somebody in training and then everything’s going to be solved after two day class. No, it won’t. So I think the first thing I would say is what you said before, right? The the awareness is important because that’s is the most important step most people is that most people are oblivious to this. And once you have the awareness that this is actually a critical thing, just as the pilot in Formula One or the pilot and a fighter jet. That’s the biggest step. Right? And the next one is to realize that this is a long term journey. This, you know, we’re talking about strategic stuff. Well, how long does it take for the US military, for example, to train strategist? It’s it’s not two days. And it’s not two years, right? Because it’s something you need to learn the practical basics first. And then you look who has the potential to go to the higher level military schools and so on end, it takes decades to train that person to that level, I’m not sure it will take decades to get a good product manager, but it’s not going to take two days, right? And then find a way of getting people there. And that’s, of course, they need to be good at Scrum. But then they need to get good at product management as well. Right. And that probably means depending on their context, maybe they need some business training, business strategy, for example, some finance training, right? Maybe they need design and UI UX for that. And so I would actually see this as its own project, to make sure that we have a, like a system a training system in place, the military stone leave that to happenstance, right, they don’t just say, Oh, maybe we’ll have a strategic leader coming out of these soldiers that we have these enlisted soldiers that we just pulled, right. They have a plan to identify the right people and train them to get them to where they need to be at to be the next generation of top level leaders. Right. And so you’re probably need something similar. And you can’t just say, Okay, you guys are product owners, you were a project managers before and just hope for the best to happen. Yeah, absolutely. Absolutely. Training is a continuous thing. Everybody who thinks they send somebody to a training class for a day or two, and it’s going to have any benefit. I have news for you. It doesn’t, right. It has to be a continuous thing, which means training and coaching, right and no, guiding people to getting better at what they do. Anyway, my friend, I think we talk too much about this one, right. So from Dallas, I am Q and the last word is always with my friend, Gary.

“Q”
Thanks, guys. We hope this has helped you.

Gereon Hermkes
Please be aware that it’s really important to not only focus on delivery, but also on the product ownership product management side, because those are the people that are at the helm, making the decisions giving clarity to the teams, and if they don’t know where they’re going, the whole team is going to be lost. So please make sure you have that awareness and try to invest in that area. Thanks, everyone. Signing off from Berlin signing off from Dallas. Take care. See you next time.