Bored with the Board
Product delivery is a corporate governance issue
What do you do when you discover that the organisation you’re in is acting insanely? It has gone mad and is behaving in a way that harms itself and everybody associated with it. How do you deal with the the realisation that it’s not just your organisation; it’s the whole industry? What if the contagion of insanity has spread to every industry and type of organisation engaged in producing the kinds of things you make? What do you do?
If you’re a product manager working in software products today, you may find yourself in this very situation. I’ll go as far as to say it’s likely this will be at the root of the frustrations and inefficiencies you battle to solve on a local basis, every day. The organisation you’re in has lost its collective mind.
Most product managers don’t consciously acknowledge this. They spend their working lives in the trenches, dealing with continuous improvement at a team level, ignoring the inevitable conflict between what emerges from agile practice, which turns out to be the best way to create products and the behaviour of the company’s executives. They do what they can and hope for the best. Unfortunately, that’s never enough.
There is a recognition that creating a great product, which customers value highly, ought to be the work of everybody in the company, bar nobody. However, whenever the product manager attempts to create company-wide unity around this notion, the hardest nuts to crack are almost always the senior executives, most of whom are utterly convinced of the rectitude of what they’ve been doing.
Why don’t they listen? Why can’t they change? I know many product managers that have reached this impasse in their careers and been broken on the rocks of trying to introduce universal, continuous improvement to a thoroughly (or even partially) dysfunctional organisation.
Product manager extraordinaire, John Cutler, recently wrote a searching essay on Medium.com, which imagined a fictional conversation between a CEO and the “Other Person”, who may or may not be a product manager, depending on your interpretation of the dialogue. Entitled: “One is the Loneliest Number”, you can and should read it here:
https://hackernoon.com/one-is-the-loneliest-number-d19de796acea
The first thing that struck me about John’s piece is that it opens with a disclaimer. I’m familiar with disclaimers. I have one on nearly every one of the articles I write on Medium. What’s the significance of this? Clearly, we use disclaimers to prevent litigation launched against us by people who perceive a sleight or identify themselves in the writing in a non-flattering way. This is about fear. Without wanting to put words in anybody else’s mouths, we instinctually know that powerful people, in positions of destiny over our futures, can and probably will do us harm, if we write something too close to their bone, or which they dislike. We have inadequate psychological safety to say what needs to be said. Experience has taught us that being the messenger means you invariably get shot.
That’s the behaviour we have come to expect from the C-suite and above. Could this be a part of what’s wrong with organisations trying to produce products? I believe it is. The fear of vindictive retribution is a significant impediment to organisations getting their product development act together, on the basis of what those in the trenches have learned painfully, through practice. Rank is pulled instead. Father knows best. That or the legal hounds are set on the dissenter. One way or another, you will be punished for speaking up.
This, more than anything, is the unacknowledged, elephant-in-the-room impediment that prevents agile from working as well as it should, across the entire organisation. Meeting the goals of investors, the board and the C-level executives becomes impossible, if corrective actions are limited by veiled threats and an ambient climate of fear, created by executives that would rather throw their weight around than listen to what has been learned by those trying to do the work as well as they can. I submit that this is why the agile movement concentrated on team-level improvements. They as good as abandoned any hope of extending the influence any further, or perhaps felt they had to prove it in practice, before addressing the rest of the organisation.
But you can’t be an effective team, exhibiting best practice, if the rest of the organisation works determinedly to thwart your every gain and hard-won increment of progress. The internal conflict must be resolved, or the net result is still a broken system. Thinking you can be a lean, agile, enlightened team in the midst of wider organisational dysfunction is magical thinking. Your efforts will be completely undone by the time your product reaches your customers.
What do the C-level executives, board and investors want? Clearly, they’re all in alignment, but what are their expectations? John said it in his imaginary dialogue. They want to go faster, to be more innovative and to stop issues in production that are killing the company. They want it all and they want it now. More than that, they are well aware of what this is costing them. Market share is being lost, customers are defecting and dissatisfied, product releases have insufficient impact. If the CEO doesn’t solve these problems, the board will apply intense pressure, or fire the loser, if he doesn’t turn it around.
Here’s the rub, though. The board wants those things, but also insists on continuous delivery of acceptable quarterly results, showing increasing profits and market share growth, without interruption. They don’t accept that there may be a temporary conflict between these mandates. If the product development system is broken and requires correction, fixing it may not be compatible with short term financial performance. Should the CEO leave it broken to keep the financials looking good? A sane organisation would never sacrifice its long term viability for short term optical appearances, but most organisations are insane. That’s precisely what the average CEO does. The problems are swept under the rug, the product development system remains sub-optimal and the CEO gets to keep his job for one more quarter. The day of reckoning is deferred by another 90 days.
Why does the board back the CEO into a corner, like this? Fixing the product delivery dysfunction might involve “removing a whole layer of middle-management, combining departments, bringing the outsourcing in-house, attempting 50–70% fewer projects, focusing on a small number of high-value efforts, leaving many teams idle for the time-being if they can’t swarm on the bottleneck, hiring some key expertise, addressing the retention issue, investing in dedicated tooling and infrastructure support for teams, hiring full-time coaches for front-line teams and managers/leaders, doing a major refactor of the core product, and missing your revenue goals for the next 2 or 3 quarters.” Why can’t the board sanction missing revenue goals for the next few quarters, in exchange for superior revenue performance thereafter? What’s wrong with these people?
The board will tell you the problem is the investors and the markets. If this company doesn’t meet its financial targets, then investment will flow to companies that do. They can move their money in an instant, as they have no long term commitment to any company. This is more magical thinking. What makes the markets believe that there are any places to put their money that have their product pipeline completely sorted out? Why would you invest in one that wasn’t making continuous improvements to its product flow? Is the belief that returns can be maximised, simply by shopping around? What if every CEO is sweeping their product delivery problems under his or her respective rug and the investors are being snow-jobbed universally?
All too commonly, output is incentivised over the health of the product development and delivery systems. Almost always. That’s why companies continue to under-perform, employees have miserable, stressful, pressured working lives, CEOs feel beleaguered and customers get short-changed, provided with crappy products and no choice about it. Investors are shooting themselves in the foot.
The problem clearly starts with the CEO’s behaviour, but nobody calls them out on it. We all issue disclaimers because we are afraid that CEOs, as a class, will punish us by exclusion. We, as product managers, don’t feel psychological safety or sufficiently trusted to give them the best advice we have. We have to sugar coat and dilute the truth, distorting it, beyond recognition, into a palatable pill to swallow. Nobody wants to rock the boat, even if the boat is a sinking ship.
However, here is the inconvenient truth about that: everyone that engages in the charade of stroking the CEO’s ego and every CEO that merely keeps up appearances to appease their board is failing their ethics test. They’re giving up their moral agency to keep their jobs. In short, they are exhibiting massive conflicts of interests.
Why don’t CEOs have the genital gravitas, testicular substance and intestinal integrity to do the right things? Obviously, they’re afraid of their board. So, who is going to educate/correct the destructive behaviour of the board, if not product managers or CEOs? Do we simply allow the board to continue to issue mutually contradictory performance mandates, which cannot be met, and habitually suffer the horrendous downstream consequences that fall out, when these are missed? What is the point of an organisation that exists only to issue impossible demands to people that, try as they may, cannot hope to deliver them? Is the pretence that everything is fine really sustainable?
The board, for their part in the fiasco, fear the actions of their investors, who can withdraw their support in microseconds. What do investors know about making products? Probably very little. It isn’t their thing. They just want returns and don’t care how those returns are obtained. Because they don’t care how, they open themselves to needless risk, as downstream actors find every possible way to game the system, to give the superficial appearance of unstoppable returns. They’re complicit in their own deception.
One possible response to investor flight is differential dividends. If long term stock holders were rewarded for sticking with the organisation, while it configured itself for better performance and returns, through better dividends than short term stock holders, things might change. There may be many ways that saner investor behaviour could be nudged and encouraged.
Do corporate boards even care about making products well? Who can sanction them for their profligate waste of investor resources and for intimidating CEOs into choosing courses of action that cause their companies to fail or under-perform? Do they really want to preside over producing sub-standard, unsatisfactory products? Where exactly does the buck stop? Why are these people permitted to call the shots? What qualifies them to do so? (Other than claims to control mountains of other people’s pension fund cash).
Shitty products are a corporate governance issue. All the financial assumptions and beliefs about the efficacy of top-down, hierarchical management are demonstrably wrong. If the board scares the CEO into scaring the company’s employees into doing what they know to be the wrong thing, with respect to product development, then isn’t the tail wagging the dog? What qualifies them to pull rank in this way? Why is the board scared of their institutional investors? Shouldn’t the story be told of doing the right product development things returning more to investors? Who should tell that story?
Why is everybody in the chain so averse to delivering, or being associated with, what they think is bad news? Fixing a broken product delivery system ought to be great news. Bad news about reduced output, insufficient resources or capacity to meet demands, the system itself needing attention and continuous improvement, or the need for maintenance and refactoring won’t go away just because it isn’t exposed or addressed.
Addressing it is the sanest possible thing an organisation can do. If an investor thinks they’d prefer to put their money in an organisation that doesn’t need to continuously improve their systems, they’re believing in Santa Claus. A company that never changes, to keep up with changes in customer expectations, is the riskiest, worst possible place to invest your money. I wouldn’t.
These are facts of life and only “bad news” if you think you can walk between the raindrops and avoid getting wet. If investors don’t see the return from investing in these things, then they’re tourists — dabbling in product delivery without understanding it. Who do they think is going to invest in putting their company into a more productive state? Will fairies do it, or do they imagine they can ignore it and the things that are ailing the organisation will simply go away, of their own accord? In truth, an organisation that is open about this, which takes positive steps to restore their systems and code base, so that output can be resumed or improved, is a better organisation than one that “quietly sits on smelly things”.
In other words, on the blind, ignorant whim of what investors will accept as “good quarterly results”, boards and CEOs impose a lot of misery on employees, short-change customers and render their investments less valuable than they otherwise could be. It’s investor overreach, really — interference in matters their money doesn’t qualify them to influence. They think they’re getting what they want, but they’re definitely not getting what they need.
When is somebody going to call them out on their faulty cognition? Who will tell the less fictitious stories, to those that hold on to magical thinking?
I’m pretty sure that unless there are reforms and changes further up the chain, team-level tinkering is never going to solve the essential and existential problems product managers face. All their efforts to continuously improve product flow will amount to a colossal waste of time, in the wider scheme of things. There is no choice but to speak up.
About the author
Michael Topic is a freelance Product Manager with over thirty years experience delivering products that didn’t exist before. He welcomes contract enquiries to define new, competitive products, design them and deliver them. His speciality is software-based products.
Disclaimer
The opinions offered in this article are intended to describe common scenarios that sometimes occur in general product management practice. They are in no way intended to be read as referring to any particular employer, past or present.
