Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Driving Strategic Choices for Agile Product Portfolios


Published on

Most agile improvement is focused at teams, but product failures happen before the first developer is assigned. How do we apply good validation, product/portfolio strategy and market thinking ahead of big engineering commitments? How do organizational decision-making biases shape our approach? Agile teams building commercial (for-sale) products aren't enough (by themselves) to win in the marketplace.

Published in: Business
  • Be the first to comment

Driving Strategic Choices for Agile Product Portfolios

  1. 1. Driving Strategic Choices for Agile Product Portfolios Rich Mironov Tri-Valley Agile Leadership Network 26 May 2015 w w w . M I R O N O V . c o m 1
  2. 2. • Veteran product manager/exec/strategist • Business models, agile, organizing product organizations • “What do customers want?” • 6 startups, including as CEO/founder • “The Art of Product Management” • First Product Camp, Agile Alliance product track chair ABOUT RICH MIRONOV w w w . M I R O N O V . c o m 2
  3. 3. For revenue software and software-enabled companies: • Validation and strategy should precede full development • Organizational behaviors shape decision-making • Explicit portfolio allocations enable feature-level prioritization AGENDA w w w . M I R O N O V . c o m 3
  4. 4. • Make money by shipping market-winning software • Software profits are all about scale • $5M for First Customer Ship, $0 for the next 10,000 units • No company ever has enough development capacity • Segmentation is strategic art of choosing similar customers who want same solution (product) • Can’t let any single customer’s opinion dominate REVENUE SOFTWARE COMPANIES AND SOFTWARE-ASSISTED COMPANIES 4w w w . M I R O N O V . c o m
  5. 5. There’s nothing more wasteful than brilliantly engineering a product that doesn’t sell. w w w . M I R O N O V . c o m 5
  6. 6. • No natural prioritization of development work without an underlying strategy • Need to correctly frame (and force-rank) customer needs • No development team big enough to fulfill all dreams of your execs PRIORITIZATION REQUIRES STRATEGY 7w w w . M I R O N O V . c o m
  7. 7. • Too little agility at strategic/portfolio level? • Annual budget, 6 month candidate review • Full waterfall requirements/specs/designs • Process-bound, uncompetitive, products always late • Our mean time to decide > competitor’s mean time to ship • Too much (overused) agility? • ADHD/shiny object: initiatives change monthly • Weak validation, business case, pricing, competitive info • Many projects abandoned late in cycle • First a product/business problem, then an engineering problem STRATEGIC AGILITY: CRITICAL PRODUCT MANAGEMENT ISSUE 8w w w . M I R O N O V . c o m
  8. 8. FASTER CARS NEED BETTER DRIVERS 9w w w . M I R O N O V . c o m
  9. 9. market information, priorities, requirements, roadmaps, epics, user stories, backlogs, personas, MRDs… product bits strategy, forecasts, commitments, roadmaps, competitive intelligence budgets, staff, targets Field input, Market feedback Segmentation, messages, benefits/features, pricing, qualification, demos… Markets & CustomersDevelopment Marketing & Sales Executives Product Management WHAT DOES A PRODUCT MANAGER DO? w w w . M I R O N O V . c o m 10
  10. 10. • Large software companies spend 12%-18% on Engineering • So revenue is about 6x development costs • Headcount math: $1M/year buys 5-6 people in US • Dev, test, docs, product mgmt, project mgmt, release ops… • $1M/year more in Engineering  $6M/year revenue • +1 headcount  +$1M/year revenue PRODUCT COMPANIES: A FEW FINANCIALS w w w . M I R O N O V . c o m
  11. 11. PRODUCT SUCCESS FOOD CHAIN w w w . M I R O N O V . c o m 12 Is this a good problem to solve? (product mgmt) Do we have a good solution design? (dev, UX, QA, support) Can we implement efficiently, agilely? (program mgmt) Can we go to market and bring in revenue? (marketing, sales)
  12. 12. COMMERCIAL SOFTWARE FAILURE MODES w w w . M I R O N O V . c o m 13 Undifferentiated , poorly positioned 15% Marketing/Sales /Channel failures 25% Late Delivery* 15% Poor Quality* 10% Wrong problem, wrong solution or product 35% *Engineering/program management scope
  13. 13. Most of the success/failure of a product is determined before we pick our first developer or fill out our first story card w w w . M I R O N O V . c o m 14
  14. 14. • Hard to attribute success/failure • Sales teams paid to subvert corporate goals • Revenue estimates have huge error bars • Executives don’t believe in mutually exclusive development choices • Shiny objects, confirmation bias, groupthink • Politics and Big Swinging Budgets ORGANIZATIONAL CHALLENGES TO STRATEGIC PRODUCT THINKING 15w w w . M I R O N O V . c o m
  15. 15. • Limited development resources = household budget • Too many expenses: rent, food, repairs, entertainment, college fund, property taxes, Girl Scout cookies… • Kids Execs don’t remember what we spent committed to yesterday PORTFOLIO PLANNING 16
  16. 16. • Hard to rank-order unlike items • Where does this bug go versus minor features? • A one-off customization versus more Dev Ops work? • Instead, group similar requests • Which two features will we put into v6.5? • P0, P1, P2, P3… • We can fund only one audacious, long-term program: teleportation or synthetic petroleum • Cross-bucket trade-offs reflect our biases PRIORITIZING WITHIN BUCKETS 17w w w . M I R O N O V . c o m
  17. 17. TYPICAL COMMERCIAL SOFTWARE COMPANY R&D BUDGET* w w w . M I R O N O V . c o m 18 Features for current release 50% Quality (refactor, test automation) 15% Engineering overhead, 10% Big future bet, 5% Sales one-offs, non-roadmap 20% *In my personal experience
  18. 18. VARIES WITH GROWTH STAGE Current release 50%Quality 20% Eng Overhead 5% Sales one-offs 25% Current releases/feat ures 35% Quality 35% Future bet 5% Eng Overhead 15% Sales one- offs 10% v1.0 software startup Mature software (post-innovation) w w w . M I R O N O V . c o m 19
  19. 19. • This quarter, how should we spend our precious feature-focused story points? • 70% on deployability, 20% on cost reduction? -OR- • 60% on scaling, 30% on hardware reliability? • What was our actual spending last quarter? • What portion was “unplanned” or sales interrupts? PORTFOLIO STRATEGY = FORCING HARD TRADE-OFFS 20w w w . M I R O N O V . c o m
  20. 20. • “QA and Support teams can sort P1/P2 bugs any way they like, using WSJF or any other method. Max 310 story points in Q3.” • “Performance improvement goal is 65% faster transaction processing. Architect leads story writing.” • But customer-visible features are heavily lobbied and highly political. Product Management needs to be Development’s heat shield. ALLOWS DECENTRALIZED DECISION-MAKING 21w w w . M I R O N O V . c o m
  21. 21. • Users understand problems, but mis-design solutions • Have we asked enough people/the right people? • Watch for confirmation bias • …Before full-scale development starts • $2M+/year burn rate creates its own momentum • Then frequent prototypes and early versions INTELLECTUALLY HONEST VALIDATION (LEAN TOOLS) 22w w w . M I R O N O V . c o m
  22. 22. 23 • Must have product strategy/product management • Hire for experience, not convenience • Validation before full development • A month of good market input might save $2M in pivots • Then frequent exposure/re-validation/piloting throughout • Set product-level and portfolio-level spending allocations • One-off choices trend in same direction • Build a deeply agile development capability TAKE-AWAYS w w w . M I R O N O V . c o m
  23. 23. CONTACT Rich Mironov, CEO Mironov Consulting 233 Franklin St, Suite #308 San Francisco, CA 94102 RichMironov @RichMironov +1-650-315-7394