Empowered by Marty Cagan

Behind Every Great Company

In this book, I want to share and highlight the differences between how the best companies create technology-powered products and how most companies create products.

The differences are both fundamental and striking.

The differences certainly include what many people think of as "product culture," but strong product companies often have very different cultures from one another, so it clearly goes beyond that.

For example, consider Amazon, Google, Apple, and Netflix. I would argue all four are very strong product companies, having consistently innovated for many years, yet they each have very different cultures.

I still believe culture is extremely important, but there is something about great product companies that is more fundamental.

It comes down to the views they have on the role of technology, the purpose of the people who work on the technology, and how they expect these people to work together to solve problems.

Moreover, I don't think it's an accident that, despite their different cultures, these four companies have the most important elements in common.

What I will try to do in this book is untangle the parts of the cultures of these companies that are more a reflection of their founders' personalities from those that are essential to consistent innovation.

I want to share the important lessons I've learned regarding what separates the best from the rest.

One surprising common thread among many of the best product companies is the legendary coach, Bill Campbell. During their formative years, Bill literally provided executive coaching to the founders of Apple, Amazon, and Google, as well as several others.

To get a sense of Bill's views and values, here is one of my favorite quotes about the role of leadership in a strong product company:

Leadership is about recognizing that there's a greatness in everyone, and your job is to create an environment where that greatness can emerge.

This book is all about identifying what makes such an environment, and I want to encourage you to consider adopting these important practices and behaviors.

Please note that I am not arguing that these strong product companies are models of virtue. All of them have been justifiably criticized about some of their policies and practices.

But when it comes to the ability to consistently innovate, all four of these companies have demonstrated their skills, and I believe there is much to be learned from them.

At the core, I see three critically important differences between the strongest product companies and the rest:

The first is how the company views the role of technology.

The second is the role their product leaders play.

The third is how the company views the purpose of the product teams--the product managers, product designers, and engineers.

Let's take a closer look at each of these.

The Role of Technology

There is a fundamental difference between how strong companies view the role and purpose of technology as compared to most other companies.

At its most basic level, the vast majority of companies view technology as a necessary expense. They know it's important, but they think of it more as a cost of doing business. If they can outsource the labor, even better.

Fundamentally, they don't really consider themselves in the technology business. Instead, they think of themselves as in the insurance business, or the banking business, or the transportation business, or whatever. Certainly, they need some technology to operate, but it's viewed as a subservient role to "the business.

Because of that, in most companies, technology teams exist to serve the business.

That is very often the exact phrase you will hear. But even if they aren't explicit about it, the different parts of "the business" end up driving what is actually built by the product teams.

In contrast, in strong product companies, technology is not an expense, it is the business. Technology enables and powers the products and services we provide to our customers. Technology allows us to solve problems for our customers in ways that are just now possible.

Whether the product or service is an insurance policy, a bank account, or an overnight parcel delivery, that product now has enabling technology at its core. As such, in strong product companies, the purpose of the product team is to serve customers by creating products customers love, yet work for the business.

That is a profound difference, which impacts nearly everything about the company and how it works, and results in much higher motivation and morale. And most important, it results in a much higher level of innovation and value for customers and the business.

Strong Product Leadership

In most product companies, the role of true product leadership is largely missing in action.

Instead, they are mainly there as facilitators, responsible for staffing the in-house (or even worse, outsourced) feature factory, and keeping the trains running on time.

In most companies, there is no product strategy. Notice I didn't say a bad product strategy-I mean literally no product strategy. The feature teams are simply there "to serve the business."

The business certainly has reasons for what they request or put on the roadmaps, but they very rarely have a product strategy, or even the skills or data required to create one.

The stakeholders end up providing product teams with a prioritized list of features and projects that they need completed this quarter or this year. So, the "product strategy," if you could even call it that, is really about trying to please as much of the business as possible.

When technology product companies moved to Agile methods over the past 10-20 years, many managers and leaders questioned whether they were still necessary, since team members would be expected to take a much more active role in how they work.

I realize this is counterintuitive to many people, but while moving to truly empowered teams does require moving away from the old command-and-control model of management, it does not mean you need fewer leaders and managers. It means you need better leaders and managers.

It's actually easier for a manager to manage (often micromanage) in the old command-and-control style. It's not hard to assign a team a list of activities, or a list of features to build, and just tell them to do the work as fast as they can.

While this command-and-control style may be easier for the manager, it creates teams of mercenaries with no empowerment in any meaningful sense. In contrast, in strong product companies, the product leaders are among the most impactful leaders in the company.

They are responsible for staffing and coaching the product teams; they are responsible for the product strategy and converting the strategy into action; and they're responsible for managing to results.

Empowered product teams depend on skilled product managers, product designers, and engineers, and it is the leaders and managers who are responsible for recruiting, hiring, and coaching these people.

Further, a focused and compelling product strategy--based on quantitative and qualitative insights--is among the most important contributions of product leadership.

Empowered Product Teams

In most companies, the technology teams are not empowered product teams, they are what I call here feature teams.

Feature teams look superficially like a product team. They are cross-functional, with a product manager, a product designer, and some number of engineers.

The difference is that they are all about implementing features and projects (output), and as such are not empowered or held accountable to results. The feature teams get to work first designing the features on the roadmap, maybe doing a little usability testing, and then proceeding to building, QA testing, and deploying the features (known as delivery).

These feature teams sometimes claim they're doing some product discovery, but they rarely are. They've already been told what the solution should be; they're not empowered to go figure out the solution themselves. They're just there to design and then code.

In these feature teams, there is usually a person with the product manager title, but they are mainly doing project management. They are there to ensure the features get designed and delivered. Necessary perhaps, but this is not product management.

Because the teams are provided, or are pressed to provide, roadmaps of features and projects, the focus of the team is delivery--delivery of these features. And features are output. Even if someone were to complain of lack of business results, who would you hold accountable?

In contrast, in strong product companies, teams are instead given problems to solve, rather than features to build, and most important, they are empowered to solve those problems in the best way they see fit. And they are then held accountable to the results.

In the empowered product team model, the product manager has a clear responsibility, which is to ensure that the solutions are valuable (our customers will buy the product and/or choose to use it), and viable (it will meet the needs of the business). Together with a product designer who is responsible for ensuring the solution is usable, and a tech lead who is responsible for ensuring the solution is feasible, the team is able to collaborate to address this full range of risks (value, viability, usability, and feasibility). Together, they own the problem and are responsible and accountable for the results.

So, to summarize feature teams vs. empowered product teams:

Feature teams are cross-functional (a product manager doing mainly project management, a product designer, plus some engineers), and assigned features and projects to build rather than problems to solve, and as such they are all about output and not business results.

Empowered product teams are also cross-functional (a product manager, a product designer, and engineers), but in contrast to feature teams, they are assigned problems to solve, and are then empowered to come up with solutions that work- measured by outcome-and held accountable to results.

The Role of Technology

I promise that this book is very practical, and you'll be able to directly apply everything we discuss.

But in this one chapter, if you'll bear with me, we need to get just a little philosophical.

It is plain to see the difference between feature teams and empowered product teams.

It is plain to see when companies view teams as there to serve the business, versus when they're there to serve customers in ways that work for the business.

It is plain to see when a company is just trying to please as many stakeholders as possible, versus when they have a clear and intentional product strategy. But while these differences might be plain to see, that does not explain why these differences exist.

If we hope to close the gap between the best and the rest, we need to look at the root cause of this gap.

Roughly a decade ago, Marc Andreessen published what I consider one of the most important essays of our time, "Why Software Is Eating the World." He described why he believed that technology was about to cause major disruption across virtually every industry. He gave voice to what I had been seeing in my own work-primarily with the disruptors, but occasionally with those under threat of disruption.

Ten years later, it's clear he was remarkably prescient.

That said, most companies seem to have not really understood his warnings.

Yes, they're all spending more on software now.

Yes, they've (mostly) moved to Agile methods.

But most have not transformed in any meaningful sense, and in particular most have not embraced technology as the business enabler it is.

The examples of this are unfortunately everywhere.

One of the clearest and most egregious recent examples has to be the absolute ineptitude of the leadership at Boeing with the software at the heart of the aircraft manufacturer's shocking 737 MAX crisis.

Boeing's fundamental mistake was to consider this technology as just a necessary cost, rather than the core competency that enables them to provide the safest, most fuel-efficient, and most cost-effective airplanes available.

Rather than staffing an empowered product team-continuously working to provide the safest, most fuel-efficient, mission-critical control software--they decided to outsource this technology, thinking they could maybe save a few dollars.

It's not just the aerospace industry. The automotive industry has suffered from this mindset for decades, until Tesla came along and proved what is truly possible when technology is at the core of the car, rather than treated as just a necessary cost. Going far beyond navigation and entertainment systems, using technology at its core and over-the-air updates, a Tesla actually improves over time rather than simply depreciating. Consider that for a moment.

Pixar has shown the film industry what is truly possible when technology is at the core of an animated feature film, rather than just a necessary cost. Pixar uses technology in ways far beyond traditional film-making, and the technology teams are as valued as the creative teams.

As you may know, Pixar is now part of Disney, and look at how Disney has embraced technology to completely reimagine so many of their existing businesses. This includes everything from their legacy theme parks to what they've recently done with the Disney+ video streaming service.

The same story is playing out in the insurance, banking, health care, telecommunications, education, agriculture, transportation, and defense industries. I could keep going.

Often, when I am having dinner with one of the CEOs from a company that doesn't get this, they'll tell me how they're not a technology company-they're an insurance company, or a health care company, or an agricultural company.

I'll say, "Let me tell you what I would do if I was a product leader at Amazon or Apple, and we've decided to go after your market because we believe it is large and underserved, and that technology is available that enables dramatically better solutions for your customers."

After describing how we would set up our teams around the enabling technology to optimize for true innovation, I also point out that, competitively, we would be betting on them not being able to respond because they would be too busy trying to protect their old business.

It's not that these CEOs don't admire what companies like Amazon and Netflix and others have done -they generally do. It's that they don't see how these lessons apply to them. They don't understand what Marc was trying to warn them about.

Of course, there are many possible reasons why the CEOs of these companies have been so slow to grok this. Sometimes, they have worked in the old world of business so long that they need more time to wrap their head around the changes. Sometimes, I can't help but feel like they are fearful of technology.

Sometimes, they just seem to be resisting change. But, ultimately, these are all just excuses. The board is supposed to be there to ensure the CEO is able to effectively lead the company.

What is especially ironic is that these companies are almost always spending far more on technology than they need to. In fact, I've never seen more wasted technology investment than I find in these companies that don't understand the true role of technology.

Rather than outsourcing hundreds or even thousands of mercenary engineers--and providing them roadmaps of features from their stakeholders which rarely generate the necessary business results--I explain to them that they will receive a much greater return from a significantly smaller number of the right employees. Employees who are given business and customer problems to solve and are held accountable to the results.

One way or another, becoming one of the best companies today requires senior leaders who understand the true and essential role of technology.

Strong Product Leadership

The heart of this book is the importance of strong product leadership.

To be clear, by "product leadership" I mean the leaders and managers of product management, the leaders and managers of product design, and the leaders and managers of engineering.

For this discussion, I will distinguish between leaders and managers. Certainly, many leaders are also managers, and many managers are also leaders, but even if both roles are covered by the same person, there are different responsibilities.

Overall, we look to leadership for inspiration and we look to management for execution.

The Role of Leadership -Inspiration

The subject of strong leadership, is of course, a major topic, but it is a clear and visible difference between strong product companies and most companies.

The purpose of strong leadership is to inspire and motivate the organization. If product teams are to be empowered to make good decisions, they need to have the strategic context necessary to make those decisions.

Part of the strategic context comes from the senior leaders of the company, such as the purpose of the business (the mission) and critical business objectives, but the product leadership has four major explicit responsibilities:

1.Product Vision and Principles?The product vision describes the future we are trying to create and, most important, how it improves the lives of our customers.

It is usually between 3 and 10 years out. The product vision serves as the shared goal for the product organization.

There may be any number of cross-functional, empowered product teams-ranging from a few in a startup, to hundreds in a large enterprise--but they all need to head in the same direction and contribute in their own way to solving the larger problem.

Some companies refer to the product vision as their "North Star"-in the sense that no matter what product team you're on, and whatever specific problem you're trying to solve, you can all see and follow the North Star. You always know how your piece contributes to the more meaningful whole.

More generally, the product vision is what keeps us inspired and excited to come to work each day- month after month, year after year.

It is worth noting that the product vision is typically the single most powerful recruiting tool for strong product people.

Product principles complement the product vision by speaking to the nature of the products that your organization believes it needs to produce. The principles reflect the values of the organization, and also some strategic decisions that help the teams make the right decisions when faced with difficult trade-offs.

2.Team Topology?The "team topology" refers to how we break up the work among different product teams to best enable them to do great work. This includes the structure and scope of teams, and their relationship to one another.

3.Product Strategy?The product strategy describes how we plan to accomplish the product vision, while meeting the needs of the business as we go. The strategy derives from focus, then leverages insights, converts these insights into action, and finally manages the work through to completion.

4.Product Evangelism Another critical role of leaders is communicating the product vision, principles, and product strategy -both to the internal product organization, and also across the company more broadly.

John Doerr, the famous venture capitalist, likes to explain that "We need teams of missionaries, not teams of mercenaries.

If we want teams of missionaries, it's essential that every person in the organization understands and is convinced--they need to be true believers.

This requires an ongoing crusade of evangelizing-in recruiting, onboarding, weekly 1:1 coaching, all-hands meetings, team lunches, and everything in between.

The larger the organization, the more essential it is to be very good at evangelism, and it's important for the leaders to understand that evangelism is something that is never "done." It needs to be a constant.

We want to ensure that every member of the product organization has joined because they sincerely believe in the larger purpose.

Normally, it is the product vision that describes what people are signing up for, but one way or another, we need to ensure the people on the team are true believers.

For example, if your vision is to deliver mass-market electric cars, then we need people that are willing to take the leap of faith that this is both possible and worthy. Note that it is not a problem if the person you hire has different views on what might work to get us to mass-market electric cars, but it is not helpful, for example, to hire a passionate advocate for internal combustion engines.

The Role of Management-Execution

There are of course many types of "managers" in a company. I'm most interested here in those people responsible for hiring and developing the actual members of the cross-functional product teams.

Normally, this includes the director of product management, the director of product design, and the managers and directors of engineering. I'm not focused here on more senior-level managers (managers of managers), or non-people managers (such as product managers or product marketing managers).

If you want to have truly empowered product teams, then your success depends very directly on these first-level people managers.

If you are wondering why there are so many weak product companies in the world, this would be the primary culprit. And until and unless this is corrected, there's little hope for transformation.

It is important that these managers understand--and can effectively communicate--the product vision, principles, and product strategy from the senior leaders. Beyond that, these managers have three critically important responsibilities:

1.Staffing These are the people we hold responsible for staffing the product teams. This means sourcing, recruiting, interviewing, onboarding, evaluating, promoting, and when necessary, replacing the members of the teams.

If you have an HR function at your company, they are there to support managers with these activities, but they are in no way a substitute for the manager in these responsibilities.

2.Coaching Probably the single most important, yet most often overlooked, element to capable management is coaching. At the very minimum, this involves a weekly 1:1 with the people who report to you as their people manager.

It is the most important responsibility of every people manager to develop the skills of their people. This most definitely does not mean micromanaging them.

It does mean understanding their weaknesses and helping them to improve, providing guidance on lessons learned, removing obstacles, and what is loosely referred to as "connecting the dots."

For example, let's say you are the manager of product design, and you meet each week for an hour or so with each of the six product designers from six different product teams that work for you.

These six product designers are each first-class members of their cross-functional product teams (because design is a first-class activity, and as such it needs to partner closely with the product manager and engineers as they tackle and solve hard problems). But even if that designer is exceptionally skilled, how can she be expected to keep track of what is going on with all the other product teams? What if the design she is working on right now for her situation is in some way inconsistent or incompatible with solutions underway with other teams? The design manager is expected to flag these conflicts and get the relevant designers together to consider the bigger picture and the impact of the different solutions on the user.

More generally, every member of a product team deserves to have someone who is committed to helping them get better at their craft. This is why, in the vast majority of strong tech product organizations, the engineers report to experienced engineering managers; the designers report to experienced design managers; and the product managers report to proven managers of product management.

3.Team Objectives?The third responsibility of the people managers is to ensure that each product team has one or two clear objectives they have been assigned (typically quarterly) which spell out the problems they are being asked to solve.

These objectives derive directly from the product strategy--it's where insights are turned into actions.

This is also where empowerment becomes real and not just a buzzword. The team is given a small number of significant problems to solve (the team objectives).

The team considers the problems and proposes clear measures of success (the key results), which they then discuss with their managers. The managers may need to iterate with their teams and others to try and get as much coverage as possible of the broader organization's objectives.

The litmus test for empowerment is that the team is able to decide the best way to solve the problems they have been assigned (the objectives).

It takes strong managers to be self-confident and secure enough to truly empower the people that work for them, and to stand back and let the team take credit for their successes.

Empowered Product Teams

What is most surprising to me is that the virtues of truly empowered product teams are not a secret. In fact, there are plenty of books and articles out there that describe why these types of teams are so much more effective at innovation and in solving hard problems.

While quite a few these books are inspiring and well worth reading, most companies have not been convinced to empower their teams in any meaningful sense. Why is that?

When I ask this question of CEOs and other key leaders of these organizations, the answer typically boils down to one word: trust.

The leaders don't trust the teams. Specifically, they don't believe the have the level of people on their teams they need to truly empower them. So, along with the other key business leaders from across the company, they believe they need to very explicitly direct the teams themselves. This is also known as the "command-and-control" model of management.

When I ask these leaders why they don't put people in place that they do trust, they usually argue that they either can't find, can't afford, or can't attract the level of people that Google, Amazon, Apple, and Netflix hire.

I then point out to them the many people I know who have moved from companies like theirs to one of these leading companies, and how their performance dramatically improved in the process.

And further, having worked with many people at each of these companies, I point out how ordinary the vast majority of the people on these teams actually are. Maybe the important difference lies elsewhere?

Maybe these strong companies have different views on how to leverage their talent in order to help their ordinary people reach their true potential and create, together, extraordinary products.

Coaching

Coaching is no longer a specialty; you cannot be a good manager without being a good coach. -Bill Campbell

Bill made this statement years ago, but one of the major learnings of our industry post-pandemic, is that coaching is more essential than ever. If you hope to innovate at scale, it is simply not optional. Problems escalate faster, relationships are damaged much more easily, and collaboration is harder. Which is why you'll notice that the longest part of this book is on coaching. That is no accident.

In the technology industry, we focus so much on the core skills and competencies used by product managers, designers, and engineers, but so little on the skills and competencies of managers and leaders. Yet it is these managers and leaders who are responsible for molding people into effective teams.

The logic is simple: Your company depends on successful products. And successful products come from strong product teams.

Coaching is what turns ordinary people into extraordinary product teams.

If a product team is not effective, we need to look hard at the people on that team and see where we can help them improve as individuals, and especially as a team.

The chapters in this part highlight the most important areas of coaching and development for members of product teams. Unless you've been personally coached by an experienced manager, many of the topics may be new to you. Certainly, if you can speak from experience on these topics, so much the better, but if not, it is still valuable to be able to discuss the topic openly. You can learn and improve together.

More than anything, good coaching is an ongoing dialog, with the goal of helping the employee to reach her potential.

Staffing

In the next series of chapters, I focus on the manager's staffing responsibilities.

I've made a big deal in the chapters so far about how important it is to coach and develop your people, but I have not talked yet about how to find these people.

Of course, much has already been written about staffing and hiring by many others.

What I'll be focusing on in these chapters is what is special about staffing when it comes to empowered product teams- especially product managers, product designers, and senior engineers/tech leads.

I'll start with recruiting, and then cover interviewing, hiring, onboarding, annual performance reviews, terminations, and promotions.

This might not seem like such an important or interesting topic to you--I know early on in my own product leadership career it was not--but I hope to change your mind about this, as it's one of the clear and essential differences between strong product companies and the rest.

There are three higher-order problems I see in companies when it comes to staffing:

The?first?is that there is often very fundamental confusion about what to look for when hiring strong product people. Too often the company thinks that, if they want to compete with the likes of Google and Amazon, they need to hire exceptional people. This is a dangerous misconception.

Let me be clear on this: the best product companies hire competent people of character, and then coach and develop them into members of extraordinary teams.

This is why staffing and coaching go hand in hand.

The?second?is that, in far too many companies, the leaders equate staffing with hiring. But it's a much larger problem than just hiring, and in fact, if you focus just on hiring, you will dramatically reduce your chances of building the organization you need.

The?third?higher-order point is to realize that staffing is the responsibility of the hiring manager.

Far too often, I find that the hiring manager believes this is the responsibility of HR, and that while she might review some resumes, and participate on the interview team, she thinks of herself as just a passenger on the journey and not the driver.

While HR can hopefully assist with some of the supporting and administrative tasks (such as posting job descriptions, passing along resumes, and preparing offer letters), effective staffing begins with realizing that a successful outcome requires that the hiring manager step up and take responsibility for this.

If nothing else, I hope this series of chapters makes clear why this is the case. More generally though, staffing is another one of the areas where strong product companies are dramatically better than most companies.

The most important decision at Amazon, has been, and remains, hiring the right talent. -Jeff Bezos

And this is in no small part a direct result of the strong company's reliance on the empowered team model. This is because the empowered team model is truly a people-first model. You are hiring capable people and giving them the space to do remarkable things.

For companies still in the feature team model, the people are mercenaries. They believe they can always hire others, or they might even hire an agency and outsource the work.

But for those companies committed to the empowered team model, everything depends on hiring competent people who share your values and are passionate about pursuing your product vision. And that means that staffing must move from a necessary task to a strategic skill.

Most people coming from a feature team-style company are surprised to see the differences in terms of recruiting, the seriousness of the interview process, how much time they devote to new employee onboarding, and most important, the ongoing effort in coaching and developing their people to reach their potential.

I am not suggesting that there is only one good way to handle staffing, but I am suggesting that these activities deserve much more attention than most companies and hiring managers devote to it.

I'll go further and suggest that skill in staffing is one of the most important and telling leading indicators for a company's success.

Product Vision and Principles

Most companies have some sort of mission statement that summarizes the purpose of the business (e.g., "organize the world's information"), but a mission statement typically says nothing about how we plan to deliver on this mission.

This is the critical role of the product vision.

An inspiring and compelling product vision serves so many critical purposes that it is hard to think of a more important or higher-leverage product artifact: A good product vision keeps us focused on the customer.

A good product vision serves as the North Star for the product organization so that we have a common understanding of what we are hoping to accomplish together.

• A good product vision inspires ordinary people to create extraordinary products.
• A good product vision provides us with meaningful work. A list of features on a roadmap is not meaningful. How you can positively impact the lives of users and customers is meaningful.
• A good product vision leverages relevant industry trends and technologies that we believe can help us solve problems for our customers in ways that are just now possible.
• A good product vision provides the engineering organization with enough clarity about what's coming in the next several years so they can ensure they have in place an architecture that can serve the need
• The product vision is a primary driver of the team topology.

Because of these things, a strong product vision serves as one of our most powerful recruiting tools for strong product people. It also serves as one of our most powerful evangelism tools to enlist the necessary help and support of colleagues from all across the company-ranging from senior executives, to investors, to sales and marketing staff.

Admittedly, a good product vision is also a bit of an art form, as fundamentally it is a persuasion tool. However, it's also important to not be too detailed or prescriptive, which runs the risk of product teams confusing the vision with a specification.

When done well, the product vision is compelling, inspiring, and empowering-leaving the product teams feeling excited to begin the hard work of making this vision a reality.

Team Topology

Most technology products today are large and complicated

Though there are exceptions, it's rare that an entire product will be developed by a single product team. Most products require many teams working together-dozens or even hundreds.

This means that every product organization must deal with the question of how to structure their product teams in order to best divide the work.

I've written about this topic of structuring and scoping product teams before, including in INSPIRED.

However, because this topic relates so strongly to the level of empowerment, in this series of chapters I want to go deeper.

I've started referring to this topic of team scoping as team topology. I like this term because it captures the idea of an arrangement of constituent parts in a larger system.

A product organization's team topology answers questions such as:

• How many product teams should our organization have?
• What is the scope of responsibility of each team?
• What are the skills required for each team, and how many of each skill?
• What are the dependencies between the teams?

More generally, the topology helps answer the question of how a company should organize its product people into teams to best enable them to do great work.

If you are a product leader, establishing an effective team topology is one of your key responsibilities. It's also one of the most complex because there are so many factors to consider. This has always been true, but with the rapid rise of remote employees, there is another layer of complexity impacting the topology.

First and foremost, your topology choices should be guided by principles that support team empowerment.

These include giving teams real ownership of the space of problems they will be responsible for, providing autonomy in their ability to deliver the solutions to the problems they're asked to solve, and alignment with various aspects of the company's customers, business, and technology.

Alignment itself is complex and requires reconciling the scope of individual teams with the broader context of business goals, types of customers, organizational reporting structure, technology architecture, and product vision.

Another important consideration is the number and nature of the dependencies between product teams. Every topology creates its own set of dependencies between product teams, and leaders must consider the trade-offs.

Finally, even though we work hard to keep teams stable and durable, leaders must consider that the team topology will need to evolve over time as the needs and circumstances change.

One practical point to keep in mind as you consider the points in the chapters that follow: The team topology you choose needs to be a decision made by the leaders of product and design, and the leaders of engineering, working together. The best topology will balance the needs of these key product leaders.

In the next several chapters, we'll explore these considerations and how they relate to empowerment.

We'll also describe common patterns for designing team topologies and when to use them.

Product Strategy

Ultimately, empowered product teams are all about giving teams hard problems to solve, and then giving them the space to solve them.

But, how do we decide which problems they should solve?

Answering that question is what product strategy is all about.

An effective product strategy is absolutely essential to enabling ordinary people to create extraordinary products, because it focuses and leverages their talents.

Remarkably, most product organizations I meet don't even have a product strategy.

They have no shortage of features and projects being worked on, and everything they are building is being built for a reason, but as you'll see, they have no product strategy.

If you've never seen the great South Park clip on the Underpants Business, I'd encourage you to pause for a minute and take a look.

Seriously, this is really what I see in so many of the companies I visit. They have product teams that are more accurately feature teams, and they're slaving away-pounding out features all day-but rarely getting closer to their desired outcomes.

This results in two things:

First, there is a depressing amount of wasted effort (primarily due to their dependence on product roadmaps).

Second, they are not putting enough concentrated brainpower behind the most important problems to achieve the results their company needs.

You may wonder how it is that so many companies don't have a good product strategy-I know I do. Richard Rumelt gives us a hint:

Not miscalculation, bad strategy is the active avoidance of the hard work of crafting a good strategy. One common reason for choosing avoidance is the pain or difficulty of choice. When leaders are unwilling or unable to make choices among competing values and parties, bad strategy is the consequence.

So, what even is product strategy, and why is it so important? "Strategy" as a term is ambiguous as it exists at every level for just about everything--business strategy, go-to-market strategy, growth strategy, sales strategy, discovery strategy, delivery strategy, and so on.

Whatever the goal is, your strategy is how you're planning to go about accomplishing that goal.

Strategy doesn't cover the details--those are the tactics we'll use to achieve the goal. Strategy is the overall approach and the rationale for that approach. While there are many forms of strategy, what I care about here is product strategy. Which in short means: How do we make the product vision a reality, while meeting the needs of the company as we go?

So many of the companies I meet have a goal (such as doubling revenue), and they have a product roadmap (the tactics), yet no product strategy to be found In terms of empowered product teams, product strategy helps us decide what problems to solve, product discovery helps us figure out the tactics that can actually solve the problems, and product delivery builds that solution so we can bring it to market.

So why is product strategy so hard?

Because it requires four things that are not easy for most companies:

1. The first is to be willing to make tough choices on what's really important.
2. The second involves generating, identifying, and leveraging insights.
3. The third involves converting insights into action.
4. And the fourth involves active management without resorting to micromanagement.

Choices means focus. Deciding what few things you really need to do, and therefore all the things you won't do.

But I can't tell you how many companies I've gone into that have on an office wall or spreadsheet a list of literally 50 major objectives or initiatives they're pursuing.

And each product team complains to me that they really have no time to pursue their own team's product work because they have obligations that cover more than 100 percent of their available time, not to mention all the "keep-the-lights-on" work and dealing with tech debt.

Moreover, many of these 50 major objectives or initiatives are truly hard problems, and just getting a little time slice and no clear ownership from a dozen-or-so different product teams has virtually no chance of making any real impact.

So, focus comes from realizing that not everything we do is equally important or impactful, and we must choose which objectives are truly critical for the business.

While product strategy starts with focus, it then depends on insights And insights come from study and thought.

These insights come from analyzing the data and from learning from our customers. The insights might pertain to the dynamics of our business, our capabilities, new enabling technologies, the competitive landscape, how the market is evolving, or our customers.

Once we have decided what's critically important (focus) and studied the landscape to identify the levers and opportunities (the insights), then we need to convert those insights into action.

In a company that's serious about empowered product teams, this means deciding which objectives should be pursued by which product teams, and then providing those teams with the strategic context necessary for them to solve the problems we need them to solve.

But we're not done there because reality is never static or predictable.

As product teams pursue their objectives, some make more progress than others, some need help or encounter major obstacles, some find they need to collaborate with other teams, some realize they're missing key capabilities, or any of a hundred other possible situations.

Properly managing this activity requires smart, engaged leaders practicing servant leadership.

I've been a student of product strategy for most of my career. After decades of practice, I think I'm reasonably good at it. My favorite activity is still solving the hard problems (product discovery), but if I had to choose, I'd say product strategy is the more important skill, and certainly the more difficult.

In the coming chapters, we'll dive deeper into each of these elements of product strategy-focus, insights, actions, and management. But the bottom line is that product strategy requires choice, thinking, and effort.

Team Objectives

I've been a vocal advocate for the OKR (objectives and key results) technique for many years, but it's no secret that, for most companies that have given it a try, the results have been disappointing.

As I see it. there are three fundamental reasons for this.

Feature Teams vs. Product Teams

If the company is still using feature teams, as most unfortunately are, then the OKR technique is going to be a cultural mismatch, and almost certainly prove a waste of time and effort.

The OKR technique came from companies that had empowered product teams in their DNA. OKRs are first and foremost an empowerment technique.

The main idea is to give product teams real problems to solve, and then to give the teams the space to solve them.

Business Collaboration

Having strong product leaders and empowered product teams is necessary, but it's usually not sufficient.

That's because product work happens in the context of the broader company.

Your CEO matters, as do the rest of your key executives and the various stakeholders representing other key areas of your business.

However, establishing the necessary working relationships with the rest of your business is a different level of hard. It requires a lot more sensitivity and nuance.

Realize that your company is currently used to feature teams that exist very clearly to serve the business, and now you're trying to replace them with empowered product teams that exist to serve our customers, in ways that work for the business.

What this really means in practice is that you need to move your product organization from a subservient model to a collaborative model.

At a very human level, you're asking very senior executives to think differently about teams comprised of ordinary people-individual contributors-who have been coached into extraordinary teams.

This is a very significant change, especially as it impacts the rest of your business. We need to discuss the implications of this change and how you, as a product leader, can guide your company through this change in mindset and responsibilities.

Inspired, Empowered, and Transformed

Great teams are made up of ordinary people who are inspired and empowered.

They are inspired with ideas and techniques for quickly evaluating those ideas to discover solutions that work--that are valuable, usable, feasible, and viable.

They are?empowered?to solve hard problems in ways their customers love, yet work for their business.

Empowered teams that produce extraordinary results don't require exceptional hires.

They do require people who are competent and of character so they can establish the necessary trust with their teammates and with the rest of the company.

Truly empowered teams also need the strategic context that comes from the product leadership-especially the product vision and the product strategy-and the active support of their management, primarily with ongoing coaching.

There are never guarantees for innovation, but we can substantially improve our odds

The Destination

If you recall, I opened this book by describing the situation I so often encounter in companies. Now that we've discussed the work necessary to transform, I'd like to revisit this list, this time with where I hope your transformation will take you.

The Role of Technology

Your company understands the critical and essential role that technology plays in enabling your business, and the experience you provide to your customers.

When new technologies emerge that you believe have the potential to be relevant, you immediately designate some engineers to learn that technology and to consider how it may be able to help solve problems for your customers in ways that are just now possible.

This goes far beyond using technology for operational efficiencies. You understand that technology allows you to reconsider what's possible and reimagine every aspect of your existing business.

You view your product managers, product designers, engineers, and data scientists as absolutely core to your business. You would no sooner consider outsourcing them than you would outsource your executives.

Coaching

You have developed and embraced a culture of coaching. Every single member of a product team has at least one manager that is committed to helping her reach her potential. You have built a reputation as a company where ordinary people who are competent and have good character can develop into a member of an extraordinary product team.

Staffing

Your hiring managers know that they are personally responsible for recruiting candidates, ensuring a strong interview and hiring process, and then onboarding these new people and ensuring they are successful. Strong staffing has become a core competency for your managers.

Product Vision

You have an inspiring and compelling product vision that unites the various product teams from across the organization in a common purpose that is meaningful to your customers. This vision will likely take you between 3 and 10 years to fully realize, but you are consistently making progress on this vision, quarter by quarter.

Team Topology

You have designed your team topology to optimize for empowerment and autonomy. The people on your product teams feel real ownership over a meaningful piece of the larger whole, and they understand how and when to work with their colleagues on other teams to collaborate on larger problems.

Product Strategy

You are executing on a product strategy that focuses on the most important goals and is powered by insights that come from your data and your ongoing interactions with customers. The result is that you know the most impactful problems that you need your teams to solve.

Team Objectives

These problems to solve are assigned to specific product teams with team objectives. Those teams then use product discovery techniques to figure out the tactics that can actually solve the problems, and product delivery builds that solution to bring it to market.

Relationship to Business

Today, the relationship between the product teams and your business leaders and stakeholders is one of mutual respect and true collaboration. The product teams work closely with the stakeholders to come up with solutions that customers love, yet work for the business. Both the teams and the stakeholders understand and embrace this.

Empowered Teams

Most important, the product teams are empowered to come up with the best solutions to the problems they've been asked to solve, and they are accountable to the results.

The engineers are constantly looking to apply new technology in new ways to better solve customer problems. The designers are continuously working to provide the necessary user experience. The product managers take responsibility for the value and the viability of the solutions.

The teams are inspired and proud to be working collaboratively with skilled colleagues on meaningful problems. They have a strong sense of ownership and define their success by their consistent contributions to customers and the company.

The state I'm describing here is still not easy-you will always have strong competitors that covet your customers--but now you are equipped to not just fight back, but to grow and thrive by continuously innovating on behalf of your customers.

Final Thoughts

My deep hope is that the many product leaders out there who were never fortunate enough to receive serious coaching will now have a resource to help them raise their game-and hence raise the level of their people.

Even beyond that, I am especially hopeful that the next generation of leaders will read this and understand what they need to do to be the leader their people and company deserve.

I am hopeful that you'll all go off and become exceptional product leaders.

I hope you will be able to work in a company that knows how to utilize your talents.

Finally, I hope you will use your talents and your energies for good

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