Shiny new objects rust over time

Many of us have worked in companies that prioritize work on an annual basis. In these organizations, it’s common to invest in a few things each year at the expense of everything else. “This is the year of search,” you might say, because “last year was the year of mobile.” On the surface, this makes total sense – you can’t make big investments in the same capabilities each year. Eventually, everything will have its day in the sun.

In reality, this is a terrible way of prioritizing work, completely ineffective, because it means that – until each program has its day in the sun – it’s essentially left to wither and die. Or to almost die, which is even worse. Don’t you see it? Look there in the corner – there’s site search, begging to be put out of its misery. It had its last big investment two years ago. It knows it’ll be the golden child again next year, but in the meantime, customers are mocking its uselessness, laughing at its broken experience. Poor thing. 

A few years ago, my company addressed this by implementing an Agile, product-focused approach. Within our organization, each product area receives some amount of ongoing funding, which allows the team to make consistent progress throughout the year. The amount of funding may change according to business needs, but the idea of making consistent progress across the business doesn’t.

Take the Search product for example. Several years ago, Search had its day in the sun. Replacing our old system was one of the company’s top priorities, and the project got all the people and money it needed to be successful. Once our new Search was implemented, the big project was over, but the need to make continual progress – to optimize the experience – was still there. (It will always be there.) So although the Search team got smaller and some resources were moved to new strategic priorities, the capability continued to exist – we continued to make it better.

Search is, of course, just one example of a large company initiative – a shiny object – that needs ongoing care and feeding. (I can’t think of a product that doesn’t.) Organizations built on a product management model get this. Before they build new functionality, they’re thinking about how to support it and what the long-term roadmap looks like. Organizations that are entirely project focused, on the other hand, are likely to face poor support and unexpected costs. That’s because they haven’t planned for the inevitable, and because rust never sleeps.

Related: How much of a problem can you buy away?

How much of a problem can you buy away?

My eCommerce team is world class – the best group I’ve worked with, capable of leaping tall buildings in a single bound. From top-to-bottom, we’re defining compelling visions, creating aggressive roadmaps, delivering innovation and quality, testing into winners, and measuring results. Even still, we can’t be experts at everything, and resources are limited.

This means there are times when we need to explore the vast vendor landscape to find tools that can help us solve our problems. We tend to focus in three areas:

  • Things that have been commoditized, because we don’t think they’ll help us differentiate.
  • Things that are really, really hard, because we don’t have the desire (or time) to build or maintain world-class-systems that we can easily buy.
  • Things that are outside of our core competencies, because sometimes the best way to get started with a new technology is to have someone else build it and then take it over.

In each of these areas, there’s a sense we’re buying a problem away, that by leveraging a vendor for ratings and reviews, or personalization, or search, or recommendations, or whatever, we can free our resources to focus on other things. And this is mostly true. But it’s never completely true.

It’s never completely true because there’s no problem that can be bought away completely. Even if we’ve “completely” outsourced a program (like ratings and reviews, for example), we need to define our strategy, manage our vendor, provide customer support and issue escalation, measure the program’s effectiveness, tweak the experience, and defend our budget. Despite our vendor’s promises, these things cannot be outsourced. Not effectively, anyway.

And who would want to hand all of these things over anyway? Vision? Analytics? Roadmap? I may want to leverage a vendor at times, but I never want to hand them my company’s strategy and ask them to drive it.

What does this mean? It means that when we consider buying a problem away, we need to understand that we can very rarely buy away the whole thing. We need to allocate both resources and dollars for the activities listed above, for ongoing support, and for the cost of potentially moving a capability in-house over time. We need to understand that there’s no such things as “hands-off” management or programs that run themselves.

Related: Shiny new objects rust over time

Gilt Group sale shows it’s hard to turn disruption into profit

gilt

Having raised $286 million in funding, Gilt‘s sale to Hudson’s Bay last week for $250 million is hard to see as anything but a failure of Gilt to turn its flash sale model into a major stand alone business. According to CNN Money:

Gilt Groupe is one of the originators of the flash sale model. […] Its user base has soared over the years. […] Hudson’s Bay said the deal is a play to continue growing its discount business and that Gilt will integrate with its Saks OFF 5TH locations.

Several years ago, we saw something similar happen to Groupon, which thought is was going to revolutionize retail, and ended up doing much, much less. Here’s another quote from the CNN article:

“We plan to continue to foster Gilt’s culture of innovation, which has helped create a strong brand with a loyal and devoted millennial following,” said Jerry Storch, CEO of Hudson’s Bay, in a statement.

I think we’re seeing a couple of things:

We’re seeing the need for retail-oriented businesses to make money, and lots of it. It’s getting harder and harder for even the coolest startups to claim they’ve changed the world until they prove they can sell a lot of stuff. This is a good thing. The vendor landscape is littered with “disrupting technologies” that added little value. Turns out it’s much easier to be disruptive than to be meaningful.

We’re also seeing how hard it is for big retailers (like Saks Fifth Avenue) to innovate internally, how their cultures don’t really support change, and how – in many cases – they still haven’t wrapped their heads around what it means to be a relevant company in the Amazon.com era.

Rare is the company that creates something truly game-changing, lasting, meaningful to customers, and hugely profitable. So maybe Gilt did exactly what it was meant to do – create an experience that could terrifically augment an established brand and make it relevant to a whole new group of customers. Maybe Gilt’s greatest value is in extending its culture of innovation to Hudson’s Bay, ushering in a new era for the combined company.

Maybe that’s enough.

Think like a boss

James GandolfiniMy team does Product development for 16 websites on 2 different platforms. We create roadmaps and prioritize work across more than 6 teams. We generate lots of new projects, and we have a process for vetting new ideas that come from all across the company. We work cross-functionally, with multiple technology and business teams. And we own our products from soup to nuts, development to support, build to run.

Each month, we prioritize new requests with the guidance of our senior executives, which means we tell them what our priorities are and they tell us if they disagree. Since we know the customers, the work required, the risk involved, the business value, and the product roadmaps better than anyone, we know what work needs to happen. Do our Execs weigh in? Absolutely. Do they have different opinions than ours? Occasionally. Do they change our priorities? Rarely.

Having strong, well-reasoned opinions about what work should be prioritized, delivering on our commitments, and showing real business value has helped our team gain the trust and confidence of our Executive leadership. They expect us to be the experts, and we respond by acting like it.

You probably know a lot more than your boss

In 95% of the work situations you will ever find yourself in, your boss doesn’t know any more than you do. In 75% of those situations, you know more than your boss does. In 50% of those situations, you know much, much more. I’m making up the numbers, but you get the idea.

And yet, many employees feel completely unable to make a decision without their boss’s input. Why?

We don’t want to make mistakes

For lots of people, it’s natural to avoid making decisions, just as it’s natural to avoid taking responsibility. Making decisions is scary, because it means being wrong a lot. I worked at a small company where the CEO ruled by fear, where being wrong was something to avoid at all costs. I didn’t last there very long.

At a company where employees are punished for being wrong, the best employees will leave or be fired (as I was). Those who stay are those who are good at playing the game – avoiding responsibility, asking their boss to make decisions for them. Are those the people you want to work with?

We’ve forgotten how to make decisions

Have you ever heard the comment “those decisions are made above my pay grade”? Those are the words of someone who lacks ideas, conviction, or confidence.

There can be good reasons for this kind of thinking. Command-and-control-based companies train employees that different decisions are made at different levels, and that there’s no upside to disagreeing with your boss. If your company’s beating you down, it might be time to find another one.

My old boss used to say “an opinion’s worth 50 IQ points.” At least.

We want help

Maybe the issue is simply a desire to get help, or to have a sounding board. This is totally valid – and very healthy. Help is important, and we could all use a little bit once in a while. I know I can.

We need more information

Sometimes we need more information to make a solid decision – there are times when my boss has a critical piece of information, and I’d be foolish not to ask for it. It comes down to this:

  • If you’re not making a decision because you need more information or want some help, that’s a good thing.
  • If you’re not making a decision because you lack the confidence or conviction to get it done, that’s less good.

The trick is to know the difference.

Creating the culture we want

As leaders, we need to figure out what we value in our employees and co-workers, and then create a culture that supports our values. If we value confidence, creativity, leadership, and risk-taking, we need to:

  • Empower our people to make decisions
  • Encourage risk taking
  • Seek out contrasting points of view
  • Promote healthy debate
  • Outlaw terms like “this decision is made above my pay grade”
  • Ask questions

Most importantly, we need to expect people to make mistakes, and we need to let them know it’s okay – in our actions and in our words. Then we need to remind them, over and over again. We need to believe that making mistakes is a critical part of becoming a better team and company. And we need to be willing to make some of our own.

Deliver business value, not projects

About 2 years ago, my eCommerce team was working on a project that would allow Web Merchandising to more easily add content to our sites’ Product Detail Pages (PDPs). After working on the project for three months, we decided it was complete. We delivered the good news to our Executive team in our monthly update and waited for the accolades to come. “Fantastic,” our CEO said, “let’s take a look.” But when the Execs took a look at the PDP, they saw empty spaces where content should have been.

“No, no, no,” we said, “the functionality is complete. It’s just that you won’t see the project’s benefits until the Web Merchandising team adds the content. Probably in about two months.”

Guess how “done” the Execs thought we were. Not very.

It ain’t done ’til it’s making money

The idea that our work is incomplete until its business value is realized doesn’t thrill my team, and it doesn’t particularly thrill me either. It means when we work on a projects with dependencies (pretty much all of them), we can’t really move on without another team’s help. It means instead of thinking of new ways to drive value for the business, we’re finding creative ways to influence schedules we don’t own.

But what’s the alternative? Meetings like the ones described above? Lots of completed projects and no business value realized? A false sense of accomplishment shared by developers and product owners who hit their goals while the company suffered?

Service providers and agencies – the good, successful ones – get this. That’s why, before it gets close to contract renewal time, they’re showing me usage reports and asking if I need help getting more value out of their products. They’re offering consulting services (sometimes even free!), holding quarterly business reviews, and showing me all kinds of cool charts and graphs. They know that creating a terrific platform for generating user reviews or product recommendations is only half the battle. In order to justify renewing the contract, I need to see more reviews or a higher conversion rate – I need to see business value.

In a corporate setting, with so many levels, layers, and inter-dependencies, this message can be harder to land.

Setting the right goals

One way I’ve found to land the message is to give employees goals related to the amount of business value they drive. Within my team, everyone is accountable for at least one – and usually several – business-focused goals related to their work. For example:

  • The PDP conversion rate must improve by 10 bps, or
  • We’ll generate 10% more product reviews for our owned brands

This helps ensure that employees take ownership of the results they drive, and that work continues long after a project goes live. (In fairness, I also include a goal related to each employee’s individual and/or team output, so they’re not completely out of luck if another team falls down on the job. I call these quality and quantity goals – the quality of work is expressed in terms of business value, while the quantity is expressed in terms of sheer volume.)

This is simple, but effective. In cases where employees are focused only on project delivery, I’ve found that – more often than not – their goals are not tied to business outcomes.

I’d love to hear from you

I’ve described what I’ve found to be true time and time again: that employees need to be held accountable for business outcomes, and that business-focused goals are a great way to make it happen.

Now I’d love to know what you think. Do you agree that sharing accountability for business outcomes is critical? How have you solved the problem? Please let me know.