The Marty Cagan Hypothesis: Surviving Success in High-Growth Startups Requires Great Product Leadership

This week on the Product Science Podcast, we get the chance to sit down with Marty Cagan, founder of the Silicon Valley Product Group, to talk about the lessons he’s learned over his long career in product management. Marty works with a variety of companies, so he has an insider’s view into best practices. We talk through mentorship, the importance of product management, how companies can escape their roadmap addiction, and much more.

Questions We Explore in This Episode

  1. The Marty Cagan Hypothesis: Surviving Success in High-Growth Startups Requires Great Product LeadershipHow did Marty’s work experience as an engineer at HP push him into product management? How did early mentorship make a significant impact on Marty’s work?
  2. How can a product manager tell if they are on a great product team? What does good look like?
  3. What issues come with growth and what do you do about them? Can a company ever have too much money?
  4. What are the challenges for effectively managing product teams? How should a team put their leaders in place, and how do you make sure your org structure works for your product? How do you work with frameworks like Agile?
  5. What does proper training and development look like for product management? How can we improve the state of training and development in Silicon Valley? What are the differences in product and tech between Silicon Valley, New York, and London?
  6. Why does Marty say that roadmaps are product management’s opioid crisis? What alternatives do we have to the roadmap? When should you use OKRs, when should you use roadmaps, and why shouldn’t you use both? What does a successful implementation of OKRs look like across a company?  

Quotes From the Episode

“Like a lot of engineers, I was frustrated with the product people that I met.” – Marty Cagan

“Product Managers are usually high potential people, but so many of them have never once in their career seen good. They have never actually seen product done well. And their manager has never seen product done well. And so you get a lot of this blind leading the blind in our industry.” – Marty Cagan

“And the thing about good product management is that the results are usually pretty clear. If you’re working at a company with a proven track record of consistently doing product well, like Netflix and like Amazon, then that’s pretty easy to know.” – Marty Cagan

“Growing product organization technology sales is super hard. A lot of people argue that it’s even harder than getting to product market fit and I would agree in some cases it is even harder. There’s a phrase that I’ve heard for years which is called surviving success.” – Marty Cagan

“I can’t help but notice that teams do better with real constraints. When there’s too much money around, teams feel like they can solve things by just throwing money at them. If the underlying product isn’t healthy it just crushes that product.” – Marty Cagan

“In startups, it’s not that hard for everybody to be on the same page, but in growth stage that becomes very hard.” – Marty Cagan

“If I had to pick one area, it’s the people managers—especially the people managers of the product managers, designers, and engineers—that are often where things fall apart first.” – Marty Cagan

“It’s not that you need less management with Agile, it’s that you need better management.” – Marty Cagan

“For the organization to trust the product team, they really have to believe that the product team, and especially the product manager, is competent. And competent includes really understanding their constraints and considerations.” – Marty Cagan

“The single best path to a startup CEO today is through product management.” – Marty Cagan

Resources

Transcription

Holly Hester-Reilly: Hi and welcome to the Product Science podcast where we’re helping startup founders and product leaders build high growth products, teams and companies through real conversations with people who have tried it and aren’t afraid to share lessons learned from their failures along the way. I’m your host Holly Hester-Reilly, founder and CEO of H2R Product Science.

Holly Hester-Reilly: I’m super excited to have you on today Marty why don’t we start with a little bit of a background for anybody who doesn’t know where you came from or how you got here or what you’re doing today. Can you give us a short intro?

Marty Cagan: We’ll. Sure. The name is Marty Cagan again, and I founded about 15 years ago now, founded the Silicon Valley Product Group, which is just a small little, there’s just four of us, and we mostly invest and advise startups and growth stage companies. Before that, all four of us were senior execs, product execs at major product companies. I was the original head of product and design at eBay, and before that, I ran the platform and tools part of Netscape and before that an engineer really for a decade at HP Labs, and my partners kind of have similar backgrounds. So, we mainly just get to work with a lot of companies and share best practices when we see them.

Holly Hester-Reilly: Fantastic. Fifteen years in there’s so much that you’ve seen that a lot of our listeners will be interested to hear about, but if I could for a minute bring you back a little bit earlier. I think it’s always good to share stories about how people got to where they are today so others can think about their own paths. So can you tell me a little bit more, I think I remember hearing some stories about your time at HP and how you got into product, but I’d love to hear a little bit about that.

Marty Cagan: Well, sure. It’s an old story in the sense that lots of people got into product I think for the similar reason, but I mentioned that the first decade of my career was as an engineer, which I love don’t get me wrong. And HP at the time it was in their prime, and it was a fantastic place to learn how to be an engineer and learn the craft of software products, and I loved it. But I, like a lot of engineers, was frustrated with the product people I met. And after one particularly frustrating product, which back then products took like one to two years, and this was over an 18-month effort and after one particularly frustrating one where the product really didn’t … it was very impressive technically, but there really was no market for this product.

Marty Cagan: And it was the example that kind of forced me to consider this question of how do we actually decide what to build? Who decides what to build? And how do they do that? And I learned really at that point is when I kind of learned and made myself learn more about the product role and I realized that really that was even harder part of the problem, those are really the two parts of the problem, figuring out what to build and then building it well. And so I didn’t stop the engineering side for several years. I continued to do both, but I really became a student of the other side, and I still work a lot with engineers, so it’s not that I don’t do that, it’s just that I find that there’s a lot of I think really good thinkers about engineering and really good thinkers about design but not a lot of people focus on the product role. And so I have found myself spending more of my time on the product role over the years because of that.

Holly Hester-Reilly: Yeah, definitely. A story that a lot of people have been through some form of but, I find with the people I talked to you today, maybe not in the same context because they are just entered the industry in the last five years. I’m curious who were you learning from back then or how did you find and figure out what a good product person was like?

Marty Cagan: Well, that’s where I was really fortunate because HP back then, and it was a much this over 100,000 employee company back then. It was massive compared to what it is today. And they were famous for their mentoring and coaching and management, especially engineering management training. And there was a guy there who had spawned for successful product divisions, and they would generally spin off a product division that roughly 100 million dollars revenue. And this guy had done four of those.

Holly Hester-Reilly: Wow.

Marty Cagan: Nowadays he would have been known as a major serial entrepreneur. But he … I want my manager when I said I really want to learn this. It seems like we don’t do it very well. And this guy is awesome. And my manager actually arranged for this guy, his name was Mike Bako to coach me in product even though I was actually, he was in Colorado and I was in California. But he coached me and really mentored me over at least two years of time. And I’m forever grateful. That’s the kind of thing. And I honestly, I find that a lot of people they’re real learning happened because they had the chance to work under the direction of somebody who’d been there, done that. That was the advantage that I got from him.

Holly Hester-Reilly: Yeah, absolutely. I know you’ve mentioned in some of your writing before that one of the best ways to learn is to find someone who’s been there and get them to work with you. I think that’s very valuable like these days think back to the apprenticeship models that used to be the norm and seems like that’s really what works in product.

Marty Cagan: It is in fact, one of the things I really struggle within our industry is so many product people I meet are very high potential people. There are sort of a natural selection there. They’re usually high potential people, but so many of them have never once in their career seen good. They have never actually seen product done well. And their manager has never seen product well. And so they … you get a lot of this blind leading the blind in our industry.

Holly Hester-Reilly: You do. It’s something that for me was a surprise because I would say I was fortunate to have been in a growing organization where product was pretty strong and when I started to meet more companies and talk to more people outside, I was surprised by how many people only had stories to tell that didn’t look like that. And it now brings you to the question of how do you know if you have been a part of or if you haven’t seen good? I think a lot of people, it’s probably easier to know if you’ve seen good, you feel it, it’s there kind of the way that Marc Andreessen talks about product market fit. It’s like you know it when it’s happening. But how do you know if you don’t have a good product team? And how do you know that the team you’re working on isn’t quite there and you should find some more resources?

Marty Cagan: Yeah. Well, and it’s true because a lot of people I meet, they think they’re, that’s it. They think that’s the only way, everybody must have the same frustrations and struggles. So it’s one of those they don’t know what they don’t know often. It is one of those things, like you said, if you have seen good, I feel like you’re pretty clear on that. And the thing about good is the results are usually pretty clear. If you’re working at a company with a proven track record of consistently doing product well like Netflix and like Amazon then that’s pretty easy to know. Or if you’re manager, for example king for one of those companies, those are the kinds of things that are good clues for you. But, to the scenario where you just worked in some let’s say bank or something for years and you just think this is it. Then that’s hard.

Marty Cagan: If you do follow books and blogs, you probably have already started to have this sense that there may be other ways to do things even if you haven’t seen it. Hopefully, you believe there may be better ways, and then you start that journey that many people go on to find that, that might be changing companies, that might be finding a mentor, it might be going to some serious training, but one way or another. But it’s you really at the key. They have to know that it can and should be better.

Holly Hester-Reilly: Yeah. One thing that I think about is what do you see as the sort of situations that are the most likely false positives where somebody thinks that they have a good product culture, they are on a good product team, but actually, they’re mistaken. And to sort of help you color that, one thing that comes to mind for me is I’ve worked with some teams are, seeing some teams where they’re growing, and they’re raising money and maybe they think that things are going well, but actually when I look at what’s happening, they’re pouring the money into sales and marketing, but it’s not coming from true organic products love. What are some situations like that that you commonly see that you think people should be wary of and maybe give themselves a second reflection if they’re in?

Marty Cagan: Yeah. And I say I don’t see it so much that scenario. Normally, for example, the board of directors, if they’re pouring money in, and again, this may be a little bit of Silicon Valley bias. I do think the investors are savvier in general in Silicon Valley. There are some great ones now in New York and London and other places, but they’re not as common so that the investors are usually, look, look at the numbers here you are, yes, you’re throwing money into sales and marketing but we are not seeing the sales cycle go down, we’re not seeing our efficiencies kick in, we’re not seeing the actual churn rate go down. So they know enough to sort of point out that while you might be spending money that is not the same as really improving the business or the product.

Marty Cagan: So, there is a much better overall appreciation for the analytics that drive the company. And so, at least with the companies I’m with they seem to know that they’re not doing well, it’s not like they’re under an illusion. There are whole discussions that happen, because I’m one of those people that get nervous when there’s too much money around, it’s because the behaviors I see. But that’s really a different, right? That’s not the same topic. It’s-

Holly Hester-Reilly: Yeah. Well, um, I actually think what you just said seems pretty likely because the ones that I can think of where I’ve seen that they are in New York and there’s a lot of money in New York that’s from more traditional businesses trying to get into tech and they’re not as savvy yet as the Silicon Valley investors, so that might be a unique ecosystem thing. But tell me more about the ones where there’s too much money. What are the challenges and the struggles that come up then that make you pause when you see that?

Marty Cagan: Well, there’s sort of two fronts I see it. One is companies that try to grow too fast. Growth, growing. Growing product, organization, technology, sales. This is super hard. A lot of people argue that it’s even harder than getting to product market fit and I would agree in some cases it is even harder there’s a phrase that I’ve heard for years which is called surviving success. So I will tell you there are a lot of that. For the first 10 years really of my work advising companies it was really with startups and it was all about getting the product market fit. But over the last 5+ years I spent at least as much time on growth stage challenges. So there are a lot of issues that come with growing. It’s not that hard to get one or two or three teams working well, getting 10, 20, 30 product teams working well together? It was a lot harder.

Marty Cagan: So there is that dimension. If they try to grow too quickly, first of all, do they have the leaders in place? A lot of people don’t realize that there are a lot more demands on the leaders if you grow and a lot of them don’t have those leaders in place. So they just get this problem of the As hire As and Bs hire Cs kind of thing. That shows up a lot and if they have too much money and they grow too fast. And then the other one is, this gets more to psychology, which is really beyond my pay grade, but I can’t help but notice that teams do better with real constraints. And sometimes when there’s so much money around, they feel like they can solve this just by throwing money at it. You actually mentioned one of the classic ones where you have a product that’s not doing well, so you just spend like crazy in sales and marketing, which sort of creates a bump of course, but usually, if the underlying product is not healthy, it just crushes that product.

Holly Hester-Reilly: Yeah, absolutely. That’s actually an element that is a passion for me as well because my first time as a real product manager was working at a high growth startup at MediaMath. When I joined, they were 140 people, and I know we had a handful of product managers. It was the biggest product team I’ve ever worked on at a time because I’d only done startups before that, like less than ten people startups. But during my time there it grew to 850 people, and a dozen or more product managers and they started to struggle with a lot of those challenges that you mentioned. And I remember when I decided it was time to see what else was out there, asking some of those questions like how do the teams I’m looking at put their leaders in place and who’s the right leader for this team and what does that mean? And how do you work across teams?

Holly Hester-Reilly: So what do you do with the companies that you work with? Particularly as it comes to leaders. I’m curious because it can be really tough for business leaders to make decisions that are right for the business but don’t necessarily feel good emotionally. When a company is changing a lot, and the leadership needs something they don’t have, how do you approach that?

Marty Cagan: Well, that is where I spend a lot of my time with the leaders and I recently I started emphasizing the distinction too between the leaders and the managers because I have to spend time with both. And even though they’re often the same people, the responsibilities are very different for each of those. So, well like we were saying if it’s a startup, startups I don’t want to make it sound easy you know this firsthand, they’re not easy, but there are a lot more things that are straightforward like we know what we’re here to do. It’s not that hard for everybody to be on the same page, but in growth stage that becomes very hard actually to make sure that let’s say you have 15 product teams, on the order of about 30, 40, 50 engineers and that’s now a lot harder to keep them all going in the same direction.

Marty Cagan: And so I have to work with the leaders on really articulating the vision and the strategy. I also have to work because now, you need to coordinate. You’ve got maybe 15 product managers and 10 or so designers, and you’ve got all these engineers, and you need to make sure that they are all contributing to a much larger whole. And that requires very active management. And that’s actually, if I had to pick one area, it’s the people managers, especially the people managers, the product managers, designers and engineers that are often where things fall apart first. If those people aren’t strong, then you end up with a well as you know product teams are really only as good as their product manager. And so the person responsible for making sure you have capable product managers for each of the teams is that director of product management.

Marty Cagan: And so we have to make sure that that person is actually doing that. Hiring the right people, coaching them to competence and making sure the teams are doing what they need to do. That takes very active management. This is sort of always, nothing I just said is really new. I’d say that one of the things that changed though is agile, which is I’m a big advocate for, don’t get me wrong, but agile left the misconception in a lot of people’s minds that management needs to just back off and chill out. And that couldn’t really be more wrong. And I try to tell people it’s not that you need less management with agile, you need better management with agile. And so I do spend a lot of my time with the managers on that is helping them become a strong actual people manager.

Holly Hester-Reilly: Yeah, that makes a lot of sense, and it’s something that I sort of have always felt in the tech industry especially working with engineers, there’s kind of a cultural bias of we don’t need managers. Managers are just extra. So I’m curious if you encounter that and how you sort of help them see the value in what that is.

Marty Cagan: Well, first of all that is a common conception and they usually can convince themselves otherwise on their own. Not many people know this, but earlier Google’s life based that who the hell needs managers, we have some of the most capable engineers in the world well just. And they literally made a choice to get rid of people managers. So, they offered the people managers the opportunity to just be engineers again. And they did that and it was a nightmare and they had very visibly and well, they were still small then, but they had to unwind from all that and reintroduced management. They learned it themselves. And that’s what very strong talent. It’s not about that, it’s just that it’s not such a big deal again, when you’re really small, but as you grow it becomes a very significant issue.

Marty Cagan: I will mention Holly, just a fun example of this. There’s a movie that just came out that is called, what is it called? It’s The General Magic Story. I forget the actual title, but it tells the story of general magic, which if you’ve never heard of is like the most amazing tech company that nobody’s ever heard of. They had done this amazing product right before the Internet. And the Internet basically made the whole thing obsolete right away. But anyway, this feature film was done just recently to tell that story. And you can see that they had a couple of the best engineers in the world right out of early engineers from Apple, that we’re the co-founders. And they had that belief that we really don’t need managers and you could just see in the movie how that plays out.

Holly Hester-Reilly: Oh, that sounds fantastic. I’ll definitely have to look that up. I had not heard the story of General Magic, but I always love a good story about a company growing and products being built. So that sounds great. Yeah. I’ve definitely throughout my relatively shorter career already seen plenty of companies and teams attempt to get rid of management and then feel the pains. And sometimes I work with people who are just rising into management, and they themselves aren’t sure about the value of what they’re doing now and help them see that you have to start measuring your success differently. It’s not about how many documents you put out or lines of codes you commit. It’s about whether everyone on your team is working well and they understand the goals and the vision and all of that communication is real work.

Marty Cagan: One of the things I do use as to point out to people is that for especially the first ten years of my career and in fairness HP prided itself on this, every single day of those ten years, I had a people manager that was … sorry.

Holly Hester-Reilly: Hi doggy.

Marty Cagan: There’re a few dogs. I had a manager every single day over those ten years that was worried about helping me become competent at my job and then get ready for the next level job. So there was always someone there to coach me, and I thought that was just normal. I thought everybody had that and largely they did at least in the organizations I was in. But then when I left HP and went out into the broader world, I realized how often that is not true. And I argue to teams that that is exactly what the … this is what the managers need to do, is they need to make sure that everybody on their team has somebody helping them become competent.

Holly Hester-Reilly: Since you had that experience back then and you work with a lot of companies now, I’m curious, what do you see in the and especially out in the Silicon Valley world in terms of how much companies are investing in that coaching, that teaching, that development of their people’s careers to the next level. Do you think it’s where it needs to be? Is it, are there pockets of good or is it, what does it look like?

Marty Cagan: Well, overall I’d say it looks terrible. And that’s what’s showing. I do think like I said, part of that is unintentional. Part of it is agile, created this misunderstanding. And part of it is just rapid growth and it’s companies can and do grow faster than they ever did if you get on that curve, it can be a wild ride. But I spend a lot of time trying to encourage them to focus on that, that that is the key to successful growth. There are pockets of good for example, I have seen terrific people managers and coaching going on at teams at Google or teams at Netflix. So there’s definitely good out there but most, I think this is an area that is definitely a problem.

Holly Hester-Reilly: Yeah. It’s absolutely a problem here and the New York ecosystem, and I hope that it’s at least more evolved out in Silicon Valley, but as the tech ecosystem here is growing I’m amazed at how many people I bump into and talk to who are in the industry and are talking about product management things in the coffee shop like that didn’t use to be a norm in New York. But I’ve also noticed that I don’t know if it’s just my particular anecdotes or if it’s real, but I feel like the general quality level of like how much people are adding, what they know about it is it feels lower, and I think it’s just because there’s so many and where could they have come from? They have to have come from being new to join the field. But we really have to help everybody learn how to do this well.

Marty Cagan: This is a real problem. Well, first of all, I would emphasize it’s a problem in Silicon Valley, so I don’t want to make it sound, but in Silicon Valley, I think we have a longer history of good companies that are feeding the market. In places like New York and London, it is getting a lot better. I want to be careful with what I’m about to say, but a lot of the actual talent came from the financial services industry. And thankfully when they had such a disaster a decade ago, it freed up a lot of talent. The problem is, the financial services industry is demonstrably not good at what we’re talking about. And so those people were sort of bed in and hired by all these companies, and many of them had never … again, no coaching, never seen good, they thought the way things work is the way it works at a big bank.

Marty Cagan: And so it hindered in those areas. Now I feel like we turned the corner in both New York and London several years ago and now there’s a lot of, in fact, several of the teams that I meet indistinguishable from the best teams anywhere in the world. So I’m not trying to paint it as a desert or anything like that, it’s just that, that took a little while to get over because so many people were coming from really the opposite of what we would consider good.

Holly Hester-Reilly: Yeah. As a die-hard New York tech person, I feel like no upset about you saying that because I think it’s true. And I think that we’re growing as a community and we’re getting stronger, and we’re helping people see what good is, and we’ll get there, but it’s a different dynamic because a lot of the people in the industry here were in finance first because that was where the money was and where you went if you had a lot of ability to earn. But I’m excited to be a part of this community now because it has a lot of diversity in thought and in connection to different industries, and you can still meet a lot of people in your day to day life that are doing other things and I think that’s a good breeding ground for innovation and different thought and things like that. So-

Marty Cagan: I do too. And I’m in New York and London several times a year because of that. It’s really turned into a great place.

Holly Hester-Reilly: Yeah. So let’s talk a little bit more about some of the sort of product management, product leadership specifics. I think I remember hearing you once say that roadmaps are product management’s opioid crisis. Tell me a little more about that.

Marty Cagan: Well, yeah roadmaps, first of all, I should be clear because there are some exceptions to this fortunately just that rare, unfortunately, but most roadmaps that I’m talking about are the classic prioritized list of features and projects. And of course the reason companies are so addicted to these is simple, they want to know that the teams are working on the most important things and they also want to know when things are going to happen. And so those are pretty basic needs. And I also think those are fair needs. But the reason it’s such a problem is that in virtually every company when you have a document with the string roadmap on it, then everybody thinks those features and projects are commitments. And the problem with that is that, no matter how smart you are, Harvard Business Review did a story recently where they highlighted a couple of organizations including a strong team at Microsoft where they admitted that the truth is only about 10 percent of the things on our roadmap actually pan out.

Marty Cagan: And that’s the reality is that most of the things that we think are going to be awesome or not awesome. And if you put it on a roadmap though, you’re kind of locked and loaded and committed to doing that. Even though we often configure out in just days that that’s going to be a big waste of time. And so we want to focus not on the features and projects, we want to focus on the problems to solve and then let the teams figure out and be held accountable for solving those problems. And so roadmaps kind of get in the way of that. And fortunately there are good alternatives to the roadmap, but still, companies are addicted to them. And I struggle with that with a lot of different companies.

Holly Hester-Reilly: Yeah, I see that too. And it’s something that I tried to spearhead some initiatives on when I was in house at some companies to try to help the company move to a better way of doing it. And I was somewhat surprised by how challenging it was. I literally went to people with like your articles on an alternative to roadmaps and OKRs and what is the inconvenient truth about product. And I was like, these are truths we know that we don’t know what we’re doing, we know it we don’t know how long it’s going to take to build something. And I had a manager to say to me well, I believe in our tech team, I believe that they can tell us what they’re going to get done. And it sounds like you don’t trust them. And I was like that’s not the story.

Marty Cagan: I started talking about this more explicitly recently because what it really gets down to. And by the way, you’re going to see that financial services legacy thing come into play again. In a bank, the purpose of the tech teams, the whole reason they’re there are really to serve the business and that’s their job. That’s why they’re hired. That’s also they often just outsource the thing, but they’re there to serve the business. And the different parts of the business like consumer banking or whatever, they decide what’s going to be done. And in that model, roadmaps are not only common, but they really are an enabler of the way they want to work. And I also tell people, you can have somebody called the product manager, but don’t fool yourself. That’s not a product manager in that model.

Marty Cagan: But in a true tech company, I’m talking about the Amazons, the Apples, the Googles, the Netflix. In those companies, the role of the tech teams is different. It’s actually to solve our customers’ problems, not the needs of the business, but in ways that the customers love and that worked for the business. And that’s a very different charter. That’s a very different purpose. And that’s where we need product managers. In truth, that’s where we need product managers. If it’s that we’re there to serve the business, frankly, all you really need is a product owner. You just need somebody to convert the roadmap into a backlog and get to work.

Marty Cagan: And so that’s a little harsh, but it’s really true. And so that’s where this comes from. It really does. Now, one of the reasons I like OKRs when they’re used well, they are really designed to be the alternative to this. It’s meant to be an empowering tool. A tool for empowerment. Instead of giving a team a bunch of features to build, you’d give them problems to solve. Those are the objectives, and the team is supposed to be in the best position to figure out the best way to solve that.

Holly Hester-Reilly: So tell me more about a good implementation of OKRs because I think I’ve talked with some other products leaders and people who are seeing different implementations of it and it feels at least in my ecosystem like it’s early days and a lot of people are not doing it according to principles. They’re doing it according to some following, some structured role that they think is going to make it work. So what do you see? Tell me a story about a place where it was great and maybe what look like.

Marty Cagan: Yeah. The truth is in most organizations that do OKRs that I see it’s a mess, just a complete mess. And I think I understand why that’s the case. OKRs in concept, of course, are simple. Right? They’re not complicated. We have qualitative objectives, and we have quantitative key results. And the idea is to give teams problems to solve and let them be accountable to the actual results. The reason it’s so hard and so ugly in so many organizations is that it forces this topic I just brought up about what the purpose of the team is, it brings it right to the front.

Marty Cagan: It shows the cultural issue that’s going on. So what most companies do is they think they’ve heard they need OKRS because Google and Facebook and LinkedIn have been using them for a decade. They think they need them, but then they try to impose them in their company who uses roadmaps and still is driven by the business.

Marty Cagan: And so what you get is a complete sort of disconnect that shows up with frustration across the board. It really doesn’t make sense to do both of those, but that is what so many companies try to do. They try to do some mashup of some principles from OKRs but still addicted to that old way of working. So OKRs is straightforward to do if you’ve already made that cultural change to what I’m talking about here, truly empowered teams, but if you haven’t made that, it’s just a layer on top of everything else which is going to struggle. So I think that’s what you’re really seeing.

Marty Cagan: But in a good organization, we have objectives they usually for a small to a medium sized company, they usually come from the board of directors, an annual, the other, the CEO has an annual set of business objectives around growing the business or introducing more product lines or whatever it might be. And then the leaders and managers of the product design and engineering translate those company objectives into objectives for each product team. And then the product team, so let’s say you’re an early Uber and you are a driver product team. You’re responsible for the apps for the drivers, and the managers give you the objectives around what you need to do to help the drivers this year. Maybe you need more drivers, maybe need happier drivers, whatever.

Marty Cagan: And then the driver team goes to work and says, well, how can we actually, what can we do this quarter to help that? And they look into that as you know I call that discovery. They look into that and they say, well, we can do this, we can get a 20 percent boost this quarter. And so they commit to their key results, is 20 percent improvement on this KPI and they get to work. They probably have lots of ideas and almost certainly they do, but almost certainly most of those ideas won’t work with. Well that’s fine. They try them quickly and they figure out the ones that will work. And the good teams actually, yeah, they solved those objectives and declare a victory on that in the quarter and a new set of problems next quarter.

Holly Hester-Reilly: One of the things in there that I love about that is that because they didn’t write up that roadmap, when they try those things and most of them fail, they don’t have that overhead of going back to somebody and saying, hey, by the way, here’s the learnings I had where these things failed, and we have to do something else-

Marty Cagan: Yeah. But over head makes it sound too minor. It really is. Because at this point, imagine if they did have that roadmap and they’ve got marketing programs that have been baked in and sales programs that are baked in, and they’ve all already been talking to customers about this solution. At this point it is really hard to change that. And many of them. Well then there they have a terrible situation, do they go forward anyway even though they don’t think it’s going to work and they have strong evidence it’s not going to work or do they try to ask for a mulligan and say, we messed up on this, we need to change all this, and nobody’s happy in this scenario.

Holly Hester-Reilly: Yeah. So how do you recommend that product managers work with their counterparts in marketing and sales when they’re in this OKR system and the marketing and sales are coming and saying, well how am I going to prepare for a launch if I don’t have a roadmap?

Marty Cagan: Well, so we do need … first of all, this is why need competent product managers, because of all this kind of falls apart without that. So we need a product manager that deeply understands the go to market strategy, understands the capabilities of the sales organization, the different marketing programs that we have as well as finance and security and privacy and biz dev. All these different stakeholders. So if they don’t understand this, then those parts of the business, there is nobody they can trust there. And so they will revert to trying to take control again. So everything I’m about to say is really predicated on having a competent product manager.

Marty Cagan: But the product manager in discovery is figuring out if they’ve got a solution that works for those parts of the business, which usually involves them showing the head of marketing prototypes and saying, okay, we think this will work, will this work with your marketing programs? Let’s make sure this is a solution that works for both of us. And once we get to a solution that works well for our customers and works well for our business and is something we can build ourselves technically feasible, then we’ll commit. Then we have no problem making a commitment and saying, okay, here’s the feature.

Holly Hester-Reilly: Yeah, absolutely. I think I personally have had one major project in my career where we had that level of partnership with marketing, and it’s been my sort of gold standard ever since it’s like if we do this all together, we can make something really amazing happen. But there’s a lot of work involved in working across all the teams.

Marty Cagan: That’s totally true. To have the organization trust the product team, they really have to believe that the product team, especially the product manager, is competent. And competent includes really understanding their constraints and considerations. So that’s why I think we even started this discussion you really need to make sure that the product teams are only as good as the product managers. You have to make sure your product managers have done their homework and are competent.

Holly Hester-Reilly: Yeah. So we need more good product managers to fuel the modern economy.

Marty Cagan: I would argue we absolutely do. And the people we hold accountable for that are the managers of product managers.

Holly Hester-Reilly: And I was recently reviewing what you had said about that in your most recent book in Inspire To Be Two. And I’m curious to hear what are some things about what makes a great leader of product management that really crystallized in the past couple of years that you had to put into the new book that you didn’t have when you wrote the first one. What’re the most recent developments about what is great for a leader of product management?

Marty Cagan: Well I think what happened, again, this was just my theory to explain what I think are the facts they’re aware of. It seems clear to me that over say that there were ten years between V1 and V2 and over those ten years the main thing that happened was agile became a lot more popular, which is something I advocated for in the first edition. But that happened, but one of the unintended consequences again is my theory is that there was a deemphasis on people management. And that really created a major problem. And so I tried to dial that way up in V2 and talk a lot more about this.

Marty Cagan: One of the best product minds I think in the world is Ben Horowitz. And he likes to argue that the single most important non C-level position in a company, is actually these directors of product management. And his argument is it’s because the people that are going to build their products, which is what the whole company is based on, are these product teams and they are only as good as the product managers. So the directors of product are who we have to hold accountable for strong product managers. That’s this just same argument.

Holly Hester-Reilly: Do you see that the treatment of that talent matches that importance? Are they getting the same compensation and respect and things like that? Out in the Silicon Valley ecosystem as to match that influence that they have?

Marty Cagan: Well I would argue … So the product managers that are good and that deliver they are kind of the rock stars of the industry and those people are getting … and it’s a, this is not really much of a secret, but the single best path to a startup CEO today is through product management. It is that proving ground for future leaders. So I would argue absolutely the prize is big. If the product manager is strong, it’s one of the best careers in our industry, and certainly, it’s a very rewarding career. But it’s also because it’s a proving ground.

Marty Cagan: There are a lot of former product managers out there. People that were really not up to this. Now in it, this is going to go back to that theme where if the company is set up where the teams are really just there to serve the business, then these people, first of all, even if they’re hired, they usually leave because this is not the real product role that we’re talking about. But if they’re at a company that has truly empowered product teams, then yes, this person is a … it’s a very visible position, but it’s also a highly rewarded position.

Holly Hester-Reilly: Yeah. All the pros and cons that come with that. Right?

Marty Cagan: Exactly.

Holly Hester-Reilly: I’ve been amazed myself as I’ve progressed how many people I’ve known who’ve decided to go another way and I always thought, wow, it’s like the most amazing role. Why wouldn’t you want just to do that? But sometimes people find it’s not for them.

Marty Cagan: Oh no, and I try to be honest. I think it is absolutely the hardest role on a team. And it’s not that I’m not saying, in fact, you don’t have a successful product unless all the roles deliver what you need them to deliver. It’s just that this role is one of those brutal roles. It takes more hours I think than any other role, and it’s just very unforgiving that way.

Holly Hester-Reilly: Yeah, definitely. So, this has been a really fantastic conversation. I would love to just like keep talking forever, but probably should wrap it up. So what do you think are maybe some final thoughts? I think the question I was thinking about is if you had a magic wand, what would you make be true about the product management community? What do you think would be the biggest thing that you would want to be somewhere that it’s not today?

Marty Cagan: Well, I think that the community has to understand that training to be a product owner does not mean that they’re a product manager. That product owner is just a very small, simple, it’s the simple part, the straightforward. It’s honestly; it’s more the administrative part of being a product manager. They have to understand that getting CSPO certification is not a product manager. I want to be clear; I think product managers is long as your team is using something like Scrum, then the product manager does need to learn what they need to do as product owner. But product owner is just the role they play on an agile team. Product manager is the job they’re signed up for.

Marty Cagan: And so the first most important thing I think they need to understand is, it is on the product manager to make sure that they are competent to do the job. Hopefully, their manager can help them with that. That’s what their manager’s supposed to do. But if they can’t, they have to find that help somewhere else.

Holly Hester-Reilly: Awesome. Well, thank you, Marty, so much for your time today and for sharing your wisdom. I know our audience will find it valuable.

Marty Cagan: I hope so. I hope it was useful. Thanks very much, Holly.

Holly Hester-Reilly: I hope you enjoyed that conversation with Marty Cagan as much as I did. If you’d like to find Marty online, you can follow him on Twitter @Cagan C-A-G-A-N or visit his company’s website, svpg.com for the Silicon Valley Product Group. Are you enjoying this episode? Don’t forget to subscribe so you don’t miss next week’s episode. I also encourage you to visit us at productsciencepodcast.com. To sign up for more information and resources from me and our guests. If you love the show a rating or a review would be greatly appreciated. Thank you.