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Mind the Product

Sunday Rewind: The good, bad, and ugly of OKRs by Jenny Herald

Product Management

Tobias Freudenreich

<p>In his keynote at #mtpengage Hamburg 2022, Martin Eriksson – Product Partner at EQT Ventures, Co-Founder of Mind the Product, and Co-Author of the best-selling book <span style="text-decoration: underline;"><a href="https://productleadershipbook.com/" target="_blank" rel="noopener">Product Leadership</a></span>, or in short “the big friendly giant of product management” – illustrates how to overcome decision overload. Starting with his popular mental model, the &#8220;<span style="text-decoration: underline;"><a href="https://martineriksson.com/the-decision-stack" target="_blank" rel="noopener">decision stack</a></span>”, Martin emphasizes the importance of product principles and explains how they can help simplify and accelerate decision-making in any organization. If you are interested in faster and better decision-making, this talk is for you.</p>
<p>Martin starts his keynote by reminding us of the stress that’s caused by every single decision we have to make. As Barry Schwartz, a psychologist and author of ‘The Paradox of choice’ put it:</p>
<p><span style="font-style: italic;">“Each new option adds to the list of trade-offs, and trade-offs have psychological consequences. </span><span style="font-style: italic;">A greater variety of choices actually makes us feel worse.”</span></p>
<p>Too many choices are no better than none at all, so the key is to find the happy medium: A moderate number of choices that provide just the right amount of freedom and allow us to decide quickly and confidently. It&#8217;s important to keep this in mind when designing our products, Martin reminds us: We shouldn&#8217;t overwhelm our users with too many choices. But it&#8217;s equally important to keep this in mind when designing our organizations: we need to limit the options in a way that simplifies decision-making. That’s where the decision stack unfolds its potential. It&#8217;s a powerful model for giving product teams the guidance they need to make independent but aligned decisions.</p>
<h1>The decision stack</h1>
<p>The building blocks of the decision stack from top to bottom are vision, strategy, goals, opportunities, and product principles. As you move through the stack from top to bottom, you can ask yourself, “how?”, to connect each of the building blocks: How will we achieve our vision? By implementing our strategy. How will we implement our strategy? By chasing those objectives. As you go through this from the bottom up, you can ask yourself, &#8220;why?&#8221; So if the team is wondering why they were given a particular goal, they should find that answer in the strategy. And if you&#8217;re wondering why you have this strategy, you should find the answer in your vision.</p>
<p>Most importantly, a clearly defined decision stack tells you what you can say no to. You will follow that vision and nothing to the left or right of it. Your strategy tells you what actions to take, but maybe even more importantly, it tells you what actions not to take. And so on. In this way, it limits the overwhelming amount of options to a manageable level, and so it works its full magic for your decision-making.</p>
<p style="text-align: center;">Watch Martin&#8217;s other talk at ProductTank: <a href="http://mindtheproduct.com/building-awesome-product-teams-by-martin-eriksson/" target="_blank" rel="noopener">Building Awesome Product Teams. </a></p>
<h1>Understanding product principles</h1>
<p>In Martin&#8217;s experience, most organizations especially lack a clear strategy and product principles. Since there are countless frameworks, models and books for strategy, Martin decided to focus on the topic of product principles for this keynote.</p>
<p>The product principles are the foundation of the decision stack. When developing solutions to take advantage of opportunities, teams should look to the principles to figure out &#8220;how&#8221; to build them. However, when asking why we have these principles, the answer should be found in the vision – since the principles should be similarly long-lasting and as universal as our vision.</p>
<p>Martin shares a personal story to better understand the power of product principles: When he was working for the job board Monster.com in 1999, they often-times had discussions around whom to optimize the experience for: Job seekers or recruiters? Both are really important to successfully run a job seeker platform, but sometimes their goals are in conflict. These conflicts led to endless discussions that were not decidable until Jeff Tayler, the CEO and Co-Founder of Monster.com made a clear statement:</p>
<p><span style="font-style: italic;">“Job seekers always come first – build an amazing experience for them and the recruiters will follow.”</span></p>
<p>Whenever the team had to make a trade-off decision between the needs of the recruiters and the conflicting needs of the job seekers, they now knew which way to go. That&#8217;s why this statement is a great product principle: it shortens discussions and helps make decisions quickly.</p>
<h1>Principles in distinction to values</h1>
<p>With values, Martin continues to explain, it’s tricky: They are in general more fluffy and so they don’t help you make decisions. Martin shares some exemplary values to illustrate this point:</p>
<ul>
<li>Build a <a href="https://www.mindtheproduct.com/why-you-should-organize-product-teams-around-customer-experiences/" target="_blank" rel="noopener">delightful user experience</a></li>
<li>Make something people want</li>
<li>Excellence</li>
</ul>
<p>While it is good to have these values, they do not help product teams in day-to-day decision-making and we should not confuse them with product principles. Strong principles are specific trade-off decisions, and using the style of even-over statements &#8211; as known from the agile manifesto &#8211; helps to formulate them:</p>
<ul>
<li>Conversion even over revenue</li>
<li>Job seeker even over recruiter</li>
<li>Mobile experience even over desktop</li>
</ul>
<p>It&#8217;s important to note, Martin stresses, that the product principles you establish must align with the rest of the decision stack. Otherwise, the entire stack collapses and doesn&#8217;t help you make better decisions faster.</p>
<p>Throughout the keynote, Martin gives countless real-world examples of product principles used by companies like Google, Pinterest, Coop, and many others. They have in common that they describe how these companies want to build their products and what tradeoffs they are willing to make. They are specific to each company, its strategy and vision. What they have in common with values is that they are memorable and simple, but what makes them different from values is that they are actionable. That&#8217;s what makes them good product principles. That’s what makes them helpful in decision-making.</p>
<h1>How to set strong product principles</h1>
<p>At the end of this inspiring keynote, Martin gives some advice on how to start creating product principles. Basically, there are two approaches you can take: Bottom-up vs. Top-down. In the bottom-up approach, you can listen carefully during your retrospectives to identify things you said no to. For anything you said no to, ask yourself if that is a principle you are following there.</p>
<p>In the top-down approach, reinforce your strategy by framing acceptable trade-offs as principles. Think about it carefully: What will make your strategy truly successful? What won&#8217;t? Again, what you can say no to can be a good principle.</p>
<p>Martin points out that product principles are the responsibility of all product people, whether you are the chief product officer or a junior product manager in the company. If there are no compelling principles, the junior product manager should start by asking questions: How does what we are currently doing contribute to our vision? How will this lead us to success? Questions like these help provide the necessary context and hopefully clarify some principles for the organization.</p>
<p>To end his keynote, Martin quotes one of his favourite authors, Peter Drucker, who wrote an impressive number of 39 books on leadership:</p>
<p><span style="font-style: italic;">“Whenever you see a successful business, someone once made a courageous decision.”</span></p>
<p>As Martin has shown, the <a href="https://www.mindtheproduct.com/the-product-decision-stack-martin-eriksson/" target="_blank" rel="noopener">Decision Stack</a> helps make better decisions faster, and that creates room for those courageous decisions that a successful company always needs.</p>
<h4>There’s more where that came from! Access more insights from our past events</h4>
<ul>
<li><a href="https://www.mindtheproduct.com/what-we-learned-at-mtp-engage-hamburg-2022/?utm_source=Mind+the+Product+Conferences&amp;utm_campaign=b757a48678-HH_2022_conference_followup_2&amp;utm_medium=email&amp;utm_term=0_583aebdcc8-b757a48678-" target="_blank" rel="noopener">What we learned at #mtpEngage Hamburg 2022</a></li>
<li><a href="https://www.mindtheproduct.com/why-does-my-product-suck-by-jen-dante/" target="_blank" rel="noopener">Why does my product suck? by Jen Dante</a></li>
<li><a href="https://www.mindtheproduct.com/robotics-and-society-by-cynthia-yeung/" target="_blank" rel="noopener">Robotics and society by Cynthia Yeung</a></li>
</ul>
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