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Mind the Product

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

Product Management

Louron Pratt

<p>In this interactive AMA session for <span style="text-decoration: underline;"><a href="https://www.mindtheproduct.com/membership/compare/" target="_blank" rel="noopener noreferrer">MTP Leader</a></span> members, <span style="text-decoration: underline;"><a href="https://www.linkedin.com/in/nilanpeiris/" target="_blank" rel="noopener noreferrer">Nilan Peiris</a></span>, VP of Growth at <span style="text-decoration: underline;"><a href="https://wise.com/" target="_blank" rel="noopener noreferrer">Wise</a></span> — formally known as TransferWise — shares his experience with scaling and empowering teams.</p>
<p>Watch the recording in its entirety or read on for the highlights, including:</p>
<ul>
<li>Building autonomous fast-paced product teams</li>
<li>Introducing tribes</li>
<li>Building empowerment during fast-growth</li>
<li>Persuading leadership to take an autonomous approach</li>
<li>Encouraging teams to own empowerment</li>
<li>Growth and profitability</li>
<li>Budgeting for growth</li>
<li>Preparing for the next phase of growth</li>
</ul>
<h2>Building autonomous fast-paced product teams</h2>
<p>In the session, Nilan explains why he is passionate about building autonomous teams at Wise. He says, it&#8217;s proved to be the fastest and most efficient way to develop a team. In fact, he says, &#8220;there seems to be no effective alternative that I&#8217;ve come across as of yet”. Within four months of Nilan joining the team at Wise, an autonomous culture was instilled within the organisation.</p>
<p>When building fast-paced, autonomous teams, Nilan explains the importance of planning — quarterly reviews are necessary to highlight what every team member needs to do in order to accomplish their goals.</p>
<p>Building the right mindset for new joiners at the company is also imperative. Nilan says he talks new starters through how the company grows to educate them on what matters to customers. New employees know that they must aim to deliver an experience to users which is ten times better than they would experience anywhere else.</p>
<p>Of course, Nilan adds, building an autonomous team is not easy. Managers may face resistance due to the new pace and freedom as they develop effective cross-communication to solidify critical process decisions.</p>
<h2>Introducing tribes</h2>
<p>At Wise, the company grouped 60 teams into tribes based on different areas of the business. This proved to be an effective solution for the fast-growing team. “When we communicate plans in company-wide meetings, tribes then communicate this at a much more specific level with their respective teams. Tribe leaders can project and distil a plan to an organisation of over 2,300 people.”.</p>
<p>Different tribes have different responsibilities which align priorities and autonomy. At Wise, everyone is on the same page — working to be the world&#8217;s best international bank. — a goal that &#8220;was consolidated throughout all teams and tribes,” says Nilan. Holding leaders accountable for the resources in their tribe helped teams to build, grow faster, and integrate top-down changes.</p>
<h2>Building empowerment during fast-growth</h2>
<p>When asked how to continue building empowerment amongst teams, Nilan advises leading by example as much as possible to ensure that all employees are encouraged to directly impact business growth. This, he says, is because everyone at the business participates in growth. They impact the customers’ experience in one way or another.</p>
<h2>Persuading leadership to take an autonomous approach</h2>
<p>When asked about persuading the leadership team to take a more autonomous approach to new product decisions and growth, Nilan recommends starting at the board level. “They [board and shareholders] want a level of certainty and reassurance that the company is going to grow,” he says, “but in reality, it’s all based on assumptions — you are unaware of what impact things will have on profit and sales.”</p>
<p>Having these conversations with board-level members and explaining that there is uncertainty is a hard part of the process, but it&#8217;s important, says Nilan. Eventually, over time you&#8217;ll begin to create a recurring user base of products that starts to become more predictable.</p>
<h2>Encouraging teams to own empowerment</h2>
<p>Building a culture where everyone feels comfortable to make decisions requires years of instilling the right culture and values. Nilan breaks down how they, at Wise, have continually encouraged teams to own empowerment.</p>
<h3>Validating product ideas</h3>
<p>Teams are encouraged to communicate with customers to validate their ideas. It&#8217;s common for product managers to validate their decisions by talking to members. However, the culture has developed at Wise so much so that it’s common to receive this validation from customers.</p>
<p>Developing radical levels of empowerment grows every month, which is part of how Wise has been able to operate at speed, Nilan says, “it’s a part of the culture and that’s how people manage it, it was a common pattern three years ago to seek internal validation for product changes, but now people either figure things out for themselves or talk to customers to find the answers,”</p>
<h3>Empowering teams to make big decisions</h3>
<p>Upon reiterating the effectiveness of encouraging teams to make big decisions, Nilan explains how a team had to deal with a high-level Brexit transfer process in December 2020 with almost no notice, moving £1 billion worth of funds. Although the Chief Financial Officer was made aware of this deal, that level of empowerment and decision-making still existed and helped teams to move forward.</p>
<p>Trusting that teams will make the right decisions will empower them to continue doing so. It helps employees to learn and grow quicker than if they weren&#8217;t trusted with decisions.</p>
<h3>Employee feedback and culture</h3>
<p>When looking to create a blameless culture, Nilan explains how Wise is continually looking to improve its feedback structure, “We&#8217;re actively encouraging the whole company to feel like they can give feedback on the product and marketing plan. Feedback is a gift and it can be incredibly beneficial,” he says, “if you were to ask people about psychological safety, they would feel supported through failure.” There’s a fine line between providing feedback and blaming teams for errors — there is always work to do to ensure that all employees feel that they can give and receive feedback accordingly.</p>
<p>For product managers especially, it can be difficult to deal with constant overwhelming feedback, which is why it’s important to create a safe and blameless period of retrospect. “Having a blameless tone is difficult to do. When something goes wrong you write down how to improve or avoid it next time — you learn from it. There is however a tendency to suggest unrealistic expectations,” Nilan explains. Encouraging other teams to feedback and highlight issues in the following actions of retrospect helps them to take hold of the learnings and improve it.</p>
<h2>Growth and profitability</h2>
<p>At early-stage start-ups, there always seems to be a trade-off between growing or focusing on profitability. Nilan talks about the growth journey during his time at Wise, “I’d like to say we tried to grow sustainably,” he says “dropping prices and seeing a negative gross margin to get vanity growth looks and feels great, but it doesn’t move the underlying company mission forward.”</p>
<p>At the company, everything that the team works on falls into three brackets: growth, scalability, or risk management. Teams then review how they are progressing and reflect on what are the most high-impact issues. “On the growth side, we can look at the biggest impact of growth, on scalability, we look at how we’re delivering a great customer experience for users — how we want to improve that and make it more affordable each quarter,” says Nilan. Focusing on improving the risks that have over a 50% likelihood of happening helps teams to learn quickly and deliver the best user experience as the business grows.</p>
<h2>Budgeting for growth</h2>
<p>Headcount and budgeting have been a continuous process for Wise. The rate of team growth is constrained by the rate at which leaders can hire more people, which creates limitations for the growth of a company. Nilan explains the ongoing issue of more demands for headcount than the business has cash, and the company is continually learning how to grow without issuing a pay rise for its customers.</p>
<p>To have a bigger impact, there’s always a need for new hires, says Nilan, “a few years ago, we hired 200 product managers, but that resulted in prices for customers going up. We grew in team size faster than our revenue meaning that we had to raise our prices to match our team capacity,” Following on from this, the company consequently instilled a cap to ensure that the team must grow 5% slower than revenue and customer growth, “doing so would mean we could offer our customers a 5% price decrease every year,” the problem to constantly solve is dealing with the demands for an increased headcount without increasing the pay for customers.</p>
<h2>Preparing for the next phase of growth</h2>
<p>Asked how to prepare for the next steps to grow, Nilan explains that doubling the customer support team every year is a key agenda to continually support the business. Nilan says customers are enjoying and recommending the product to others — which drives top-line growth — however, the team growth is a lot slower than it needs to be to keep up with the increasing demand of new users. “As the demand for customer service increases while the team size doesn’t grow as quickly, the probability of risks begin to increase, because there are fewer people to assist customers,” he says.</p>
<p>When you look across any team you see those who are dealing with increasing demand well, and others that aren’t. ‘What I’ve been dealing with is addressing the symptoms of teams that aren’t coping well with the accelerated growth of the business,” Nilan explains. He says that all of the growth issues are good problems to face, “if we weren’t facing these problems, then they wouldn’t be growing quickly. It’s a good problem to have but it’s quite difficult to continually find ways to grow sustainably,”</p>
<p>Looking forward, Nilan is weighing up whether it is the right time to the prospect of an <span style="text-decoration: underline;"><a href="https://www.investopedia.com/terms/i/ipo.asp" target="_blank" rel="noopener noreferrer">Initial public</a></span><span style="text-decoration: underline;"><a href="https://www.investopedia.com/terms/i/ipo.asp" target="_blank" rel="noopener noreferrer"> offering</a></span><span style="text-decoration: underline;"><a href="https://www.investopedia.com/terms/i/ipo.asp" target="_blank" rel="noopener noreferrer"> (IPO)</a></span>. He explains how it’s about concluding whether the culture is strong enough to make that milestone and stand to the scrutiny of the public market. Questions considered are whether when shareholders are involved in share price, will team members make different decisions on customer prices and value their wealth over others. “I think it is,” Nilan says, “but making that transition to becoming public is about ensuring that the culture is strong enough to see it through that phase.”</p>
<h2>Read more about scaling and empowered teams</h2>
<ul>
<li><span style="text-decoration: underline;"><a href="https://www.mindtheproduct.com/scaling-from-60-to-1000-people/" target="_blank" rel="noopener noreferrer">Scaling from 60 to 1,000 People</a></span> by Nilan Peiris</li>
<li><span style="text-decoration: underline;"><a href="https://www.mindtheproduct.com/structuring-and-scaling-product-teams-by-roman-pichler/" target="_blank" rel="noopener noreferrer">Structuring and Scaling Product Teams by Roman Pichler</a></span></li>
<li><span style="text-decoration: underline;"><a href="https://www.mindtheproduct.com/building-and-scaling-empowered-teams-ama-with-nate-walkingshaw/" target="_blank" rel="noopener noreferrer">Building And Scaling Empowered Teams: AMA With Nate Walkingshaw</a></span></li>
<li><span style="text-decoration: underline;"><a href="https://www.mindtheproduct.com/how-to-grow-and-scale-a-high-functioning-team-by-richard-cadman/" target="_blank" rel="noopener noreferrer">How to Grow and Scale a High-Functioning Team by Richard Cadman</a></span></li>
</ul>
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