Managing People Process

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Managing People & Processes

in Product & Innovation Companies

A NASSCOM Workshop

Mar 30, 2010 - Chennai

1© 2010 - Bala Girisaballa



About

• Bala Girisaballa

– Entrepreneur

– Advisor on business & go-to-market strategy

– Led CRM Product Strategy @ Oracle – Blogger / Speaker

[email protected]

www.linkedin.com/in/girisaballapardonthedust.blogspot.com 2© 2010 - Bala Girisab

alla

mailto:[email protected]

http://www.linkedin.com/in/girisaballa





Workshop Organization

Session 1

How Product Companies Differ From Service Companies

Session 2

The Role of People And Processes In Products

Session 3

People

Session 4Processes

Session 5

Case Study – Leadership in Software Development 3© 2010 - Bala Girisaballa



• Please keep it interactive

• There will be “food for

thought” segments

• This presentation will be

made available after the

workshop (so save yourself the

effort of noting down)

• Use the provided

notepad for jotting

down comments




PRODUCT COMPANIES:COMPARISON

Session 1:




PRODUCT VS. SERVICES COMPANIES




How Are Products Different From (Pure) Services?

C a s h F l o

w

Time




What Differentiates Product Business?

• Higher gross margin

• Higher revenue multiplier

• Higher valuation• Higher risks




Product Vs. Services Margins

Product Service

Revenue 100 100

Cost of Revenue 20 60

Gross Margin 80 40

Non-Direct Cost 40 20

Net Margin 40 20




Product Evolution

Hardware

Time

Platforms

Applications

Services

Hardware

Embedded

Systems

Hardware

Independent

Systems

Platform

IndependentApplications

Application

Independent

Services

Technology Driven

Services Driven

(Soft IP : Business Models,

Processes, People)

(Hard IP: Technology, Code)




Drivers For “Service”tization of Products

Causal force Impact Effect

Commoditization of products Falling license prices

Develop services/maintenance business

with higher margins and predictability.

Oracle

Availability of reliable,

affordable, ubiquitous high

speed internet connectivity

coupled with cheap hardware

Internet connected high

powered device explosion

Move from desktop to web basedapplication.

Email

Rise of cloud computing Acceptability of data &processes on the internet

- Business model moving from license

based to utility/subscription based.

- IT investments moving from Capex toOpex for better alignment with business

growth.

Salesforce.com




Drivers For “Service”tization of ProductsCausal force Impact Effect

Mainstream adoption of open

source software

Erosion of license fee based

model with open source

competing favorably on quality

and performance

Implementation and support

wrapped around free open

source software

Red Hat

Increasing cost and complexity

of IT

Hurts adoption particularly in the

SMB space

Bundled solution – which

included hardware, software andservice packaged together

(Tivo, phone)

Rampant and uncontrollable

piracy

License revenue erosion Subscription fee / Ad based

business models

Google, Yahoo

Popularity of Web services &

interoperable software

Ready-made integration &

software assembly becomes

critical

Move from “product” centric

approach to “solution” centric

approach

Widgets, Toolkits




Nature of Product’s Services Revenue

0

50

100

150

200

Year 1 2 3 4 5 6 7 8 9 10

License Revenue Implementation Revenue Maintenance Rev

Year 1 2 3 4 5 6 7 8 9 10

License Revenue 100 100 100 100 100 100 100 100 100 100

Implementation

Revenue 100 130 155 155 155 155 155 155 155 155

Maintenance Rev 0 20 40 60 80 100 120 140 160 180

Assuming constant

License revenue,

maintenance (or

Subscription)

revenue stream is

incremental &

cumulative




Product /

Technology

Configuration, Web

Services, SaaS, Open Source,

Bundled solution

Service

Value added

services, co-

innovation, design

outsourcing,

reusable toolkits

ServicesProducts

Servicetization of Products Productization of Service




What do you think?

• Are they converging?




Key Differences

Still Exist!




People Process

TechnologyMarkets17© 2010 - Bala Girisaballa



People Process

TechnologyMarkets18© 2010 - Bala Girisaballa



Service Companies Product Companies

People

Process

Technology

Market




After Break : Session 2




Rigid Performance Metrics Soft Performance Metrics


People

Process & Delivery Focus Initiative Focus

Skill Based Learning Based

Functional Cross-Functional

Within-The-Box Outside-The-Box




Clear Specs; strong change

control

Fluid specs; flexible change

control


People

Waterfall Agile

Project Management Product Management

Risk Control Risk Selection

Process

Execution Efficient Innovation Efficient




Technology Stack Dictated Choice of Technology


People

Rigid Technology Adoption Flexible & Evolving Technology

Rigid Technology CostsHighly Variable Technology

Cost

Software Reusability is a

Byproduct

Designed for Software

Reusability

Process Technology

Insulated From Obsolescence High Obsolescence Risk




Customer Pays For CodeCustomer Pays For

Functionality


People

Strong Internal Alignment Strong Market Alignment

Requirement Are SacrosanctRequirements Must Be

Challenged

Build To Order Build To Demand

Process Technology Market

Linear But Predictable GrowthExponential But Unpredictable

Growth




There’s More…




Ownership

Products fail not because of the questions askedbut because of the questions not asked

Products do not succeed because people met their SLAs

They do because people didn’t care about them







Risk

Products succeed not because your people didn’t failbut because they failed internally many times before going to the market

Make mistakes

but learn to fix them before market notices you







Adaptability

The only customer paying for stupidity is You!

If you think you found the perfect solution, you are wrong.

Innovation is going from a more imperfect solution to a less

imperfect solution

Sometimes innovation is in following what others do















In a service company, at least the customer gets billed.

In a product company, you don’t have that luck!




Solution?




Process

Alignment

Product

People




Questions..

• How do you see alignmentin your organization?

• Do you rate yourgroup/organization aspeople centric or processcentric?

• Do the team members havemarket visibility?




After Break : Session 3 - People




Session 2:

People




Critical People Skills

-Communication

-Co-ordination

-Independent thinking

-Analytical

-“Big Picture” thinking-Cross functional sensitivity




How Does a Product Team Organize?

• Non-hierarchical

• Self-regulating

• Market oriented

• Cross-functional

• Problem oriented




Non-Hierarchical Team

• Mix of experience levels

• Mix of domain expertise with technical depth

• Clearly defined Functional Roles

• Self-sufficient




Self-Regulating Team

• Strong peer reviews

• Benchmark performance against industry

standards

• Measure performance based on market

position/ results




Market-Oriented Team

• Measure performance based on market

position/ results

• Feature costing against revenue upside

• Feature mapping to customer problem

• Creative solutions – building feature is the last

option




Cross-Functional Team

• Functional experts leading complementaryaspects of product development

– Design / Architecture

– Product management – Development/delivery

– Testing

– Release

– Security• Holistic view of the product & how it fits in the

internal ecosystem and external ecosystem




Problem-Oriented Team

• Feature mapping to customer problem

• Creative solutions – building feature is the lastoption

• Cost of a feature = – Design (x)

– Development (3x)

– Integration (5x) – Release (7x)

– Support (10x)


Th C F ti l P d t T



Product

ManagementProduct

Development

QA

Security

Marketi

ngSales

Architec

ture

Board

Technol

ogy

Foundat

ion

Release

The Cross-Functional Product Team




TALENT MANAGEMENT






Success = Intelligence + Access

Increasing

Organizational

Talent

Maturity







Defining Competencies




Defining Competencies




Behavioral Styles

AnalyticalThinking

Past

DriverAction

Present

AmiableRelationship

Empathetic

ExpressiveIntuition

Future

Tell

Control

Ask

Emote




PEOPLE & ROLES




Role: Product Management

• Product Management is a unique discipline – Strategic

– Technical

– Business

– Evangelistic• Few high-level executives truly understand the role

• PM’s get pulled into other roles based on need orincompetence of existing personnel

• PM need, impact and success is dependent oncompany size and leadership

• Managing expectations is key to a successful PM career




Product Management Role




Prod Mgmt : Engg Interface

• Engineering sees Product Management as ProjectManagement – Coordinating engineering meetings

– Note taking

– Issue Management – Tactical, not strategic

• PM should focus on “release management”

– Whole product definition

– Packaging

– Licensing/Pricing

– Coordination of Product Availability (service, support, salesreadiness, etc.)




Prod Mgmt : Sales Interface

• Sales Engineering/Pre-sales either lacksknowledge or skill to support sales

– Product Management is tapped to fill the void

– The more PM steps in the more Sales will ask for PMassistance

– The more PM steps up the less PM they do

• PM should visit customers regularly

– Not to sell, but to gather usage scenarios – Identify customer requirements and to set priorities

for new product development




Prod Mgmt : Marketing Interface

• Is there a problem with a blended role? – No, but the skill sets are quite different

• Common in early and mid-stage ventures

• Requires an extrovert personality• More tactical and creative (from a promotional

perspective)

• Closer to a sales personality than engineering

• Must like trade shows, speaking in public anddemos






Software Development Interfaces

• Architecture Board

– How does it fit in with internal ecosystem

– Browser, client baselining

– Translation / Localization considerations

– Security considerations

• Technology Foundation

– Reusable components evaluation

– Techstack baselining


Software Development Function :



Software Development Function :

Caveats

• Less Geek, more business thinking required• Discipline to stick to technology & process

compliance

• Ability to challenge requirements

• Remember that there’s many than one way toskin a cat

• Remember that market drives product and notthe other way around

• Remember that a “bad feature” is far worse than“no feature”




Role: QA

• Unique aspects of QA – Validation of business requirements

– Developing real life use cases

– Role playing customers – Why was this built?

– For who is this built?

– User training considerations

– User experience considerations

– Feature usage frequency considerations




QA Interfaces

• Security

– Application security considerations

– Network security consideration

– Secure coding compliance

• Release

– Software configuration considerations

– Integration

– Regression testing




QA Function: Caveats

• Should be the product gate keeper

• Remember to challenge (and not second

fiddle) product management

• Should go beyond functional testing – focus

on negative testing (security, performance)

• Need to be more skilled in technology,

performance, security, benchmarking issues


The Role of HR



The Role of HR

PeopleProcesses

Future / Strategic Focus

Day to Day Operational Focus

Strategic Partner • Strategic HR Planning• HR as Business Partner• Culture and Image

Change Agent • Staffing• Organizational design• Survey action planning• Performance measurement• Training and development

Employee Relations Expert • Employee relations• Labor relations

• Safety & workers’ compensation• Diversity and EEO

Administrative Expert • Compensation• Benefits

• HR information systems• Compliance




Questions..• How would you describe your

product team today?

• Can a dev manager double up as

product manager? If so, when?

• List some areas of tensions

between PM, Dev, QA & any other

function

• What are the critical factors for

building confidence & respect

among cross-functional team

members? 69© 2010 - Bala Girisaballa



People Summary

• Product teams are highly cross-functional,non-hierarchic, competency based & marketoriented

• People within cross-functional team do gothrough healthy mix of respect and tensionwhich must be channelized appropriately

• Tensions arise due to the self-regulatingnature of the team organization as well ascross-functional sensitivity issues


After Break : Session 3 - Process



After Break : Session 3 Process




Session 3:

Process


“It is not the strongest of the



Charles Darwin, “On the Origin of theSpecies by Natural Selection”, 1859

It is not the strongest of the

species that survive,

nor the most intelligent,

but rather the one most

responsive to change.”




Process orientation

M a r k e

t o r i e n t a t i o n

Fluid Rigid

Problem

oriented

Disciplined

Feature

oriented

Customer

Oriented

Right Balance

Lags MarketDOA

Custom

Software

C-Sat Issues




Hierarchical

Teams

Cooperation

WorkflowsCoordination

Incoherent Coherent

Ambition

Trust

Confidence

Acceptance

Distrust

ResentmentResignation

Cynicism




Role of Processes

• Processes arenecessary evils

• They are typically

aligned with hierarchy

• To be effective, theyshould be aligned withfunctions &relationships




Software Development Methodologies

• Waterfall

– Traditional

– Mostly linear with some scope for iteration

– Effective for large organizations

– Leads to large development lifecycle (design to

launch can be between 6 months – 2 yrs)

– Effective for complex, large, integrated software




Software Development Methodology

• Agile

– As the name suggests – built for flexibility &

adaptability

– Smaller Iterations – Effective for smaller, co-located teams

– Shrinks development lifecycle (2 weeks – 4 weeks)

– Based on building incremental feature set – Effective for applications that can be incrementally

built & maintained


l d



Tools Used

• Document mgmt

• Version control

• Bug tracking

• Project mgmt

• Wiki

• Host of other development tools







Low

High

Decentralized Centralized

SmallerOrganizations

Large

Organizations




Low

High

Decentralized Centralized

•Agile

•Low Code

Reuse

•Waterfall

•High Code

Reuse


P A R i d



Processes Are Required

• Ensure right person is doing the right role

• Streamline repetitive tasks

• Organize priorities

• Strategic decisions are top-down

• Execution decisions are bottom-up


P C



Process Caveats

• Mature products require stronger process forchange management

• Nascent products require stronger process for

market validation


C ifi i i P d C i



Certifications in Product Companies

• Certifications – ISO

– CMM

– PCI

– Other industry cert

• Drivers

– Product acceptability

– Hygiene factor – Brand image

– Industry drivers




TYING IT ALL TOGETHER


Market



Right People Right Process Right Products

Technology87© 2010 - Bala Girisaballa

P l



People

• Need to be cathedral builders!

– Empowered

– Entrepreneurial

– Enthusiastic






Questions?

[email protected]

www.linkedin.com/in/girisaballa

pardonthedust.blogspot.com90© 2010 - Bala Girisaballa

C St d







Case Study

• Leadership in Software Development

– Mary Poppendieck, Google

Documents

Managing People Process