As a product leadership expert, Melissa Perri has advised hundreds of Chief Product Officers on how to take a seat at the table and develop best-in-class product processes and strategies. That’s why in this session, Melissa will share her insights on the key responsibilities of a CPO, how to land and keep the job, pitfalls to avoid for newbies, and so much more!
Melissa Perri is a world-renowned product leadership expert and author of Escaping the Build Trap. Currently the CEO of Produx Labs, she is also the founder of two online schools Product Institute and CPO Accelerator, and a Senior MBA program lecturer at Harvard Business School teaching Product Management.
In this webinar, Melissa covers:
- The responsibilities of a CPO
- Landing and keeping the CPO position
- Common pitfalls to avoid for first-time CPOs
- Building out and defining the future of the role
The full transcript is provided below.
Read the Full Transcript
The following transcript has been altered for readability.
Melissa Perri: Great. Hi, everybody. Excited to be here. It’s good to see all these different people coming in from all over the world. So, first question, good question. Why should somebody bring on a chief product officer?
I’ll give you some signs that you need a chief product officer first. And then I will talk about the value that they actually add. Where I typically come into organizations and it’s going to be different, I believe, between growth stage organizations and larger organizations. The benefits are exactly the same, but the symptoms that you see kind of differ. In a growth stage organization, what typically happens is we hire a bunch of engineers. We get sometimes a couple product managers in there. We may have promoted somebody who’s been there since the beginning into the CPO position. But what you start to see in organizations, that’s a good sign that you need a chief product officer is we’re growing, we’re growing, we’re growing, and then all of a sudden, we’re trying to figure out what’s the next area of growth.
Typically, when you’re at a growth storage organization at that phase, you are trying to double, triple, quadruple your revenue, year over year, high growth, tons of things going into that. You hit this point where you’re like, “Great! The first product we built doing wonderful. What do we do next? What comes next?” And there may be a bunch of ideas and it’s really hard to prioritize. There may be a lack of confirmation that those are the right ideas to go into. Or there may just be no road map. I’ve walked into some organizations that have had a hundred engineers and no product managers. And it was like, “Where’s the road map? What are we supposed to be working on? How are we supposed to go after that?” And it’s a really good sign that you need a chief product officer.
Now, at this point, too, depending on how big you are, you could have a difference between a VP of product and a chief product officer. VPs of product are typically really great at doing one or two products in scaling that. They tend to be more focused on coaching your product managers. What a chief product officer will do that’s different than a VP of product, I would say, in addition to a VP of product, is they’re really, really good at tying the financial outcomes that the business will get back into the product road maps.
So, these people are fantastic at setting strategy by product strategy, by really helping to, one, identify what’s the right business strategy we should go after, working with the C-suite to really do that. Two, they’re able to tie the financial outcomes and what expectations we should be able to get out of the product road map back into what the C-suite’s doing and bring it along that. They’re really good at interfacing with the board, interfacing with the rest of the executives to kind of bring this all together and make sure that we are really driving our growth through product and not repeatable service, unrepeatable services and all these different things. So, they can really tie that story back together and they build teams underneath them that will really scale.
So, all of these different things really contribute to the difference, I think, between a chief product officer and a VP of product. And what it really comes down to is understanding the ROI and making sure that you get ROI from your product investments. That’s what a chief product officer is going to bring to the table. They’re going to make sure that you are building the right things that will get a return for your company and they’re making sure that you can scale appropriately with that. That’s really the difference.
In a large company, it’s very similar, but it’s also bringing that all back together. And where I see a lot of enterprises, for instance, the struggle with this is a lot of them don’t have chief product officers. They have chief information officers or chief infrastructure officers or CTOs that really rule this whole thing. And those people are making decisions that are like, “How do I make sure that my security is robust?” Really important decisions. “How do I scale my technology?”
What a chief product officer is bringing to the table there is making sure that across this enterprise, let’s say we’ve got 50,000 people, we’ve got eight business lines, all these different things. They’re trying to make sure that you can scale a product management organization and their decisions across that whole thing. And I see that missing in so many organizations.
So, what will happen is, and this has happened to me multiple times, you go in, you talk to one business line and you found out that they built exactly what they have at a different business line. So, now you’re duplicating things. You’re not really thinking in platform approaches and repeatable scalability for what you’re actually building. And that’s the things that chief product officers can help bring to the table and solve. It’s not just about investment decisions and technology scaling, it’s also about how do we … Sorry. And then this is the other piece. It’s like how do we make sure that we’re scaling our infrastructure correctly, our products that help power the business?
And then, two, they’re taking a lens that goes, “How can I win?” And sometimes these are organizations that didn’t start with software products, but what they’re asking the questions about in these types of businesses are like, “How do I innovate through software and how do I do things for my business to provide value for my customers in ways we were never able to do before because we didn’t invest in technology because we didn’t start from a software approach?”
With SaaS businesses, it’s a lot more straightforward because it’s like build software, sell software. Easy, boom, right? Money. And then your banks and your insurance companies and your other bigger companies, what the CPO brings to the table is saying, “Okay, cool. We sell financial products, we sell credit cards. Great. What can we do with those financial products that we’ve never been able to do before without software? How do we make this so much more compelling, so much more interesting, so much better for our customers by the use of software and what software can actually provide for us?”
And that’s the question that we need to ask as a chief product officer and that’s why they’re incredibly valuable to those businesses as well. But we tend to look more at technology infrastructure scaling first and then we forget about the CPO until later.
Becky Flint: Wow. Amazing to hear so many different needs and the requirements and the responsibilities of chief product officer, especially in different stages, company, different industry.
So, what are the best ways for a CPO goes into their new job, new company, even if they are experience a CPO elsewhere? What are the key things for them to achieve success quickly?
Melissa Perri: The biggest thing is really forging the relationships with the rest of the C-suite. It is the biggest reason I see chief product officers actually get the job and lose their job very quickly. And this does happen a lot is because they’re not actually interfacing as an executive. They are basically, they’re instead going into their teams, this is what they do. They go back to their teams, they say, “I need a coach, I need to develop my teams,” which is fantastic. You do need to do that, but you need to spend just as much time that you do with your teams with the rest of the executives because that’s your first team.
So, they don’t understand that my first team and the part of team that I’m on is actually this executive team. And what they do is they just gravitate towards getting into the weeds with their team. If you don’t build those relationships, you can’t get anything done as a chief product officer. It is impossible to do what you need to do, which is drive strategy, bring people together, prioritize things, have really difficult conversations about things we can do and can’t do. And you can’t have those conversations without that relationship.
So, that’s the first thing that you should do when you get into an organization, meet with the rest of the executives, put lots of time on their calendar, get to know them. Ask them how their functions work, ask them what’s been your biggest frustration with product? Find out where you can get quick wins and deliver them. I’ve seen really great CPOs go in and what they do is they go to sales and they’re like, “What’s the one thing you’ve been asking for for years and nobody’s given you,” if there’s tension there. And depending on how big it is, sometimes they just go, “Oh, that’s easy. Let’s just do it.” And then they do it and then sales is like, “Wow! We want to be your best friend now.”
So, sometimes it’s not about delivering the road map immediately or effectively, but you need to build those relationships. So, I would say that’s number one.
Number two, what I tell everybody is don’t go in with a million ideas. Go in there and listen. So, you spend the first 30 days, I would say, listening, getting the lay of the land. 60 days, you start digging into your hypotheses and assumptions and stuff like that. You should come out of a 90-day start of a product CPO position with here’s my proposed product strategy based on what I learned. And that shouldn’t be the first time that everybody saw it. You should have been communicating it as you built it along the way, getting people up to it, but have some sort of plan of what you want to fix by the end of 90 days.
And if you don’t, they’re going to be like, “What did you just do for 90 days?” So, try to really build those together. And it could be wherever you need to start. I’d say have something of a road map, whether it’s confirming the existing road map or presenting a new one. Have something like that to get the lay of the land on the team to figure out what you need to do, whether you got to hire, whether you got to restructure, anything like that. And then three, look at your processes and data and make sure that you understand the infrastructure.
So, whenever I approach assessing a product team or going in, if I was playing the interim CPO role, which I have a bunch of times, I look at how’s your product strategy, how’s your product operations set up, and are teams able to get the data they need to make decisions? And then how’s my team? Do I have the right people in the right places and is it structured correctly?
So, I do some kind of assessment like that yourself, but listen, really fill it in and then communicate it back to the rest of the leadership as you’re learning and saying, “Hey, I think I’m going to start here. What are your thoughts on it?” And make sure that you’re building because you built those relationships and because you’re building those relationships, you’re telling them your thought process, you’re introducing it to them so you’re not just bamboozling them after 90 days and changing everything. You’re warming them up to it. So, I’d say those are the really key spots to make sure that you’re successful as soon as you get in there is really build those relationships.
Becky Flint: This is just so amazing because I also observed the successful CPOs are the ones who come in to build relationships, especially with their peers and executives to figure out where the challenges are before they go to talk to team, really dive into the weeds to figure out what we need to do.
And you did mention a couple things. I think the audience also asks questions and I bring in. One of them is around product operations. You mentioned a little bit around it. Would love to hear it.
Melissa Perri: Okay. So, we’ve got as a CPO, when do you consider a product operations function. Looking forward to the next book. Yes, writing a book on product operations with Denise right now, Denise Tilles , who was our VP of product at Produx Labs and is consulting now on our own. We set up product operations in so many companies. More recently we were working with Insight Venture Partners and pretty much did product operations for all their companies there in the growth stage. And then I’ve done it at large enterprises as well. When do you need it? It’s when you start. You should do it early. Let’s say this. Earlier is better. Let’s go that way.
You don’t typically need a lot of product operations when you’re a small startup and you can turn to somebody and be like, “Hey, Joe. What’s going on over here?” That’s too small. But what happens is when you start to scale or you’re anticipating scaling, and, let’s say, you’re getting to 10 product managers, more.
As a chief product officer, you can’t keep up with all the things that are going on. It starts to get too big. That’s where product operations comes into play. And you want to start it earlier so that when you get to 10, when you get to 12, when you get to 20, you already have it because otherwise you’re going to be rushing to put it in and it’s going to be annoying. So, that doesn’t mean that you have to start with everything. When we talk about product operations, we talk about a couple key spots. One, you need to have data and insights so that you can get the data on what your products are doing to perform. So, I want to be able to check my portfolio strategy against my business goals.
I want to make sure that we are capacity planned and aligned correctly with my teams. I want to make sure that certain products are generating the revenue we expected them to. And I want to see where my money is coming from from a customer segment perspective. All of those things you need to instrument, you need to be able to get the data out of systems, put them into dashboards and be able to look at it correctly. So, that also helps the team make decisions. So, you need to have a good set of tools set up so that people can get the data, read the data, adjust the data, and figure out which way to go.
Then, we also look at things like customer research. So, I think about those things as let me get the internal data of what we’re doing out and then there’s the external data, it doesn’t live in our company. We got to go find it. So, then we think about streamlining customer research, bringing in market research, anything like that. That falls into another bucket. And then, our last bucket really is scaling through processes and tools.
Now, depending on what organization, what problems you have to fight, you may start at a different place and that’s okay. So, when you’re small, maybe you start with data and insights. I always say if you’re going to enter the growth stage, that’s really where you should start, because if you don’t understand how your portfolio is performing against your business goals, it’s going to be really, really hard to correct that. If you keep going down the wrong path for four years, then you will not grow and people will get mad and your board members will get mad. So, that’s something you got to do early and make sure that you actually instrument early.
So, when I need to know how these things are going and I can’t track that on my own because I’m too busy, I have too much of a team, I’ve got too much going on. That’s really when you need product operations. So, it’s not a hard and fast rule, but I say when your team starts to really start scaling and you’ve got more things on than you can check in on every day, good sign to start somewhere and you don’t have to put all three in at once. It’s about starting where things are breaking and then adding to it as you go.
Becky Flint: This is really amazing in thinking about why are the CPOs do not operate on their own, obviously product ops is a key elements of it. What are the other must-haves for CPOs to achieve success?
Melissa Perri: I’d say you need to make sure that you’re hiring the right team below you. So, your direct reports, typically in a growth stage company, this varies based on what the rest of your executive team looks like, but a typical situation might be you have a VP of product underneath you and a VP of design and maybe a VP or director of product operations. You got to have the right people. If you can’t trust those people or they’re not doing their job, you can’t do your job. So, I always say one big requirement is make sure they have the right people and be willing to get the right people if you don’t or be willing to train those people up. Make sure that you’re invested in that.
Another requirement is diplomacy and being diplomatic. I see a lot of people go into organizations and, “It’s my way or the highway,” and, “This is the right way we should do product strategy.” There’s always going to be an answer that helps you maximize everything and it would be a wonderful situation where everybody can just buy into that and agree, but that’s not real life. Executive teams don’t sit around all the time and do actually what’s best.
There are a lot of politics and a lot of nuances that go into it. So, you actually have to be diplomatic about some of those things and understand when you need to get social capital. You’re going to do something that you probably wouldn’t do this quarter but you might want to do it this quarter to get social capital to be able to get the buy-in and to be able to bring people on your side and actually win. So, I feel like those types of things like that, that kind of social awareness, being self-aware, being diplomatic, not just being my way or the highway, that’s absolute critical skills to have an achieved product officer.
When we were going out, when I go out and hire chief product officers for companies, and I’ve done this maybe 20 to 30 times now, I make a scorecard that’s basically based off of what the company needs, where they’re at and what kind of qualities we need in a product leader. And we use that with the recruiters to find it. So, there’s usually something about the team.
So, is it a turnaround where they have a bunch of people on the team that they would like to keep but they are not product managers? Okay, do I need to be able to train people up? Do you have a history of doing that? Are you really good at coaching and mentoring or is it a hire from scratch, because we have no product managers, which has happened a lot of times. And in that case I need to make sure that this person is really good at getting good people onto their team.
How are they with a track record of hiring and interviewing and make sure that they can build a team quickly. So, there’s something like that. There’s something about product strategy that really pertains to the stage of the company and where you’re at. So, how good are you at putting that together? Usually something about interfacing with the board, are they a professional executive when it comes to that? Do they understand how to talk to people who care about sales and finance and bring it back into product and speak their language? And then anything. Sometimes they’re the process implementer and they’ve got to do everything from scratch because there are no processes. Sometimes they look for people like that, but those kind of attributes tend to be very similar.
And then it’s about the nuance of the company. One example is I had a company that was expanding geographically and they needed to be able to enter the Asian market. So, we were looking for somebody who had experience doing that because it’s very different than the European market that they were in. So, those types of nuances we would look at as well. But that all is very company dependent.
And I think a lot of this is you can have amazing product management chops, but when you become a chief product officer, it’s about having amazing executive chops. So, you need to bridge those two things together and be able to take a holistic look from a business standpoint of the company, not just a product standpoint.
Becky Flint: This is so true and it’s really leading to one of the good question that we got a lot of people ask, which is there’s a lot of demand for our chief product officers. It’s probably the newest member in the C-suite. And there’s a lot of product leaders out there. So, how could a CPO learn and grow their own career? What other resources do you recommend?
Melissa Perri: So, this is a question I get from a lot of people, not even just CPOs, but anybody who’s trying to move into the next position is how do I gain the experience to do these things when I’m not tasked with the responsibility? And I actually just interviewed a bunch of my CPO accelerator graduates to talk about it. A lot of them moved recently into the CPO position after they went through it. But their biggest thing is do the work.
Even if you don’t have the title, do it to show people that you can do it and then get in there. So, don’t ask for permission. And I think that’s really important. We’re talking about leadership here and leadership means not waiting for somebody to grant you permission to go do the things. It’s seeing the gaps, recognizing them, and helping to fill them in a good way.
And I’m not saying take over other people’s work or anything like that, but fill in the gaps, take initiative and that’s huge when it comes into leadership. So, I would say take initiative when you view that there’s opportunities in your company. Do it. Just try to do that work.
I also had some people, one person I know who became a CPO last year, we talked about it. She said, “I would basically do product strategy exercises in my head before I got this position.” So, I’d look at what we were doing and I’d say, “Would I do it any differently? I have the numbers, I have the access here.” And then you practice that. And you can talk about it and you can say, “I’ll start to evaluate what worked, what didn’t work.” It helps you understand why decisions are made and how you’re doing that.
So, I think that’s incredibly important is do that, too. Start to round out skills that you don’t have now. Be able to understand the financial impacts of your business. I tell everybody, go meet with the chief financial officer of your company and talk about the finances that run your business and understand them deeply and understand what they care about when it comes to results for the company. And then try to pull that back into what you are doing with product. It’s great exercise.
Usually, the people in the finance team are super excited to talk to product because nobody comes and talks to them so they want to know. They were like, “Oh! Educate them as well about what you do. Do a little back and forth.” I think that’s incredibly important. So, do that and then go over to the sales team, do the same thing. “How does sales work? Can you show me how you pitch your products? Tell me about what you guys do on a day-to-day basis. How do you source leads? What’s the thing that you put together to go find the right fit for us? What could we be doing?” Build those relationships early and understand how the rest of the company works.
We get really into product and a lot of times we’re like, we know product. That’s not going to set you on the path to a chief product officer. There are a lot of people who came into this role from other disciplines and I firmly believe that if you’re going to be a chief product officer, you need to have some product experience. But these companies sometimes, without me, I’ll say I’m not involved in this, but they hire people into that role from other disciplines, from sales, from other pieces and they end up as a chief product officer and people go, “Why?”
It’s because they understand how the rest of the business works and they took the time to do that. Now, I don’t think that’s a great fit if they’ve never done product before and that’s not great. But that’s how they get the roles is because they can understand how the rest of the business usually works, and how they can tie it all back together. And I swear they’re talking about the finances, they’re talking about the business model and how they move it forward. So, you need to be able to do that, too. And I will say most companies want somebody with product experience. That almost becomes a last resort and they don’t know what to do and that’s when they start looking outside of product.
Becky Flint: This is super amazing and, end of the day, we’re not thinking about chief product officers as just a product, either. It’s definitely a business leader first and product leader as part of it. So, if we do a rapid fire, we touch upon so many good points. This is a question we’re asking every CPOs and every panel host. What are the top three to five takeaways for someone, a good CPO to become a great CPO?
Melissa Perri: Yeah. One, is the relationships. Executive buy-in relationships, are really a master of forging those things. I think that’s one.
Two, deeply understanding the financials of how your business can actually work and how you tie that back. So, the more you understand your business and the business model, the more effective of a CPO you will be.
And then three, I think … A good one. Go from a good CPO to a great CPO. Being able to manage up to the board and talk about really hard things in very diplomatic and convincing ways. I think people are afraid of boards. I sit on a board. We literally can’t tell you what to do. We’ll make suggestions, but people take that at face value and they go, “Oh, the board told me to do this.” Actually, we’re non-operating officers for a reason. We can’t tell you what to do. We’ll make suggestions. But I’m also sitting there trying to understand what’s going on and great CPOs can come in and tell their story in a way that everybody goes, “Oh!”
And sometimes it’s hard. Sometimes it’s like, “Hey! Actually we’re going to have to redo this,” or, “We made a mistake.” Those conversations are just as good because if you could tell why and how you’re going to fix it and how you’re not going to do that again, makes such a difference, hearing those different stories and when somebody comes in and it’s like, “We made a mistake,” but don’t give any detail or don’t say how it’s going to be different next time, then you start to lose confidence in people.
So, I think if you have a great CPO, I’d say working with the board and being able to communicate that but also back up to the CEO. They’re really good at getting those people on board with your plan and what you’re trying to do and they work as a partnership and they ask questions and they’re humble enough to admit mistakes but come back and build those bonds and build those relationships with really important people.
Becky Flint: That is super, super cool. Really enjoy working with you, Melissa, in some of the board discussions as well. It’s really to a lot of members there and thinking of boards and managing them versus they are just great resource and sounding board, understand the challenges, what’s working and what’s not. So, it’s a very interesting comment to say the best CPO can say, “No.”
Melissa Perri: Yeah, and I agree with that. I do agree with that, Brian. It’s like how they say, “No,” everybody can say, “No,” but the best CPOs say, “No,” in a way where everybody goes, “Okay, I get it,” right? And some people are always going to be upset, but they do it in a way that preserves relationships and allows you to move forward. That’s the difference between anybody saying, “No” and a great CPO saying, “No.” And I do agree. They have to say, “No.” I don’t think you get to a VP of product position without being able to say, “No.” So, let’s put it that way. But as a CPO, you can have really hard conversations about what you have to start doing, stop doing, not be able to do, but you keep the faith.
Becky Flint: Right. It is so critical. This is so critical. The more in the C-suite, the more is about working collaborative together, especially in the product space where everything’s so connected and the product cannot be successful without the business or without the sales or vice versa. So, super, super helpful.
There were a couple of questions around, I think, you kind of adjust a little bit in terms of how someone grows into the road to the next level. Now, let’s look at it a different way, thinking about if you’re a CPO when you try to hire someone or promote someone to the next role, regardless from a director of VP or from product to directors, what are the things that you would be looking for to understand your team and then whether they’re ready go to the next level?
Melissa Perri: I think the biggest thing is one thing I did mention, I’m looking for people who could take initiative. I will say, okay, give you the antithesis. We talked about what makes great chief product officers. Let’s talk about what makes really bad chief product officers. And this is something I have seen over and over and over again and I’m usually the person making the call on whether or not we keep that CPO or change them out.
If you are putting the blame for all of your problems on everybody else in the organization except yourself, that is the biggest sign to me that you are not ready for the position that you’re in and you’re definitely not ready for the next position. And I have seen, I’ve come into a lot of places and the first thing people do and I sympathize with a lot of the stuff. I’ve been in a position where a lot of things just don’t work and people are awful.
But what they do is they come in and they go, “I can’t do anything because sales won’t let me. I can’t do this because I’m fighting with technology.” And then they really gravitate towards process optimization instead of anything else. And there’s usually no product strategy whatsoever. I’ve seen that over a dozen times in organizations. That’s a really big sign that that person’s not ready to be a chief product officer because when you are a chief product officer, you are the boss, you are the executive. And that’s why I go, “Make the executive relationships.”
I used to work with one of the partners at Insight Partners, her name is Shelley Perry. No relation. We just have the same last name. But she would always say, “The cavalry is not coming because you are the chief product officer.” And I have seen so many people just wait for somebody to give them permission to do their jobs.
That is a great sign at any level that you are not ready for the next level because what I said, we’re like product leaders. We’re leading the product. You need to be able to take the initiative. You need to be able to put yourself out there and start to say, “Hey, if these things aren’t working, what have I been doing that is making it not work?” What can I start doing to change that and have that self-awareness that nobody’s coming? You’re the boss now. You’re just going to do it.
So, that’s a big sign that I look for. I’ve seen a lot of people who should be directors, should be VPs, should be the next level and they do all the right things and sometimes there’s just politics and there’s a CEO who doesn’t understand what a chief product officer does, they don’t understand why they need it, and that’s a bad situation.
So, I’m not saying that if you are doing all these things and you’re in an organization that won’t give you the next bump up to stay forever. I actually advise people to leave if they’re not getting the opportunities that they want. But what I’m looking for is people who take the initiative and they start to really put themselves out there. They get ahead of their bosses.
You should never have a boss coming to you to tell you what to do. You should be aligned with your boss and managing up saying, “Hey, this is where we’re at. Here’s the data, this is what I’m thinking. Can you provide some direction for me,” or, “What’s going on in your world? What vision are we going after now? What are we prioritizing? Am I on the right track?” You should be asking for feedback. A really good sign that you’re ready to go to the next level if you’re putting yourself out there like that.
And then, I talk about all of these, I wouldn’t say soft skills, just human skills. You still need to have tactical skills, too. You still need to be able to put together a product strategy, put together a road map, put these things down competently. I’m saying if you can do all that super confidently and you’ve got the human skills, that tells me you’re ready to go to the next spot. But the biggest thing I would say just does not sit back and wait for permission to do your job.
Becky Flint: This is a great question. In some ways, a little bit, not conflict, but definitely has an interesting dynamic I’ve seen, which is in your company you could have a bunch of teams, you have very ambitious product managers and they all have a different sort of a focus. Are they potentially using different tools and different ways to measure how do you leading a product organization stay still motivated and drive the alignment or visibility and those essential things for success?
Melissa Perri: Yeah. It comes back to strategy. And it’s the thing that I see most organizations not have, which is funny because everybody’s like, “Go fix my teams and teach them Scrum.” And it’s like, “Where are they scrumming to? Where are they going? What direction are they going in?” And the answer is nowhere because nobody provides direction.
If you want alignment in your teams, you need to start by creating a strategy, and getting feedback on it. I’m not saying do this in a box. It takes a long time to build a strategy that’s informed by data. We’ve done it, I’ve done it many times and it’s taken several months. I will say a good three months to come out with even a preliminary thing that we could start really, really honing in on and looking for the road maps. So, I’d say start there and then what you want to do is make sure that you communicate the strategy correctly.
So, when we start at the executive team, let’s say CPO level, we’re getting all the data, usually we have a team helping us with this. It’s not just the executives doing it in isolation. So, where you bring in your product ops teams and your other teams to help and you get your feedback from the VPs coming in, you’re trying to prioritize what are our big business goals. You’re setting that out and you’re writing it. So, anytime that a company needs to create a new strategy or a strategy at all, sometimes they just don’t have one. I sit down with the CEO, I make them write out the vision of the company first. I’ve literally had to hound people down to do this. But a lot of them really enjoy this exercise.
So, it’s like where did we come from? Where are we now? How’s it different than where we were? Where do we want to go? How’s that different from what we’re doing right now? What are we going to stop doing? What are we going to start doing? And then what do I want to prioritize for the next year or two years, three years? Typically it’s longer. Sorry. Three to five years is what I’m saying in a vision.
Then, we’re prioritizing the business goals. Okay. In order to reach that vision, here’s the three things that we need to do over the next two years, let’s say. Everybody aligns against those. And that is three goals for the entire business. There is no, “Marketing’s got their strategic intents and these people have their strategic intents.” It’s like we are all swimming in the same direction. And what happens is when you do it on that level, people stop fighting with each other. It’s no longer, “Marketing keeps asking me for this.” You all go, “Hey, we all have the same goals here, so let’s look at the goals. Is that going to help us reach the goals more than what we’re doing now? No. Okay. We’re not doing it.” We’re all getting graded on the same goals here.
So, the worst thing I see is when executive teams all have different goals and then you’re all fighting with each other and that’s where everybody gets angry. So, the biggest cause of misalignment. And then you do the same thing for your team and then you bring it down into the product goals and your product initiatives, I would say. And you have everybody swimming towards that. But we write two to three pages at least of what we’re doing and why. We explain all the context behind it and then we present it over and over and over again and then we write it in a wiki somewhere and then we do another presentation and then we have a Q&A on it and then we do another presentation.
And you should be so tired of saying the same thing over and over and over again. And when you start to feel like, “Oh, my god. I’ve said this a million times,” it will just start to sink in with your teams. You have to say it over and over and over and over again because they have not been thinking about it as much as you have. And that’s why it’s not okay to just do one strategy pitch at the beginning of the year and never talk about it again. That’s how you get misalignment.
Becky Flint: This is so cool. I’m reminded of a story. When I did strategic planning for a scaleup company had a similar situation where we have everyone come to the strategic planning, and everyone writes down where their strategy is, and how we grow the company without seeing each other’s view. So, when you flip open the paper, oh my gosh, it’s everything.
So, that misalignment really comes from misalignment in strategy. Everyone has the same goal but the way we achieve that is so different. So, aligning our CPO does play a very, very strong role. Just drive the strategic alignment across our functions and really tie back to what you said earlier of how important it is to build relationships, build trust, and understand the needs of sales and the customer success and CFO.
Melissa Perri: Yeah. There was also a question about building trust. And I just wanted to say this quickly. It’s like people ask, “How do you build trust?” And there are actually a couple of things that we don’t think about that cause trust. One is you have to demonstrate competence. You have to be able to do your job. Nobody’s going to trust you if you can’t do your job. So, show people you do your job.
And then two, it’s building the relationships that we’ve been talking about, Becky, this whole time, which is making sure that you’re meeting people and having conversations and getting to know them on a personal level, too. I think it’s really important to understand, one, what are their goals and how can you help them achieve their goals. So, what are their business goals? And then what you want to do is make sure that you show them that you’re invested in helping them achieve their goals.
They’re going to go, “Wow, this person’s on my side. They’re on my team. I get it. They’re not going to put me in harm’s way.” That establishes a lot of trust.
But two, what are their personal goals? I once worked with somebody who did not want to be in the position that they were in and they just wouldn’t do the work. And I’m so frustrated and I’m like, “What the hell is going on here? I don’t understand this.” And it turns out they were using it as a stepping stone to get to a different position and they didn’t want to be there.
And once I understood that I was like, “Oh. It changed the way that I worked with them completely,” because I was like, “All right, I guess I’m doing this work or somebody else is doing this work.” And I said, “If you don’t want to do this, we got to get somebody else in here that will help you do it while you do what you want to do. I don’t know, but hire somebody.” And they were like, “Okay. Fine.”
Once you understand those types of things, you can work through it, but understanding their personal goals, their business goals and then showing them that you’re going to help meet them is really important.
Becky Flint: Right. And it’s interesting that a couple of questions in the audience are around CPO and the CTO. So, I would love to hear a little bit more of how you work between these two roles and how to build relationships. Typically CTO arrives earlier because you have engineers first when you have a CTO. So, now CPO come in as always dedicated. So, I would love to hear what’s your suggestions on best things and the common challenges to prevent and avoid?
Melissa Perri: Yeah. So, the CTO is going to be primarily responsible for the investment decisions around technology. I say CPO and CTO should be joined at the hip. You’re like two peas in a pod. You’re doing everything together. So, when we do board presentations, typically we have a CPO and CTO present together. They present the product and tech road maps together. Depending on how the CTO presents, sometimes the CPO will lead that. But they build all the slides together, they have the conversations together, they tie all the technology decisions back into financial outcomes and the product decisions and show all that stuff.
So, typically you are working together, you are prioritizing together, you are making investment decisions and capacity planning decisions together. And the CTO should also be thinking about based on what we’re thinking for a product strategy, product strategy should always lead the technology strategy.
Big issue. If it doesn’t, you waste a lot of money. But based on the product strategy, how can I make sure that our technology scales appropriately and we have the right things here?
And I’m thinking usually about security in the CTO role and paying down tech debt a lot of times emerging platforms and making things more efficient. All of that plays into what we have to achieve from a product standpoint. And then you’re going back and negotiating if you have a ton of tech debt or things like that, you’re sitting down, you’re looking at the business goals, the objectives, what you want for it and you’re making decisions together about how much you’re paying down, when do you pay it down? Is it more important to do that now or later? I’ll also tell you a lot of those decisions comes back to investment decisions by VCs.
I’ve seen VCs just say, “Don’t care about tech debt at all this year, just get more money because we’re going to sell this company or IPO it or something and it’s somebody else’s problem. But I want my money back this year. I don’t care about the tech debt.” And you have to understand what the trajectory is for those types of things and make decisions on that level, too.
So, I think a great CPO/CTO team is a super powerful thing and they can be amazing, absolutely amazing when they partner together. And you have to remember that it’s a partnership. It’s like you two are working together constantly figuring out the big questions and then you go and do your day jobs but you’re a partnership and you should really be forging that relationship and making sure it’s incredibly close.
Becky Flint: Wow. So many questions. So, another question related to something I think you tweeted on this topic recently, which is given the current economic environment, what are the things should be front and center for CPOs and product leaders at this moment?
Melissa Perri: Yeah. I actually think more people are going to start turning to product management in this economic environment. So, everybody’s got the recession scaries right now. I’m not a financial analyst so I’m not going to tell you what’s going to happen with the market because I don’t know, but I could see how people are reacting to whatever’s going on with all their layoffs and stuff like that.
It’s like when times get tough, companies need to figure out how to scale and preserve cash. How do you do that? You scale through repeatable technology products. Product management becomes more important than ever right now because you can’t keep operating the way you were. And a lot of people would just hire a bunch of people and be like, “Everything’s good. We got tons of cash. Just go build stuff.” So, now product strategy is more important than ever because you have to prioritize, you have to lock it down, you have to make sure that you’re not spending over your means and that all the things that you are investing in are going to have an ROI.
Who does that? The chief product officer usually does that. That’s their job. So, you need a chief product officer now more than you’ve ever needed one. And if you don’t have discipline in those things and everything’s just been hunky-dory because you were making cash and everything was wonderful in the market, it’s starting to turn. So, you need to be, as a chief product officer, front and center. But the conversations you should be having right now are how do we continue to scale well and scale our revenue without scaling our costs? That’s the conversation that you should be leading with your company.
You should be making sure that you’re bringing that up to the executive team and I’m sure they’re going to appreciate those conversations because that’s what they’re thinking. And you should be bringing ideas on where you can invest, how you can set product strategy that will help with these things, and make sure that you’re really looking towards it.
The companies that we’re scaling through services or let me just throw people at the problem instead of really identifying and solving that problem. They’re the ones that are going to struggle if they don’t turn it around and really take a nice scientific approach.
So, you need to investigate why we’re building things and make sure there’s a really good business case for it based off proof, proof from testing with your customers, proof from interviewing your customers, proof from the data crunching what your portfolio is doing now and informing it. And you got to make sure that it is aligned towards the scale that you want to go at without growing all of these costs. And you got to make sure that you are looking at what can you optimize throughout the company to really be there. So, those are the types of conversations you should be having now if you’re a chief product officer in this environment and I get ahead of it because it’s going to help and that’s going to help people feel more secure about what they’re going into.
The hard part I will say right now too is that for the companies who have not been great at product management, they’re going to struggle. A lot of them try to do a transformation right now when things get tough. I remember it from 2008 times and right after. They all go, “Hey, let’s fix this. Let’s do the product management thing.” And if they’re not starting now and they’re not really invested in it, it’s going to be really hard to turn that ship around.
Transformations, I’ve led a bunch of them, they take years, four, five, six years. ING started their agile transformation and they’re doing some sort of product transformation now, but they started this close to 15 years ago and they’re still going. They said, “We’re still transforming,” and, sure, they’re way better than they were when they started now, but they’re a never-ending process. It takes a lot to turn a company that never operated this way around into a company that does operate this way. And the people who didn’t invest in it before I think are going to be really struggling during these times.
But I will say for all the product managers out there in the audience, they’re probably going to be hiring because they need more product managers and some of the other roles that we see out there are probably going to get cut, but they need people with discipline who can say, “No,” and who can prioritize things in the best interest of their company and I think that’s going to be incredibly important.
Becky Flint: Right. I will take one final question, which is interestingly, I think the question come up to windows about some of the soft skills around being a successful CPO. How do you use it in the startup companies where, as a startup CPO, quite often the product is influenced by founders. So, what are the tips on being a startup CPO?
Melissa Perri: Yeah, working with founders is incredibly different than working with a professional CEO. I’ve worked with all of them. So, usually the problem is, if you’re a startup CPO, somebody else owned the product before you. If it’s a professional CEO and I’ve worked with a couple that own them recently, I love professional CEOs because they’re literally like, “I don’t know product, can you tell me what’s happening?” And they leave you alone to go do your job. When you work with founders, it’s like that’s their baby and they have a lot on the line and that’s the first thing you need to recognize.
I don’t think people understand how much founders have on the line and especially compensation-wise when we’re looking at this, they’re like, “Well, why don’t they just give it up?” It’s usually a lot of money invested in the founders in building this thing out personally.
And also, a lot of time, it’s the thing they’ve been thinking about 24/7. It is their whole world. And if you come in there and you’re just like, “Your world is crap, I’m going to change it,” take over this product, they’re not going to react well to that.
So, when you’re building the trust of a founder, the biggest thing is, “I know this is your baby and I’m here to help you grow your baby. And that’s what I want to do. I want to make sure that this is as successful as possible and I know you invested a lot in it and I probably don’t have as deep of a knowledge as you do because you obsess about this 24/7.
So, let me be the person who helps you think about this in different ways. I will be the person who can spark some fresh ideas for you or help you see things from all different angles. Let me take some of the burden off your plate. But this is your baby, this is your vision. I’m going to help you achieve your vision at all costs.” That’s the conversation you need to have with founders, especially in a startup. It’s like, “This is your vision, this is your rodeo. I’m just here to help you execute to the best of my ability against your vision.” And that’s really what you’re doing as a startup CPO.
Now, when the company scales and it’s hard to. I will say one thing. I have a lot of empathy for startup founders because, one thing, they probably have never done this before, and you have to remember that. A professional CEO usually has been a CEO or a CEO or something at large companies over and over and over again. They have done that job a million times before they usually walk into the organization.
A founder CEO is usually a first-time CEO. It’s their first time running an organization, it’s their first time raising money, it’s their first time doing any of those things. If they’re a serial entrepreneur, you tend to see differences in working with them. But if it’s their first time, they’re learning, too. So, it’s like you got to learn together. It’s have some empathy for that, help them get to where they need to go with it. But I think sometimes we get, “They won’t let go, they won’t let me do my job,” or whatever when you’re a startup CPO. It’s because they just don’t know what they should be doing.
And I honestly see that in a lot of first-time CPOs, a lot of first-time CEOs for any size company, whether they’re a founder or not. If you were in that role for the first time, sometimes you’re like, “I don’t know what I’m supposed to do.”
So, what you do is you gravitate back towards what you know how to do. And a lot of them knew how to do product. A lot of them were in product management. A lot of them started their company doing the product. So, that’s where you have to do the interfaces, is establish a trust by really deeply empathizing with them and understanding where they came from, not getting super upset when they tip their toes into it and just being like, “Yeah, it’s going to happen. I guarantee you it’s going to happen.”
And then two, helping them ask the right questions to help steer them for what you need. “Hey, I really need to understand our market a little bit better. We’ve got a couple choices here to go after from a product strategy perspective. Here’s the data. Here’s this. This is your rodeo. Which way do we want to go? Do you want to go talk to some of our customers and understand and make a decision on that because that will help us align.”
Be the person who asks the questions to get what you need out of them and it’ll help steer them in the right direction to go do the work that you need them to do to set the direction and the guidelines that you need. So, I try to manage up, whenever I manage executives, I ask them the questions that I need the information on, and if they don’t know the answer, they usually go get it. And then that helps steer them in the right direction.
Becky Flint: Yeah. So true, Melissa. Especially thinking about your CEO, regardless as a founder or CEO, in the end, those are your stakeholders. So, find out what motivates them, what are the gaps, and how you work together. So, the soft skill you need is the same except you work with a different segment of stakeholders, so to speak. Different type of maturity, different motivation. So, wow! It’s amazing.
So, in the end, at the end of this session, we were putting additional resource contact to Melissa so that we’ll be able to direct more questions over, but this is really amazing. We should have more time. So, quickly wanted just hand it over to Kalei and wrap up today’s session.
Kalei White: Yes. So, thank you all so much for joining. This was an amazing kickoff to a whole summer of continued conversations. We have Lydia Varmazis joining us next week. She’ll be discussing how to align around the right success metrics to help gain trust and better alignment with all of your different stakeholders. And then Spiros from Dext, he’ll be discussing how to transition from being project focused to outcome-focused. And then, the lovely Trisha Price from Pendo will be joining us to talk about how to scale product in a scaling business. So, it’s going to be a great summer.