Because multiple options are better than just one – Product Management Series

In my last article on defining and evaluating Influence Skills of product managers  (reminder – Influence Skills was rated as the most important quality in a survey) I mentioned the book Influence by Robert Cialdini. The book, in my opinion, is about influence tactics and not about building a longer lasting working relation based on trust and mutual value in a multi-encounter environment.

The book does present many tactics you can put to use when you are trying to break in or get what you want in some zero-sum games. In my opinion it does not help build an end to end process for win-win in outcomes in situations where you meet the same people over and over.

For instance using asking for a small act and then relying on escalation of commitment to get more and more of what you want does not sound to me like a mutual value-creation and fair value-share arrangement. As I wrote before, Influence is based on trust, mutual value-add and effective communication.

But that is just that, my opinion.

There are two invaluable tactics from the book that I recommend you use without compromising on mutual value and trust.

Because, Because, Because

The Influence book tells us about the effect of using the word ‘because’ in asking for an action from anyone. When asking for a favor/task  from others, a Harvard study found, you will have greater success if you explain the reason for your ask,

People simply like to have reasons for what they do.

For example,

“would you help me get the SKUs created in two weeks because of product launch”

In fact the study went a step further and tested just the use of the word ‘because’ even with illogical reasons and found that it had better effect than giving reason without using ‘because’.

Like saying

“would you help me get the SKUs created in two weeks because I am in a hurry”

I am not going to make a recommendation that you use ‘because’ with illogical reasons but stop with their primary finding about people like to have reasons for what they do and give a valid reason after ‘because’.  In fact this fits perfectly with my recommendation about showing mutual value and effective communication. Using ‘because’  helps us get the value message across effectively.

Options over Ultimatum

The second tactic that helps is giving your peers/customers/bosses multiple options and asking them to pick one over presenting them a single option and making it a ultimatum. Presenting multiple options changes the decision from saying yes or not to a single option to picking the best among the multiple options you present.

Here is a real life case study from the world of politics,

The WSJ article on  President Obama won the Health Care vote describes how he changed the conversation:

Mr. Obama’s most effective move may have been calling for a bipartisan summit on health care, shifting the conversation away from Democratic paralysis. Aides knew there was little chance they would reach a bipartisan agreement, but it forced Republicans to put ideas on the table, framing the choice as between two sets of ideas, rather than simply a referendum on one.

 It is easier for the people you work with to compare the merits of different options vs. deciding merits of picking or not picking the only available path you present.

I recommend you go one step further and present three options and invariably you will get the middle option.

Present multiple options because it turns a yes or no decision into informed choice among multiple options based on relative value.

Influence Skills – The Most Important Quality in a Product Manager -Product Management Series

Last time I wrote about the top 5 qualities to look for in hiring a product manager for your organization- enterprise or startup. The rankings are based on a survey of practitioners and recruiters, posed as a resource allocation question. The beauty of that question type is it requires them to make trade-offs, take a pick among many qualities when only limited points are available and also state how important each quality is relative to others.  Here is the quick summary of the rankings

1. Influence Skills
2. Strategic Thinking
3. Hustle – Getting things done
4. Analytical Skills
5. Attention to Details

In this article let me discuss influence skills and how you can evaluate that in the people you are hiring for a product manager position.

First what influence is not.

It is not a parlor game, not charm effect, not magnetic personality, not salesmanship, not smooth talking, not big presence, not about greasing wheels etc.  Influence is not a one sided winner takes all zero-sum game and definitely not a single encounter game.

You may have read the book Influence by Bob Cialdini. It is a good book but it is a set of tactics that can come in handy but not foundation of Influence. For instance, you may ease into a new working relation if you were to show them your connection to them but not succeed repeatedly if you ignore the three main skills I list below.

Consider this for a moment – in any organization, why should anyone drop what they are doing and add your ask and prioritize it ahead of others? And do it not just once but over and over in multiple encounters? How does your ask align with their priorities and incentives? Why should they trust you?

You will recognize that strong influence skill starts with trust. If you are applying parlor games to get what you want you sure will win once but it is a multiple encounter game. Only if trust exist can you even communicate effectively the common value proposition and get them to see their share of the value created.

Influence is about showing others the mutual value  if they were to work with you and deliver what you are asking for. You have to show them how big the pie is without them, how big it will grow with them being part of the effort and most importantly what is their share of the bigger pie.

What is implied here is how effectively you can communicate that value and getting them to see for themselves. It is also important that you communicate their value realization after their task is completed -

• show them mutual value,
• work with them to realize it,
• show them again what you two accomplished.

Evaluating Influence Skills

When evaluating influence skills you need to explore their understanding of what influence means. Anything that signals their view of this as one-sided game is a red flag. For instance if they use negative words to describe others they influenced that is an indication of seeing this as zero-sum game.

I would recommend starting the conversation not as a quiz but as a story telling session, asking them to pick a recent engagement and explain how they met a business objective working across boundaries and with multiple teams.

Here are things to evaluate in their story

1. How big the impact was for the business? This needs no further explanation.
2. Length of engagement – you do not want to hear a minor one-act play where they used tricks from Cialdini’s book to get someone to say yes. You want to hear a longer engagement based on trust and mutual value
3. How detailed the story is  - after they start with a summary of Situation-Action-Result? One way to weed out canned stories is to dig deeper for details by asking, “How are he players?”, “What are their priorities?”, “What exactly was their push-back?”, “What exactly did you say to them?”

From the story you are looking to evaluate if their understanding of influence comes through, they show trust as key factor and see the need for effective communication.

Anything less, you know where they stand among the pool of candidates you have.

Top 5 qualities to look for in hiring a Product Manager

I recently conducted a survey, asking product managers, hiring managers, recruiters and other startup founders to state the key qualities they look for in a product manager hire. It was posed as a resource allocation question – I gave them a limited number points to allocate among 13 different attributes.

Here is the list of Top 5 qualities that most look for based on their points allocation

1. Influence Skills – The most valued skill is the ability to influence others without any authority. This is a clear attestation that product manager touches many different groups – customers, sales, marketing, engineering, finance, operations, etc. While the product manager is the CEO of the product she does not run rest of the organization needed to make the product a success. So the key quality required in a product manager to meet all the sales and profit goals they have set for the product depends on their influence skills – getting others to adopt the product manager’s priorities and do things necessary to help the product succeed.
2.  Strategic Thinking – Despite what we hear about technical knowledge, domain expertise and obsession about product, in reality most recognize that the product managers bring in a set of skills that others do not bring to the table and these skills complement skills brought by engineers, marketing and project managers. Strategic thinking starts with asking the right questions. It is about understanding current market, where it going, competition, go to market, etc to define the right product and the roadmap. Netting it out, it is about making informed choices.

3. Hustle – Get things done – It is the other side of influence coin. While there is the sexy part of strategic analysis and market sizing there is the day to day part of constantly moving forward to get from plan to profit. Getting things done does not mean playing all positions nor does it mean activities – it is about getting results by doing whatever it takes. Sometimes you get others to do it, other times you roll up your sleeves and get it done – be it writing the data-sheet or the pitch deck.
4. Analytical Skills – This is about making informed decisions based on data instead of instincts and gut feel. If strategic thinking starts with asking the right questions, analytical skills is about seeking the right data and analyzing it to make profitable product decisions. Sometimes there is no data other times there is Big Data – a product manager with great analytical skills should know the right methods to triangulate the answers to business strategy, product roadmap and pricing questions.
   I want to point out here a case often made for using instincts when there is no data. Andrew Mason said in his final letter to employees,

   “My biggest regrets are the moments that I let a lack of data override my intuition on what’s best for our customers.”

   My strong advice is to not pay any attention to this statement. Lack of dat does not say anything about how correct or wrong are your intuitions. Lack of data means you did not make testable hypothesis or you are not looking for proxies.

5. Attention to Details – It is lot more than ensuring rounded corners on your App icon or having drop shadows in you charts. It is about starting with customer experience from first contact to renewals, like  ensuring the sales team has the right sales plays and price lists and ensuring the support team knows how to resolve an error code the customer is calling about.

So what are missing from the top 5 skills? MBA,  Domain Expertise and engineering pedigree.

A final note about domain expertise, most insist on exact domain experience before even they talk to a product manager candidate. One entrepreneur from Austin told me how difficult it had been for them to find the right candidate and then they realized that by insisting on domain expertise they were hiring for skills that product managers can learn quickly on the job versus skills that cannot be taught or have no runway to learn once on the job. Once they removed domain expertise they found a pool of people with Strategic thinking, Influence Skills, Hustle, Analytical Skills and Attention to Details.

Next up, bottom 5 and how do you measure the top 5 skills while interviewing a product manager.

Stop Saying 4Ps of Marketing

The 4Ps of marketing (or  more precisely marketing mix) is neither relevant nor correct. Luckily, most product and marketing managers who think strategically do not ever mention this concept let alone rely on it for their decision making.

Why? Let us recap the what the 4Ps stand for

Product What are you marketing?

Price  What are you charging for it?

Promotion How will you get the message out?

Place  Where will it be sold?

What is missing here?

People  Who are the customers?

Problem   What is the problem customers are trying to address? What is their compelling need? What is the job customers are trying to get done?

Positioning  How do you tell customers what job your offering is applying for?

Pay   Not just price but a comprehensive view of how your offering will get paid for its value-add? This also includes pay-now, pay-as-you-go and pay-per-use considerations. Pricing for the product remains the simplest way for a product to get paid for the job it is hired to do but expanding the scope to consider other monetization models helps to look at the bigger picture and align pay with value delivered and customer expectations.

Voila! This is another 4P  (which also points to the fact how easy it is to come up with mnemonics). You can see how starting with people and their problem helps you define the offering better instead of starting with a product and looking for ways to price and promote it and places to sell, completely ignoring customers and their needs.

The original 4Ps of marketing mix served students and consulting interviewees (People), who needed fast way to remember concepts (Problem), to help ace the test/interview  (Positioning) and were willing to pay high price (Pay).

Besides those segments and jobs to be done, 4Ps should not be used.

And if you are still hiring people based on their ability to recite 4Ps, well ….

Did you also notice Product did not feature here and I kept calling it as “your offering”?

Answer to Pricing Puzzles – Restaurants Charging Fee for Sharing

I tweeted a series of pricing puzzles. This series is my interpretation of what the answers could be. Do not treat them as absolute answers. Alternative explanations are possible.

A restaurant in Palo Alto charges $2 to split pasta and $3 to split an entree, because _____ (Hint: not costs)—
Rags Srinivasan (@rags) April 07, 2012

There are two parts to this question.

1. Why do restaurants charge a fee for sharing?
2. Why do they charge two different prices based on what is shared?

It is safe to say that those willing to share are most likely couples and they likely pay for it from the same shared budget. For everyone else, those not sharing budgets, the question of sharing does not even come into play.

A restaurant’s goal is to maximize spend per table.  Their wait-staff are essentially the sales team trying to generate more sales per table during the period it was occupied.

So when customers share, it cuts (almost in half) the spend (and hence profit) per table. To discourage customers from doing so, they make the price of the single entree look a little more unattractive by adding the split fee. This is second degree price discrimination. With the split fee, customers may see higher value (consumer surplus) when they order two vs. one.

For those who still want to share for any number of reasons including limiting portions, even with added fee sharing will provide higher consumer surplus and the restaurant gets to recoup profit.

Why charge different split fees? Price discrimination done right. If you charge one split fee, you might as well charge two.

Should they do it? What about customer backlash?

To repeat my earlier point, this is a limited segment that will share food. The rest won’t even notice the split fee.  So by all means do it as this is money that flows straight to bottom line. However they should consider their customer mix and capacity utilization.

What does this mean to you as a Tech Product Manager?

I do not recommend you following in the restaurant’s footsteps. Start with the customers and their needs. Consider how your webapp is being used by your customers.

1. Do they share login?
2. From what budget are they paying for it?
3.  Is there value for them in keeping separate logins?
4. Do they want to keep their Netflix video queue/history or Evernote clip archive separate?
5. Do they consume your limited capacity without adding to revenue?

My recommendation: Instead of trying to tack on split fees, make the price of adding second (or third) user attractive that most will do it.  (Like SurveyGizmo did)

 

It’s not a product until …

When you think of a product what comes to your mind? When does a product become a product?
Take a moment and and complete this sentence

It’s not a product until ______________________

I saw what I believe is the most correct way to complete this sentence. I am not sure if I would have come up with that in my first attempt. The answer comes to us from a Times case study of a small business trying to sell their current product into newer markets.

Here it is, I used white for text color to help you not see it before you came up with your own answer. Highlight the next line to see it.

It’s not a product until you define a set of customers whose needs you meet and who want to pay you.

I agree.