A couple of months ago, we published a blog post about engineering productivity and how to measure it. As I was putting it together, I knew that it wouldn’t be complete without the perspective from the product side of the organization and a deeper dive into business value creation
Anabela Cesário is the best person for the job. Anabela is the Chief of Staff to the CPO and VP of ProductOps, and she was the yin to my yang when I was VP of Engineering at the company.
She’s our first guest writer and will set a high bar for upcoming guests as she brings her perspective on finding that sweet spot in the relationship between PMs and engineering leaders and how they work together to deliver business value. I hope you enjoy and learn from the article as much as I did!
- José Caldeira
Building The Right Product & Building The Product Right
I was scrolling through LinkedIn the other day when I came across José Caldeira’s article about Engineering Productivity. As I read, I nodded along at the definition José wrote for Engineering Productivity:
💡 Engineering productivity is the capacity to measure if your engineering teams are doing the right things, with the right investment, to achieve a specific business outcome.
As a Product Manager (PM), engineering productivity is essential because it provides the predictability we need in the product development life cycle.
I like the way this definition focuses on outcomes. But unfortunately, I see too many people focusing on the speed of delivery or the assets you create, not on outcomes. This is a mistake.
Everything starts with business goals and the business value that you want to create. Then you translate that into outcomes and tie those outcomes with the engineering teams' work.
The PM is in charge of building the right product, and engineering is responsible for building the product right.
As a PM, understanding what creates business value is essential because it drives our decisions about the product. (hint: the customer is at the center of everything!)
Today I will be talking about business value and what I believe is an effective way for Engineering and Product Leaders to work together along the Product Delivery Lifecycle.
I’ll also talk about how engineering metrics play an important role in bringing the right expectations to the teams and providing the much-needed oil in the machine.
Hopefully, this can help Product and Engineering leaders create a better process for working together, and ultimately create the most business value for their company.
What’s Business Value & Why Should You Care?
To put it simply:
💡Business Value = the benefits a business creates for its stakeholders. Stakeholders can be customers, investors, teams, or other external stakeholders.
When measuring Business Value, we look at three dimensions:
- Revenue
- Profitability
- Customer Value/Loyalty
For Product Managers, the customer is the most important branch of business value. We need to understand their needs and problems, and, based on this, deliver value to them.
So let’s go a step deeper and break down the customer value into different parts:
Customer Loyalty: The relationship the customer has with the company. (Mostly impacted by: Marketing, Sales, and Customer Success).
Customer Satisfaction: How satisfied the customer is with our product. (Measured by how the customer rates the product; Impacted by the Product team).
Customer Experience: The customer’s perception and adoption of our product (Measured through Weekly Active Users; Impacted by the Engineering and Product teams).
Customer Value: How the product aligns with customer needs (i.e. Why our product is chosen over competitors).
To deliver business value you need to make sure your teams are nurturing all those dimensions of customer value, through the continuous delivery and discovery loop.
💡 Continuous Delivery & Continuous Discovery Continuous Delivery & Continuous Discovery ensures that we understand the customer needs and satisfaction with our product. You continuously talk with customers, understanding and iterating on their needs.
To guarantee value creation, you need to make sure you’re building the right product, and that you’re building the product right. The only way for this to happen is if Product and Engineering work together.
At OutSystems, we call this The Product Group. This team makes sure we deliver business value by, you guessed it, building the right product and building it right.
The Product Group works and communicates together to effectively build a world-class product that best meets market needs, in an efficient and agile way.
Here’s what that looks like:
Before we look into the roles of the Product Manager (Building The Right Product) and the Engineering Manager (Building The Product Right) in more detail, it’s important to understand the Product Development Lifecycle.
This process has a lot of moving parts, so here’s a visual we like we use at OutSystems:
Now, let’s look at these moving parts, to understand the goals, processes, and collaboration moments between PMs and Engineering Leaders.
Building The Right Product
🎯 Goals
Product Managers need to understand the business and company goals + translate this into business value + ensure balance across the product development lifecycle.
📋 Process
To do this, PMs need to understand the market (i.e., what are the market trends? What are our competitors doing? How can we differentiate ourselves from the competitors? Who are our user segments, and what do they need?) And of course, the customer.
If the PM does her job well, she needs to define a product strategy that will map how the product will address the company strategy and goals.
Once the strategy is clear, we create a roadmap. This product roadmap includes all the initiatives (or epics, user stories, etc.) that will be run during the cycle. The PM needs to understand and explain how these different initiatives impact the business and what the goal cost vs. revenue is.
Initiatives then need to be prioritized. There are several methods to do this, but whichever you choose, needs to align with your company’s strategy.
Assuming you have gathered all this information, you can now explain to engineering why we need those initiatives, how they link to your company goals, etc.
IMPORTANT: Other teams should be involved throughout this process. This isn’t something the Product Team works on alone and then communicates to the rest of the team. However, the PM is accountable for the steps above.
Finally, PMs need to monitor if the product strategy is working by looking at product adoption metrics (such as weekly active users). This monitoring should have a defined cadence (quarterly, for example).
Building The Product Right
🎯 Goals
As an engineering leader, your goal is to develop a product that positively impacts the end user (i.e.generates business value) while creating a great developer experience.
You can only achieve this if you have a mindset of continuous improvement.
Engineering Leaders also need to communicate effectively with PMs and other leaders in the organization to set expectations. If there is a disconnect, how can we be sure that the features you're building will ship?
👉 Expectations need to be set both ways. Company leaders need to understand what will be delivered and when, while engineering teams need to understand the company and product goals.
📋 Process
Once the PM comes to the engineering leader with the initiatives, the engineering leader should dig deep into why this is happening.
They need to challenge and ask questions that help them understand the impact of these initiatives on the engineering side.
Some questions you can ask:
- What’s the impact of these initiatives on the product?
- Where will we allocate time to deal with technical debt and other activities? (this will ultimately be the Eng. Leader’s decision!)
- Do I have the best people to work on this?
- What skills are we missing in the team?
- Is there a critical event (timeline) that we need to ensure?
Engineering can then focus on developing and releasing new features while staying in touch with PMs to set expectations (again, both ways) continuously.
This is where engineering metrics come in.
Engineering Metrics & Predictability
Engineering Predictability translates engineering metrics (i.e., lead time, deployment frequency, PR Cycle Time, etc.) into something other functions can digest to work in parallel with the engineering team.
It’s about translating productivity metrics into “this is when and where things will be delivered.”
For example:
“I have a user story to implement, and my teams (working very efficiently) can estimate that this user story will take x amount of time.”
Predictability, therefore, is the ability to estimate and to be able to deliver within the estimated time frame.
Ultimately, it’s a way to communicate efficiency, and it helps to bring balance between the teams throughout the product development life cycle.
💡 This is, of course, an ideal scenario. The more mature your teams are, the more accurate your engineering predictability is. This is difficult when working in uncertain scenarios, for instance when you have new products, new teams while scaling, etc.
However, if your engineering machine is efficient, I expect predictability so that we can raise productivity in the rest of the organization and ultimately deliver business value.
Ultimately, engineering is at the core of providing business value, and metrics are a way to bridge the gap between engineering and other teams, setting expectations, and, if done right, creating a direct line between what engineering teams are building and the business value created.
I hope that by understanding the roles of PMs and Engineering Leaders, and how they ultimately must play in the same team all along the product delivery lifecycle, we can build products that impact our end users and create the business value needed for companies to grow.
