Marty Cagan - EMPOWERED

Most of these companies have heard that Google and others use the OKR (Objectives and Key Results) technique to manage their work, and the CEO watched a video or read a book and thought it sounded easy. So they adopted the technique—layering it on top of their existing product roadmaps and culture—and every quarter there's a planning exercise that consumes a few weeks and is then largely ignored for the rest of the quarter. Most of the people on the teams say they get little if any value out of this technique.

The relationship between the technology teams and the rest of the business is not good. The stakeholders and executives have little or no trust in the technology teams. And the people on the technology teams feel like unappreciated mercenaries, subservient to the business.

Worst of all, the teams are not empowered to solve problems in ways customers love, yet work for the business. And as such, the teams can't be held accountable to results.

The product manager is really a project manager, shepherding the backlog items through the process. The designers and engineers are there just to design and code the features on the roadmap.

Motivation is low, sense of ownership is minimal, and innovation is rare.

It is easy to see why so many of these companies are ripe for disruption. And nothing at all like how product is done at strong product companies. 1

What is especially shocking to me is that it is really no secret how the best companies work, and how financially successful they are. Which raises the question, why is this the case?

In my experience, it's not that these companies don't want to transform, it's that transforming is hard , and they just don't know how . Or even what it really means to transform.

What they need is to move to empowered product teams .

Now, you may not be using that term, and you may not even realize there are different types of technology teams.

But if what I described is similar to your organization, I need to share with you a few very hard truths:

First, you have very little chance of getting meaningful business results, let alone actually innovating, from your way of working

Second, your customers are big, ripe targets for a competitor that does not operate this way (e.g., Amazon), and knows how to provide products customers love, yet work for their business

Third, you are largely wasting the talents and capabilities of the people you have hired, and your best people—the ones you desperately need to survive and thrive—will likely leave

Finally, if you think that by moving to Agile you've already done some form of digital transformation, I am sorry to tell you, but you haven't even gotten started

I'm hoping that the reason you're reading this book is because you are convinced there must be a better way.

And there is.

1 1 To be very clear, we have found exceptionally strong companies well beyond Silicon Valley, including in Shanghai, Melbourne, Tel Aviv, London, Berlin, Bangalore, and beyond, just as we have found very weak companies in the heart of San Francisco. It is the difference between the best and the rest that we focus on in this book.

In this book, I want to share and highlight the differences between how the best companies create technology‐powered products and how most companies create products.

The differences are both fundamental and striking.

The differences certainly include what many people think of as “product culture,” but strong product companies often have very different cultures from one another, so it clearly goes beyond that.

For example, consider Amazon, Google, Apple, and Netflix. I would argue all four are very strong product companies, having consistently innovated for many years, yet they each have very different cultures.

I still believe culture is extremely important, but there is something about great product companies that is more fundamental.

It comes down to the views they have on the role of technology, the purpose of the people who work on the technology, and how they expect these people to work together to solve problems.

Moreover, I don't think it's an accident that, despite their different cultures, these four companies have the most important elements in common.

What I will try to do in this book is untangle the parts of the cultures of these companies that are more a reflection of their founders' personalities from those that are essential to consistent innovation.

I want to share the important lessons I've learned regarding what separates the best from the rest.

One surprising common thread among many of the best product companies is the legendary coach, Bill Campbell. During their formative years, Bill literally provided executive coaching to the founders of Apple, Amazon, and Google, as well as several others.

To get a sense of Bill's views and values, here is one of my favorite quotes about the role of leadership in a strong product company:

Leadership is about recognizing that there's a greatness in everyone, and your job is to create an environment where that greatness can emerge .

This book is all about identifying what makes such an environment, and I want to encourage you to consider adopting these important practices and behaviors.

Please note that I am not arguing that these strong product companies are models of virtue. All of them have been justifiably criticized about some of their policies and practices. 1

But when it comes to the ability to consistently innovate, all four of these companies have demonstrated their skills, and I believe there is much to be learned from them.

At the core, I see three critically important differences between the strongest product companies and the rest:

The first is how the company views the role of technology.

The second is the role their product leaders play.

The third is how the company views the purpose of the product teams—the product managers, product designers, and engineers.

Let's take a closer look at each of these.

There is a fundamental difference between how strong companies view the role and purpose of technology as compared to most other companies.

At its most basic level, the vast majority of companies view technology as a necessary expense. They know it's important, but they think of it more as a cost of doing business. If they can outsource the labor, even better. Fundamentally, they don't really consider themselves in the technology business. Instead, they think of themselves as in the insurance business, or the banking business, or the transportation business, or whatever. Certainly, they need some technology to operate, but it's viewed as a subservient role to “the business.”

Because of that, in most companies, technology teams exist to serve the business . That is very often the exact phrase you will hear. But even if they aren't explicit about it, the different parts of “the business” end up driving what is actually built by the product teams.

In contrast, in strong product companies, technology is not an expense, it is the business. Technology enables and powers the products and services we provide to our customers. Technology allows us to solve problems for our customers in ways that are just now possible.

Whether the product or service is an insurance policy, a bank account, or an overnight parcel delivery, that product now has enabling technology at its core.