After talking about my leadership principles, I will talk about another fundamental theme for a head of product, organizational culture and values. There are 5 values that I consider critical for the success of the product:
- Don’t waste time looking for culprits, focus on learning.
- Don’t compare work situations with war, nobody wants to kill anyone.
- Profit and revenue are a consequence, they should not be the main focus.
- Transparency, the foundation of a high performance team.
- Diversity, the basis of the best products.
Let’s start by defining culture.
What is culture?
The word culture comes from the Latin cultus, which means “care”, and from the French colere, which means “to cultivate”. Edgar Schein, a professor at the MIT business school, was one of the first people to talk about organizational culture in the 1970s. According to him, each company had its own personality, and its own way of acting and reacting to situations; this form is passed from employee to employee since the company’s founders.
“Culture is a set of premises that were learned and shared by a group of people while solving problems of external adaptation and internal integration. This set of premises works well enough to be considered valid and, consequently, to be taught to new members of the group as the correct way to perceive, think, and feel about these problems.“
Source: SCHEIN, Edgar. Organizational Culture and Leadership. Jossey-Bass, 2010
The culture comes from the company’s founders. The founders have their own culture and it is natural that they impress it in the organization they are creating. As a result, it is very common to think that it is something that emerges in an organization. Schein warns that this is a mistake. Cultures can and should be planned and it is the role of the product head to help plan and promote the company’s culture. For this reason, I am sharing these five values that I believe are critical for the development of successful digital products.
Don’t waste time looking for culprits, focus on learning
When mistakes happen it is common for people to try to find out who was responsible for the error. This can end up generating a culture of fear of making mistakes and, consequently, of wanting to hide mistakes, especially if there is any punishment.
The teams that not only recognize their mistakes but use them as a source of learning and improvement are the teams with the best performance. In the book The High-Velocity Edge: How Market Leaders Leverage Operational Excellence to Beat the Competition, MIT professor Steven J. Spear explains that a high-speed team has four skills:
- Be prepared to capture knowledge and encounter problems in your operation.
- Understand and solve these problems to build new knowledge.
- Share the new knowledge with the entire organization.
- Lead to develop skills 1, 2 and 3.
According to prof. Spear, that’s the secret behind Toyota’s success for so many years. Alcoa is another good example. It had a work incident rate that was around 2% per year. In a team of 40 thousand employees, this means 800 employees per year with some work incident, more than 2 per day. To combat this problem, they implemented a zero error tolerance policy. Before implementing this policy, mistakes were seen as part of the job. Employees are now encouraged to report operating errors within 24 hours, propose solutions within 48 hours, and report the solution found to their colleagues to ensure that knowledge spreads throughout the organization. This caused the risk of incidents to drop from 2% to 0.07% per year! This reduction in the incident rate meant that less than 30 employees per year had a work incident problem after the zero error tolerance policy was implemented and Alcoa achieved an increase in productivity and quality similar to that of Toyota.
In the book Smarter Faster Better: The Transformative Power of Real Productivity, Charles Duhigg, author and journalist awarded the Pulitzer Prize, compares the performance of two ICU teams, one of whom usually meets daily to discuss problems and how to avoid them and the other that usually punishes employees who make mistakes. The team that discusses and learns from mistakes performs better, which, for an ICU team, means fewer deaths and more recovered patients.
This type of environment that learns from mistakes is known as a psychologically safe environment, that is, in which people on the team can do their job without fear of negative consequences. As the product head, it is your role to create such an environment for your team and the entire company.
Don’t compare work situations with war, nobody wants to kill anyone
I often see the use of war analogies in the daily lives of companies. We will defeat this competitor. Let’s create this war room to address this issue. This is a war, we have to beat our enemies. There is a book called The Art of War, attributed to a Chinese general named Sun Tzu who lived between the years 550 and 500 BC, which is considered one of the 10 most influential business books of all time. This book has phrases like “In the face of a long battlefront, look for the weakest point and, there, attack with your greatest strength” and “The supreme art of war is to defeat the enemy without fighting”.
Although I understand the image that we want to create by making this comparison of war with business, to generate greater motivation in the team of a common enemy to be defeated, I am deeply disturbed by this analogy. War is a very ugly and sad thing. Try writing war on Google and click on the “Images” option. You will see many pictures of pain and suffering. In a war, for someone to win, someone must lose.
In my view, business is the opposite of that. The most prosperous businesses are those that positively impact everyone around you, employees, customers, suppliers, society, and even competitors. A good competitor is one that motivates you to improve. Competitors take companies out of their comfort zone. If it weren’t for them, companies would evolve much more slowly. In addition, competitors can and should join associations to pursue common goals.
Profit and revenue are a consequence, should not be the main focus
Yes, the goal of every company is to grow and make a profit, but that should not be the focus. A company’s primary purpose should be to help its customers in some way, and revenue and profit should be used as metrics that indicate whether the purpose is being fulfilled. But they shouldn’t be the only metrics, since there is always a risk of getting bad revenue, which can happen when we keep the main focus on having more revenue.
Imagine a situation where you subscribe to a service with a monthly payment and, for some reason, you need to cancel your subscription. When you try to do this, you discover that the cancellation process is super complicated. This will certainly leave you dissatisfied. The same thing happens when you take water from the fridge in a hotel room and discover that the water bottle costs 3 times more than in a supermarket. These are situations that even generate revenue for the company, but it is bad revenue, which leaves customers dissatisfied and that will probably make these customers not return and even speak ill of your company when they have the opportunity.
For this reason I like to make an analogy between recipe and profit with food:
Revenue is like food, it is necessary, it is vital for the health and success of a company, but it is not the purpose of life. You don’t wake up in the morning and the first thing you think is “how can I get more food?”
However, both a company and a person must always be attentive to the quality of the food they are eating, to be sure that it will not cause any harm to their health.
- Culture is the way a group of people responds to everyday situations. It is the role of the product head to assist in the design and promotion of the company’s culture to ensure an environment conducive to the development of successful products.
- It has five values that I believe are essential to help create a culture that enables the development of successful products. In this chapter I spoke of 3 of those values: don’t waste time looking for the culprits, focus on learning. Don’t compare work situations with war, nobody wants to kill anyone. Profit and revenue are a consequence, it should not be the main focus.
In the next chapter, we’ll talk about the importance of transparency in creating high-performance teams.
So, did you miss something in this chapter? What else would you like me to cover?
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