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Wednesday, November 22, 2006

Product Ownership

Leila Boujnane points to a TechCrunch item that reproduces an internal Yahoo! memo by Brad Garlinghouse, Senior Vice President - Communications, Communities, and Front Doors.

In the memo, Mr. Garlinghouse asks the question
Equally problematic, at what point in the organization does someone really OWN the success of their product or service or feature? Product, marketing, engineering, corporate strategy, financial operations… there are so many people in charge (or believe that they are in charge) that it’s not clear if anyone is in charge. This forces decisions to be pushed up - rather than down. It forces decisions by committee or consensus and discourages the innovators from breaking the mold… thinking outside the box.
This situation exists in lots of organizations, with the same consequences. In a company that makes its living selling one or more products (by which I mean to cover all of “product or service or feature” — see my earlier post What is a "product"?), multiple people have a legitimate claim to make decisions about a product. If a product isn’t marketed properly, it won’t sell. If it isn’t built properly, it may not sell — or if it does, maybe not for long. If the financials aren’t right, it may sell — but lose money.

Mr. Garlinghouse’s solution, which in my moderately long career is the only one I’ve seen to be successful, is to have exactly one person in charge of each product, with no overlap. The marketing, engineering, financial operations, etc. people for that product all report to that one person.

I believe in this structure so strongly that once I even eliminated my own job in order to make it come about. I had been in charge of the software development for four different products and helped bring about a reorganization that put everyone working on a particular product into their own group, software developers included. Fortunately the company kept me around until I managed to spot a need for my services elsewhere within the organization.

What does it mean for one person to be “in charge”? I want to draw the distinction between “delegating” and “assigning tasks”. If you delegate something to me, that means that you trust me to do it to your satisfaction. You go about your day assuming that I will do the job. If I screw it up, you will be very disappointed: you trusted me, and now you have to deal with whatever damage I caused. In contrast, if you merely assign tasks to me, you’re not trusting me: you don’t let go, and expect to oversee what I do. If anything goes wrong you may blame me, but you must also blame yourself, because you were the one in charge. So: if you delegate to me, you put me in charge; if you merely assign tasks to me, you stay in charge.

At Yahoo, Mr. Garlinghouse would have a bunch of people called General Managers, and put each one in charge of an area comprising a group of related products (because Yahoo has tons of products). That is, he would delegate his authority down to them. They would make the decisions for their areas. If Mr. Garlinghouse didn’t like a particular decision, he could overrule it, but he wouldn’t do that too often or he’d undermine the authority that he’d supposedly delegated.

But what about smaller companies?

I believe that the same role needs to be filled, though usually with a title other than General Manager. At a single-product company, the person in charge of the product has to be either the CEO or the COO. Nobody less will do, because the one product is the only thing the company has to sell. Another person can be named Product Manager, but nobody should be expecting that person to be the one in charge of the product. It’s got to be either the CEO or the COO (and not both).

If the company has more than one product, then it becomes reasonable for each product to be the responsibility of a different person. That doesn’t necessarily make it desirable: if a company has only two products, for instance, it may very well still make sense for either the CEO or the COO to keep the responsibility. But if the company is sizable and has many products, it becomes impossible for one person to handle all products, and delegating product responsibility is essential. This is when each product needs one and only one person in charge of it. The obvious title for that person is Product Manager, but it’s the role that is crucial and not the title.

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