In the previous post on product management, we took a high level look at the role that product managers play and the value that they provide. In this post, we go into a bit more detail, but from the point of view of companies that outsource the building of digital products (including websites, iPhone apps etc.) to digital agencies. In many (although not all) of these cases, there is no designated product manager (at either the client or the agency) and as a result, the effectiveness, popularity and commercial success of the digital product will suffer. By looking into the kind these issues in more detail, we hope to explain in more detail what it is that makes product management so critical, and also to provide an approach for companies engaging with digital agencies to avoid these pitfalls.

A typical scenario

A company that makes the vast majority of its money offline wants to do something online.  Maybe they’re a retailer looking to start selling online, or a magazine publisher wanting to make their content available online.  The client, unfamiliar with online, approaches a digital agency to help them.  Because the client is unfamiliar with online technology, they look for a digital agency that has done similar websites for similar clients.  The digital agency sits down with the client and run a series of requirements gathering workshops to understand what the client wants.  They put together long requirements specification and work with the client on a graphic treatment for the site.  On the basis of the images of these visuals, and the requirements specification, the agency builds the client its website.

It’s worth stressing that no one at the client is a designated “product manager”.  Someone will be designated as project manager, who has to work with the agency to ensure that the site is delivered to specification and on time.  But that person will not have the responsibilities associated with a product manager that we listed in our last post in the series:

1. Providing a high level vision for the product
2. Working with user interface experts to “fill in” the product vision
3. Providing a roadmap for the product’s development
4. Monitoring and adapting the product roadmap based on new insight
5. Provide a “customer-minded resource” for the rest of the company, especially the developers building the product, to draw on

Similarly, no one at the agency will be a designated product manager.  With no access to a product’s potential users or the community managers who have user relationships, or a client’s web analytics, no one in the agency is in a position to represent “users”.  Similarly, they are not best placed to represent the interests of the different stakeholders at the client  (management, marketing, BD, sales etc).

What are the pitfalls of proceeding in this way, without a product manager?

Pitfall 1:  the digital product doesn’t work as well as it could

To ensure a digital product works well, a product manager works closely both with people in the business to understand the commercial objectives for the digital product, and prospective users for the product to see how it works for them.  This knowledge is key to the product design.  Further, this is an ongoing process:  upfront work is required before the product is specified, but prototypes and early product builds should be tested with real users to inform design decisions.

On the client side, no one is assigned responsibility for this, and no one is trained to do it, so no one does it.  Clients typically are not great at specifying digital products because this may be the first digital product they’ve built.  They know they want an online shop and they expect it to work like other online shops they’ve used.  (So have a shopping basket, catalogue, checkout process etc.)  But no one at the client is likely to have stepped back and thought:  what is it that makes the buying process special for our customers in our sector? What are the key criteria customers use to make buying decisions in our sector, and what can we do to encourage them to buy from our site? Are these people who know what they want and need to find it and purchase it as quickly as possible?  Or do we need more of a browsing / window shopping experience?  How often do customers make repeat purchases, and what is the relationship between one purchase and the next?  How long is the buying cycle, and what are the key points in the buying cycle we need to facilitate that will help our users and drive our bottom line? What kind of relationships do our customers have with us, and how should the workflows be designed to reinforce those positive aspects of our relationship with them?

On the agency side, the team will be preoccupied with delivering the project on time and on budget.  The closer the digital product looks and works to “similar” projects that they’ve done before, the easier the project will be.  The agency also know that the client will inevitably compare their site to those similar pieces of work that drew them to the agency initially.  So why would an agency force a client to take a step back and challenge the client’s assumptions around commercial dynamics and user behaviours before embarking on the build?  And if it looks like the client is happy with what the agency is building, why would an agency encourage them to test it with users and potentially find out that it won’t be effective?  Better to let them find out later (once the project has been signed off and they’ve been paid), and win follow-on work off the back of that insight.

Typically, the agency will be judged by the look of the completed project.  For that reason, they will be strongly incentivized to put a lot of work into the graphic design of individual pages.  (And digital agencies, in the UK certainly, are dominated by graphic designers.)  But the agency is not incentivised to do all of the underlying ground work on which a good graphic design depends:

Taken from "Lean Product Management" by Dan Olsen. Dan took the framework from Jesse James Garrett’s “Elements of User Experience” chart, free at www.jjg.net

Because no one is being judged on conceptual design, information architecture or interaction design, no one makes sure that these are done right. The product produced would inevitably be much better designed, and hence more commercially successful, if someone did.

Pitfall 2: scope creep, project delay and budget overrun

Part of good product management is about product design.  But part of it is also about process:  managing the process and stakeholders around the development of digital products to ensure that the needs of the business and customers are met, and any conflicts / trade-offs between different stakeholders are managed.

It is highly likely that when the digital product is developed, people in the business will review it and want changes to be made.  The agency will point at the specification and show the client that this requirement was never specified, hence it can be delivered, but that will cost extra and will require extra time.  The client will be upset, because they’ll feel their request is reasonable, and it wasn’t obvious to them when they read the requirement spec that that was how the requirement would be met in practice.  So both the client and the agency suffer.  With no one single person who has a holistic view of the value to the business of an individual feature, and the engineering cost associated with implementing it, no one is in a good position to manage that trade off.  (The best product managers at digital companies manage the tension between commercial folk and engineering staff, and use that tension creatively to drive exceptional product design.)

Avoiding delivery delays and budget creep is typically the responsibility of the project manager, and often there will be one at both the client and at the agency who’ll be in trouble.  But in this case it’s not their fault:  it’s the lack of a product manager that’s to blame.  A good product manager will have flushed client requirements out as early as possible, and be commercially and technically literate enough to handle the client-digital agency tension that arises when previously unknown requirements do inevitably come to light.

Pitfall 3: product stagnation

Finally the digital product is delivered:  it’s not as good as it should be, it cost more than it ought to, and it took longer to deliver than it should.  Now what?

Launching the product is a huge opportunity to test the assumptions that went into its design, understand what works and doesn’t work and start to map out a longer term development process to drive more business value out of it.  Instead, it will typically stagnate.  No one is responsible for managing the product’s development at the client.  Maybe no one is trained in using tools like web analytics and customer feedback surveys to understand where it does and doesn’t work, and how to turn that insight into future product design features.  By this point the agency has washed their hands of the project.  They’ll be back – but normally when they have a shiny new competitor website to showoff, rather than a new insight about the client’s own business and how online is supporting their commercial strategy.

At the very moment where the client could be really learning about their customer’s behaviour, and using that knowledge to drive growth in their digital venture, the process stops.  The budget is spent, the digital agency are gone and everyone wants to move on.

Avoiding the pitfalls

Fortunately, all the above pitfalls can be avoided, to the benefit of both the business and the digital agency.

The best step a company building a digital product can take is to hire an internal product manager.  An internal person is in the best possible position to do a good job of the product management because:

1. They understand the business
2. They have ongoing relationships with the different internal stakeholders / departments
3. They understand the customer base

Sometimes that won’t be possible.  This is especially true for companies that are dipping their toes in the digital space, but who are not fully committed, or have insufficient financial resources for a full-time product manager.  In this case, it is possible to outsource the product manager role to a company like Keplar.  To do this successfully:

1. Do not outsource the role to someone at the digital agency.  The product manager role critically involves managing the tension between commercial requirements, customer / user behaviours (what the people who use the digital product actually do when they use it) and the development team.  Most digital agencies do not have the commercial or analytics expertise to represent either user behaviours or commercial requirements.  (A good agency is instead expert at rapidly building extendable digital systems, leveraging the right technology platforms and using the right processes to ensure that everything built is built quickly and is thoroughly crash tested.)  In the odd occasion where they do have the capabilities internally, the very fact that they work for the development agency means they will inevitably manage those tensions in the interests of the digital agency, rather than the client.
2. Ensure that there are designated internal staff who after the product has been built, have the necessary skills and resources to assess how well it is working, and spot where there are opportunities to improve it.  The outsourced product manager should train internal staff to use web analytics and customer feedback on an ongoing basis.  That means that even if there is no internal resource that can use that understanding to adapt the product roadmap, the company is still in a position to engage with the outsourced product manager, and the digital agency, again at a later stage to incorporate that insight.
3. Minimise budget on an initial product build, with a view to iterating it.  This is counter to the approach of many digital agencies, who will work with the client to build the most impressive v1 possible.  Unfortunately an impressive v1 tends to be expensive, and leaves the client with little appetite to adapt and iterate the product, even in the face of all the new insights (e.g. around customer behaviour) which the v1 yields
4. Utilise visual prototyping tools, with internal staff and real users (where possible) to drive requirements gathering and product design before building the v1. Visual prototyping is an incredibly powerful technique for flushing out internal requirements and beginning to get a handle on how real customers behave, before any development budget is spent.  We will cover visual prototyping tools in more detail in our next post in this series.

If you are looking at building a digital product for the first time, or developing one you already have drop us an email to explore further how putting product-management at the heart of your new product development could drive your bottom line.