As many of you know, for the past several months I have focused my writing on helping managers of product managers provide better coaching of their people.

The last several articles have provided a set of coaching tools and techniques designed to help you get your product managers to competence.

However, in this and the next several articles, I would like to talk about coaching behavior and mindset.

A strong PM is not just competent in terms of knowledge and skills, she also has an effective product mindset, and consistently demonstrates good judgement in her decisions and her interactions.

In this article, I’d like to discuss an important mindset for a product manager, which is the difference between thinking like an owner, versus thinking like an employee.

I want to acknowledge up front that this article touches on a sensitive subject for many people, because the topic can quickly get personal, especially for those that have grown up in countries with different attitudes towards work and its role in one’s life.

But this is why I need to remind everyone that I’m all about sharing the practices and techniques from what I consider the best tech product teams in the world.

I’m not trying to share common practice (there are already many people that do that); I’m trying to share best practice.  I’m also trying to judge “best” by objective results and not by subjective standards.

With those caveats, many product leaders have heard the phrase “we want to hire product managers that think like an owner and not like an employee,” but what does that really mean?  And just how important is this really?

In Jeff Bezos’ original 1997 letter to shareholders he stated:

“We will continue to focus on hiring and retaining versatile and talented employees, and continue to weight their compensation to stock options rather than cash. We know our success will be largely affected by our ability to attract and retain a motivated employee base, each of whom must think like, and therefore must actually be, an owner.”

He reiterated this critical point yet again in his most recent shareholder letter.

I believe that Jeff Bezos is trying to tell us all something extremely important, and that one of the most important things a good manager/coach can help develop in her product managers is an owner mindset.

So let’s consider this “think like an owner” concept.

This is similar to the missionaries not mercenaries concept, but in truth it’s not too hard to get excited about something meaningful, like a compelling product vision, yet not think like an owner.

So while I think most owners act like missionaries, not all missionaries act like owners.

If you’ve heard any of my recent talks or articles about the importance of empowered teams, you know that this involves giving product teams ownership of a problem to solve so that they have the ability to solve problems the best way they see fit.

So the empowered product team model depends on a product manager that thinks like an owner, but it doesn’t usually happen just because the product manager is working in an empowered team.

I still remember how this concept was first explained to me when I was considering taking on the product manager responsibilities, along with the rationale I was given to my inevitable questions of “why?”:

I was told that as product manager, to think like an owner meant I needed to feel a real obligation and responsibility to my customers, my product team, my stakeholders, and my company’s investors.

Why?  Because the product team/squad takes their lead from the product manager, and the team and the company executives will judge me by my words and actions.

I was told that my product team was counting on me to provide them the context necessary for the designers and engineers to come up with the best possible solutions.

Why?  Because teams do much better work when given the context and a problem to solve, rather than describing to them the so-called requirements of a solution.

I was told that in order to do this, I’d need to “do my homework” – customers, data, business and industry (a phrase I’ve repeated literally thousands of times).

Why?  Because the designer and engineers need someone on the team with this knowledge and context, and this would be my direct contribution to solving the problems the team has been assigned.

I was told I had to commit to figuring out a way over whatever obstacles would arise, and to expect that many would indeed arise.

Why?  Because technology products are never easy.  I remember the actual phrase: “there will always be many good reasons not to ship, and it’s your responsibility to figure out a way over, around or through each obstacle.”

I was told that my performance would be measured by results (a phrase popular again today but was literally the tagline for HP in the 1980’s).

Why?  Because we need to be careful never to confuse output with outcome.  Our customers care about results, not effort or activity.

I was told that to succeed meant that I’d have to work hard to establish and maintain relationships with people from all across the company that I’d need to depend on, and would depend on me.

Why?  Because in a company, especially a large company, there are many people there to ensure that the assets are protected – the sales force, the revenue, the customers, the reputation – and getting things done in a company means understanding and respecting these constraints by coming up with solutions that work for the business.

I was told that the leaders of the company would be continuously judging me to decide if they felt I had done my homework, if I was thinking and acting like an owner, and if the product team was in good hands.

Why?  Because executives of companies with the empowered team model learn that the product manager is the canary in the coal mine.

I was also told I’d have to take responsibility when things didn’t go well, yet give credit to the team when they did go well.

Why?  Because that’s what good leaders (and good owners) do.

I was told that it was my responsibility to motivate and evangelize to my team.

Why?  Because we want a team of missionaries not mercenaries.

Finally, as most product people have heard many times before, I was told that I’d have the responsibility to ensure success, but not the authority to direct people.

Why?  Because innovation depends on true collaboration with design and engineering, which is a peer relationship and not a reporting relationship (there are other reasons as well, but that’s another article).

Now I’m not claiming this is verbatim, but I do think this is a fairly reasonable recollection, and in terms of thinking like an owner versus an employee, very much the same message I try to pass along to product managers that I’m coaching.

If I had to boil it all down, I’d say that thinking like an owner versus thinking like an employee is primarily about taking responsibility for the outcome rather than just the activities.

Interestingly, I often try to convince exceptional designers and engineers to consider moving to product management, and while I’ve had some good success with that, the single most common objection I hear is an unwillingness to take responsibility for outcomes (and the pressure that implies).  I understand and respect their choice on that, but I do agree with Jeff Bezos that this is an important mindset, especially for product managers.

Note: It’s also important to acknowledge that this entire discussion is obviously related to the stock compensation topic.  Stock compensation is designed so that you are literally an owner, not just thinking like one.  I believe it’s not at all an accident that the top tech product companies in the world – far beyond Silicon Valley – use equity to spread ownership.  There are other ways besides equity to have your key employees share in the actual rewards of product success, but I do think if CEO’s want their key people to think and behave like owners, they should compensate them like one.

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