The Moral Case for the Product Model
In virtually all of my writing and speaking, I try to make the business case for the product model.
I’ve taken many different approaches, from the need to better take care of your customers, to the need to respond to competitors, to make better use of your technology spend and become more profitable, to the market valuations of companies that have demonstrated their ability to consistently innovate.
I meet with executive teams nearly every week, and I am all about making the business case for the product model.
However, there’s another argument for the product model, and that is the moral case.
I most definitely believe that when working in the product model, the employees are happier, and find their work more fulfilling, and feel proud about improving the lives of their customers, or improving our society, or our environment.
I have long made the case that most companies are underutilizing the talent they have. The true potential of their people is unused working on feature teams. But that’s still primarily a business case. They have hired all these people, yet they are not extracting the value.
Further, I believe that the moral case and the business case are not unrelated. Doing the right thing for employees makes good business sense.
While I absolutely believe that companies have a moral responsibility to the environment, their communities, their customers and especially their employees, I have always been reluctant to try to make the moral case for the product model. This is because I don’t have the confidence (or maybe it’s the arrogance) to go to a CEO, and try to argue that their employees deserve better.
And in fairness, in my experience most CEO’s would say that all things considered equal, of course they would much rather do the right thing for their employees. But as they see it, business is brutal, and they are doing better than most if they can just avoid having to lay off employees.
But recently I learned of a book that seems to have been under the radar. The author, Seth Godin, is very well known, especially in marketing circles. He’s written more than 20 books, many of which are bestsellers and marketing classics. But a year ago he released a short book that’s a bit outside of his normal wheelhouse, called The Song of Significance, A New Manifesto for Teams.
A friend that had also read my books suggested to me that this book makes many of the same arguments, but from the moral perspective.
After reading the book, I absolutely consider it a terrific companion to TRANSFORMED. It’s essentially a deep dive into what it really means when we say we want empowered teams of missionaries rather than teams of mercenaries, and why these people have such higher satisfaction with their work.
Empowered teams of missionaries have purpose; they are passionate about the product vision, they are fully empowered to use their minds and their skills to their full potential to solve hard problems for their customers and their company, and they feel a real sense of ownership of the outcome.
But I do want to be careful here.
I very much hope that you care about the happiness of your colleagues and especially your employees, and you want your teams to feel the joy and satisfaction of working on something meaningful. But I don’t want to suggest that anyone should march into their CEO’s office and start lecturing them about their need to “do the right thing.” This would very likely not end well for you.1
Rather, I still believe that you should focus your argument to your company’s leaders on the business case, and prove out the business benefits of the product model with a small number of pilot teams.
Where I find the moral case especially helpful is that there has always been a subset of people, usually individual contributors, that have given up hope of finding satisfaction and meaning in their work. At this point, they’re just looking for a reliable paycheck. I’ve found that some of these people respond to the moral case more so than the business case.
Seth’s book is not exclusively about product teams, although you’ll recognize most of the concepts and principles he argues for. As with his other books, there are many compelling anecdotes and stories to help bring his points to life.
However, there was one short story that I’d like to share here because it gets right to the heart of the product model, and very clearly illustrates the power of meaning:
In 1973, founder Ray Anderson created a commercial carpet tile business called Interface, and over the next 20 years, grew the company to be an industry leader. But in 1994, a prospective customer pointed out the environmental damage created by industrial carpet, and this inspired Ray to learn more, and then to want to do better.
As the CEO, Ray then made a major decision regarding the company’s business strategy.
He gathered his leadership team together and told them that “Together they were going to stop pillaging the earth, and instead set an example for other companies. They were going to rebuild the entire operation to climb the mountain of sustainability, and remain profitable as they did.”
He then admitted that he had no idea how to do that. But he challenged his team: “We will achieve sustainability by the year __. You must fill in the year.”
Today, Interface sells commercial carpet tiles that are not only carbon-neutral, but carbon-negative. The company has been widely recognized as a global leader in sustainability, and the financial success has followed, with a valuation of over USD $1B.
But beyond the benefits to the environment and the ongoing business results, the team described how the journey to rebuild their company around this much more meaningful vision changed each of them personally: “It turned jobs into careers. They learned new skills and developed into leaders. Ray’s challenge had transformed the profit-focused grind of a factory into a life filled with significance–one narrated by meaning, not only a paycheck. Ray Anderson was brave, but it was his team who were the heroes.”2
I’d like to highlight a few things that are important not to miss. First, as the leader, Ray identified a critical and meaningful vision and problem to solve (becoming carbon-neutral), and made sure everyone understood the reasons why. He then empowered his team to go figure out how to solve this problem. This is the leader’s job.3
The team knew they needed to acquire and develop new skills, especially around enabling science and technology, to discover a solution to this problem in a way that customers loved, and was environmentally sustainable, and could maintain profitability.
This is an exceptionally clear example of leadership inspiring a company with a meaningful vision, and empowering a team by assigning them an important problem to solve (an objective) with a clear measure of success (key results).
I hope you’ll read Seth’s book. It’s full of relevant points, principles and examples. The types of teams that Seth and I both write about are still clearly in the minority, but I continue to meet leaders, teams and companies that are on this journey, and they are the ones that give me real hope for our future.
