I promise this will not be one of those navel-gazing exercises.  This is going to be a very pragmatic article about a critical and fundamental topic.

One of the consequences of the popularity of the earlier article on empowered product teams is that it uncovered several significant areas of confusion about product.

There are many important dimensions to the general topic of what’s a product, but in this article, I want to talk about why being a truly cross-functional product team is so essential, and not just some industry buzzword.

For a little context, when product was first explained to me, I was an engineer at a very engineering-centric company (HP Labs).  If you weren’t some form of engineer you were generally considered overhead.  Even the designers called themselves “Human Factors Engineers.”

When I was being coached on the tech lead role, my engineering manager needed me to understand that when creating products for the real world, engineering was not enough.  He drew on the whiteboard a very simple but important equation:

Product = Customer x Business x Technology

He went on to explain that a successful tech product has to solve for the customer, has to solve for our business, and has to solve for the technology.

This equation maps to our four big risks in tech products: addressing usability risk is part of solving for the customer; addressing feasibility risk is part of solving for the technology; and addressing business viability risk is part of solving for the business.  And value risk is a function of all three.

And further, he pointed out that if you don’t address any one of these three, then the result (the product) is going to be a failure (for the mathematically challenged, anything times zero is zero).

He then went on to describe the role of the product manager in solving for the business; the role of the designers in solving for the customers; and I was already pretty well-versed in the role of engineers in solving for the technology.

He went further to explain that these three areas were deeply intertwined.

The technology decisions can dramatically impact what the designers can do (for better or for worse).  Likewise, the design decisions can significantly impact the business considerations.  And, of course, the business constraints can and will impact the design and technology options.

Because I was moving into the tech lead role, he emphasized to me that my job was no longer just about engineering.  I had to step up and collaborate with the product manager and designer on discovering effective solutions.

Hopefully, for most of you, this is all Product 101.  You’ve already figured this out one way or another.  However, I can tell you that many people in the product world have not.

I constantly meet startup founders and product managers that think it’s all about the business model.  They bring me a business model canvas that’s all filled in (but unvalidated) that shows a beautiful business that’s sure to make a ton of money.  They’ve thought through pricing, cost structure, value proposition, and go-to-market strategy.  All they need from me is the name of an agency that can whip them up an app.  I wish what I just wrote was an exaggeration.

I also meet far too many designers, and even some design leaders (and more than a few product managers), that think product is all about the user experience.  They believe that if they just make their customers happy they’ll be successful.  If only it were that easy.  They don’t even pretend to be concerned about the economics or other business considerations – revenue, costs, sales, marketing, legal, privacy, etc.

And it’s also no secret that there’s many engineers out there that don’t see the point in either product management or design.

It’s absolutely critical that your company’s leaders in product management, user experience design, and engineering all have a deep understanding of this fundamental equation of product, and they need to actively coach their product managers, designers and engineers on this as well.

Just to drive this point home, I’m going to be very explicit here:

If the CEO of your company gets it in his or her head that one or more of your product managers has no real understanding of how the business really works, then that person has little hope of being trusted and empowered.  I can tell you that the CEO is judging product managers on this, and if they are perceived as naïve or worse, it is going to be very hard to turn that perception around.  This is why I’m pretty relentless with new product managers that they absolutely need to do their homework.

Moreover, if the CEO views one or more of the leaders of product, design or engineering as not understanding what’s involved in solving for the business, that leader has little chance of having a seat at the table when important decisions are made.

So don’t let anyone try to tell you it’s all about the business, or it’s all about the customer, or it’s all about the technology.  Product is harder than that.  It’s all about all three.

Special thanks to my SVPG Partner Chris Jones for his help with a draft of this article.

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