The classic image of product management blends discovery and agile development to incrementally build innovative new products.
However, the reality is that Silicon Valley start-ups & tech giants, including Google, Stripe, and Booking.com spend a significant amount of time working on top-down, strategic initiatives, alongside these more exploratory and innovative bets.
This is not a betrayal of modern product principles, but rather the practical consequence that the biggest bets that a company can make often involve the coordination of multiple teams, and as a result require central leadership.
Beyond that, for many large projects, risk is low or difficult to mitigate without shipping. That makes shipping fast and efficiently the best way to reduce risk and create value.
New product launches and other red phases for Stripe, Wealthfront and Credit Karma 2017-2020 These top-down deliverables, often referred to as Red Phases, JFDIs (Just F*cking Do It), or strategic projects include things like rebranding, complying with new legal requirements, or integrating a new SaaS provider (CRM, payments, etc.), as well as “big bets” that require the central coordination of multiple teams across the business (e.g. launching a new business model or service).
Larger companies may have the scale to hire dedicated project managers to handle these initiatives. But most startups and scale ups will use product managers. This gives the organizations more flexibility on how they build teams and allocate resources, as well as the strategic capabilities of PMs to address any remaining risks.
As a result, PMs will switch between agile innovation and more waterfall-like delivery from quarter-to-quarter and depending on the task at hand. This is important for PMs to grasp to be successful, as the alternative means:
- You neglect building the skills you need
- You can’t work on many high impact workstreams
- Your expectations don’t match the reality of the job
Blue Phases (innovation) vs. Red Phases (delivery)
Product Managers broadly create value in two ways: blue phases and red phases.
Blue phases
These are innovation phases. You work more autonomously, and are on the hook for results. It’s your responsibility to figure out what needs to be built to create value, and understanding the problem you’re trying to solve is most of the battle. Here you need to emphasize discovery, and how you are managing the uncertainty you face.
Success at the team level means delivering an outcome, e.g.:
- Increase customer acquisition by 20%
- Grow conversion rate by 12%
- Reduce monthly churn 10%
The outcome is clear, but the solution is unknown. The team is empowered to work through the problem space, and accountable for achieving the desired results.
Blue phases focus on defining the problem and solution Red phases
These are delivery phases, such as when you’re working on a big strategic project. A high level decision has been made to build a particular solution, and there’s conviction across the business in its ability to drive outcomes.
This is often because leadership wants to commit to a big bet that spans across multiple disciplines and teams. These sorts of moves are very difficult or impossible for individual teams to initiate. For example:
- Launching a new business model
- Changing the value proposition
- Rebranding the product
They might also happen because the company wants to develop industry-standard features or capabilities, which are therefore low risk. For example:
- Integrating a new CRM or payments provider
- Adding social sign-in
- Switching the customer service tooling used
In this case, success at the team level is defined as delivering an output. Your job is not to second guess the decision to embark on the project, or gather more evidence to support it. The decision has been made, and it’s time to make it happen. You need to deliver certainty around scope and timelines.
Red phases focus on building the solution Recognising the right phase
It’s important to understand which phase you’re in because the behaviors that lead to success in one phase result in failure in the other. Using red phase tactics in a blue phase will look like a spectacular lack of vision and ambition. Using blue phase tactics in a red phase will look egotistical, obstructive and like you don’t understand the bigger picture.
Case Study: Booking.com - Ryanair Integration
Booking.com has partnered with several airlines and travel sites (like Rome2Rio) as an acquisition channel over the last 20 years. An opportunity presented itself to become Ryanair’s preferred car hire supplier, worth over 2 million incremental bookings.
To achieve this, the care hire division of Booking.com needed to be able to integrate a new 3rd party solution for their products to be sold in an iframe.
An opportunity of this magnitude was highly unlikely to be spotted in the Product teams, who primarily focussed on conversion, customer success and insurance upsells. This commercial opportunity and decision was passed down to the product teams, with them empowered to implement as they see fit - as long as they hit a 4 month deadline.
The decisions that needed to be made by the teams:
* How scalable could the solution be in this time frame for potential future partners?
* What would be the best way to integrate with Ryanair and de-risk the delivery date?
* What really was required for a successful launch, and which features could come later?
* What were the legal, commercial and process considerations that they needed to get right?
This required a huge team effort, spanning over 20 different teams to meet the goal. It required upfront planning, trade-off decisions, de-risking conversations, weekly stand-ups and accountability, cross-functional coordination and a whole lot of motivation to meet the stretching dates.
The teams launched on time, brought in millions of incremental bookings and delivered some incredible technology upgrades at the same time. This was all down to the ability of the product managers to execute successfully in a red phase.
Red phases vs. working in a feature factory
Red phases are not the same as working in a feature factory. Red phases are one-off projects which have already been derisked, whilst in feature factories top-down management is the standard way of delivering features and the roadmap is often poorly supported by discovery.
Another way to think of this is that red phases are like a senior leader acting as PM for a team of teams, or a specific project - derisking the project through discovery is still being done. But in feature factories product work is often devoid of discovery, and output focused, rather than results focused.
This is an important distinction to recognise - as a PM in a feature factory you might want to think about how you can evolve the culture or even look for a new role. If you don’t, then you won’t get any exposure to blue phases, and your career development will be capped.
But conversely, if you never experience and master red phases, then you’re also limiting the problems you can solve, how useful you are to your company, and ultimately limiting your career prospects.
Benefits of Red Phases
Red phases are beneficial for organizations, because under the right circumstances they deliver better outcomes than blue phases:
- Facilitate “big bets” - Allow companies to tackle large, cross-functional initiatives that would be difficult or impossible for individual teams to initiate and deliver on themselves.
- Reduce risk - Are the most effective way to reduce risk in initiatives where the biggest risks are time to value and opportunity cost, rather than value and useability.
There are also significant personal benefits to being involved in red phases:
- Makes you better at execution
- Looks incredible on your CV
- Develops your executive skills
Makes you better at execution
An essential value driver in product is the ability to generate a scalable solution and get value out to customers in the shortest time frame. Getting great at red phases, means becoming an expert in delivering change effectively.
Looks incredible on your CV
Red phases provide tangible outcomes and case studies that are great additions to your CV. They are likely to have a large revenue number associated with them, which demonstrates your ability to add a big impact.
Develops your executive skills
Project management might feel like a “basic” skill, but it’s also one that senior executives need to be good at. One of the commonalities of C-Suite members is that they have the ability to deliver on large, cross functional projects (e.g. changing business model, rebranding, M&A…). If you don’t have the experience and capability to deliver large scale transformation inside your organization, you’ll never be a credible candidate for VP and CPO roles.
How to excel at red phases as a Product Manager
