{"id":2101,"date":"2023-01-09T11:33:02","date_gmt":"2023-01-09T11:33:02","guid":{"rendered":"https:\/\/itamargilad.com\/?p=2101"},"modified":"2023-01-24T11:32:25","modified_gmt":"2023-01-24T11:32:25","slug":"feature-factory","status":"publish","type":"post","link":"https:\/\/itamargilad.com\/feature-factory\/","title":{"rendered":"Feature Factories vs. Value Generators"},"content":{"rendered":"\n<p>Like it or not, many of us are working in <em>feature factories<\/em> . We\u2019re churning out feature after feature, trying to deliver on a roadmap. To some that\u2019s just how it\u2019s supposed to be, but for others Feature Factory became the banner term for all that\u2019s wrong with traditional product development. &nbsp;<\/p>\n\n\n\n<p>Why are we so divided? And who is right?&nbsp;<\/p>\n\n\n\n<p>Systems theory and some historical perspective can help shed light, and perhaps also offer a view of the alternatives. It may sound a bit theoretical at first, but stay with me and I promise to make it relevant very quickly.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Classic Factories&nbsp;<\/h2>\n\n\n\n<p>Here\u2019s what a production unit, for example a factory, looks like from a <a href=\"https:\/\/en.wikipedia.org\/wiki\/Systems_theory\">systems theory<\/a> perspective.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" data-src=\"https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Classic-Factory-Model-1024x532.jpg\" alt=\"\" class=\"wp-image-2102 lazyload\" width=\"1024\" height=\"532\" data-srcset=\"https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Classic-Factory-Model-1024x532.jpg 1024w, https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Classic-Factory-Model-300x156.jpg 300w, https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Classic-Factory-Model-768x399.jpg 768w, https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Classic-Factory-Model-scaled.jpg 1200w\" data-sizes=\"(max-width: 1024px) 100vw, 1024px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 1024px; --smush-placeholder-aspect-ratio: 1024\/532;\" \/><noscript><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Classic-Factory-Model-1024x532.jpg\" alt=\"\" class=\"wp-image-2102\" width=\"1024\" height=\"532\" srcset=\"https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Classic-Factory-Model-1024x532.jpg 1024w, https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Classic-Factory-Model-300x156.jpg 300w, https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Classic-Factory-Model-768x399.jpg 768w, https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Classic-Factory-Model-scaled.jpg 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/noscript><figcaption class=\"wp-element-caption\"><strong>Systems Theory View of a Factory<\/strong><\/figcaption><\/figure>\n\n\n\n<p>The function of the factory is to transform <em>inputs<\/em>\u2014materials, parts, people, machines, etc\u2014into <em>outputs<\/em> which are manufactured units. Invariably the factory produces also waste:&nbsp;leftover materials, bi-products such as heat and pollution, as well as defective units that don\u2019t comply with the specifications.&nbsp;<\/p>\n\n\n\n<p>The model immediately calls out some clear objectives (which have become the hallmarks of classic business management):<\/p>\n\n\n\n<ul>\n<li>Efficiency \u2014 Improving the ratio of output to input (aka doing more with less)<\/li>\n\n\n\n<li>Quality \u2014 Improving the ratio of output to waste<\/li>\n\n\n\n<li>Throughput \u2014 increasing manufacturing capacity to meet demand&nbsp;&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Indeed the 20th century is a story of innovation in all of those. From Ford\u2019s assembly lines to today\u2019s robotic factories, we were able to greatly increase the throughput and quality of our plants, while reducing the cost of production, which led to the product affluence we\u2019re experiencing today.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Enter The Feature Factory<\/h2>\n\n\n\n<p>Somewhere in the 1980s software started eating the world at an accelerated rate. Business executives found themselves managing companies that had a software department (which for some reason many call <em>IT<\/em>), or even managing a dedicated software company.&nbsp;<\/p>\n\n\n\n<p>For these folks the factory model still held firm; They needed to create a <em>software production unit<\/em> (aka <em>Delivery team<\/em>) with clear inputs and outputs.<\/p>\n\n\n\n<p>But there were some complications:&nbsp;&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<ul>\n<li>In software there\u2019s no \u201cone right way\u201d (a term coined by classic management theorist Frederick Winslow Taylor) to produce. Unlike production-line workers, software developers and UX designers cannot be told <em>how<\/em> to develop the software because each project is new and different; It\u2019s their responsibility to figure this out. This meant hiring better-educated people and paying them higher salaries. Person-week became the most important unit of input.<\/li>\n\n\n\n<li>As the products became more technical and complex, managers found it hard to tell the developers exactly what to build. So a new role emerged\u2014the <em>Product Manager<\/em>, or now the <em>Product Owner<\/em>, which from a classical management perspective is the person that translates the roadmaps into specifications that the \u201cDelivery\u201d team can consume.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>With these two problems out of the way we were able to create the feature factory:&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"589\" data-src=\"https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Feature-Factory-1024x589.jpg\" alt=\"\" class=\"wp-image-2103 lazyload\" data-srcset=\"https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Feature-Factory-1024x589.jpg 1024w, https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Feature-Factory-300x173.jpg 300w, https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Feature-Factory-768x442.jpg 768w, https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Feature-Factory.jpg 1119w\" data-sizes=\"(max-width: 1024px) 100vw, 1024px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 1024px; --smush-placeholder-aspect-ratio: 1024\/589;\" \/><noscript><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"589\" src=\"https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Feature-Factory-1024x589.jpg\" alt=\"\" class=\"wp-image-2103\" srcset=\"https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Feature-Factory-1024x589.jpg 1024w, https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Feature-Factory-300x173.jpg 300w, https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Feature-Factory-768x442.jpg 768w, https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Feature-Factory.jpg 1119w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/noscript><figcaption class=\"wp-element-caption\"><strong>System View of a Feature Factory<\/strong><\/figcaption><\/figure>\n\n\n\n<p>Now managers could go back to the important business of optimizing outputs to inputs. You can see the results all around you. Some optimizations such as cloud computing and pair-programming make sense.&nbsp; Others, such as open space, and performance appraisals have a more questionable impact. But perhaps the biggest productivity hack of all came from the engineers themselves. Agile development was invented to replace classic waterfall project management with a lightweight, iterative approach to creating software. However, consultants gradually learned that they can sell Agile better when they positioned it as a productivity booster \u2014 more code pushed to production in less time and effort. It was a massive success. Today I see a strong correlation between output-focus and heavy-handed implementations of Scrum and SAFe.&nbsp;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>In my<a href=\"http:\/\/itamargilad.com\/workshops\">&nbsp;<em>Lean Product Management<\/em>&nbsp;courses<\/a><\/strong> we practice using principles, frameworks and tools that bring modern product management thinking into any org. <br><strong>Secure your ticket&nbsp;for the next&nbsp;<a href=\"http:\/\/ti.to\/itamar-gilad-events\/\">public workshop<\/a>&nbsp;or&nbsp;<a href=\"mailto:info@itamargilad.com\">contact me<\/a>&nbsp;to organize an in-house workshop for your team.&nbsp;<\/strong><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">Major Cracks in The Model<\/h2>\n\n\n\n<p>In theory the feature factory just makes sense. In practice it\u2019s a very flawed model.&nbsp;<\/p>\n\n\n\n<p>In a real factory every unit produced\u2014every car, chair, or can of soda\u2014creates some value: we can sell it and earn money. Hence <strong>more output equals more value<\/strong>.<\/p>\n\n\n\n<p>When we\u2019re developing software, the features we \u201cproduce\u201d are not sold individually, but are rather <em>added<\/em> to an existing product (in this sense software development is more like city development than it is like car manufacture.) Each product change is supposed to create some <em>incremental<\/em> <em>value<\/em>\u2014more transactions, more revenue, time savings, and so on, but these are hard to measure, and we often don\u2019t measure them at all. In the spirit of our ancestor industries, we <em>assume<\/em>&nbsp; everything we choose to create is of value.&nbsp;<\/p>\n\n\n\n<p>But is it?&nbsp;<\/p>\n\n\n\n<p>In the past decade we started getting the answer.&nbsp; Companies who used A\/B experiments to test their ideas learned that in the best case scenario only <a href=\"https:\/\/hbr.org\/2017\/09\/the-surprising-power-of-online-experiments\">1 in 3 ideas<\/a> lead to any measurable improvement, and the common case is much lower\u2014 likely <a href=\"https:\/\/vwo.com\/blog\/cro-industry-insights\/\">10%-15%<\/a> success rate.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-full is-resized\"><img loading=\"lazy\" decoding=\"async\" data-src=\"https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Success-Rates-Ronny-Kohavi-research.jpg\" alt=\"\" class=\"wp-image-2104 lazyload\" width=\"746\" height=\"545\" data-srcset=\"https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Success-Rates-Ronny-Kohavi-research.jpg 868w, https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Success-Rates-Ronny-Kohavi-research-300x219.jpg 300w, https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Success-Rates-Ronny-Kohavi-research-768x561.jpg 768w\" data-sizes=\"(max-width: 746px) 100vw, 746px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 746px; --smush-placeholder-aspect-ratio: 746\/545;\" \/><noscript><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Success-Rates-Ronny-Kohavi-research.jpg\" alt=\"\" class=\"wp-image-2104\" width=\"746\" height=\"545\" srcset=\"https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Success-Rates-Ronny-Kohavi-research.jpg 868w, https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Success-Rates-Ronny-Kohavi-research-300x219.jpg 300w, https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Success-Rates-Ronny-Kohavi-research-768x561.jpg 768w\" sizes=\"(max-width: 746px) 100vw, 746px\" \/><\/noscript><figcaption class=\"wp-element-caption\">Experiment success rates and false positive risks.&nbsp; Source: <a href=\"https:\/\/dl.acm.org\/doi\/10.1145\/3534678.3539160\">Kohavi et al<\/a><\/figcaption><\/figure>\n\n\n\n<p>But the bad news doesn\u2019t end there. Every feature we launch costs us in multiple ways. In addition to the cost of development there\u2019s also the&nbsp; cost of supporting&nbsp; and maintaining the new feature for its lifetime. In a feature factory the \u201cworkers\u201d&nbsp; both produce the product and maintain it. Every addition to the product adds to the overall cost of maintenance and also complicates the codebase and the user interface, making future development that much slower and more cumbersome.&nbsp;<\/p>\n\n\n\n<p>The conclusion of these two new factors is quite unintuitive. When most of what we produce is of no value, but everything is costing us in multiple ways, <strong>optimizing for higher throughput means producing more waste faster, at an ever growing cost<\/strong> (see <a href=\"https:\/\/itamargilad.com\/velocity-vs-impact\/\">this article<\/a> for numerical examples).&nbsp; The classic path of optimizing for efficiency, quality, and throughput is sending companies down a slippery slope of producing bloated, hard-to-maintain, low-value products.&nbsp;<\/p>\n\n\n\n<p>This fact is not a secret. It\u2019s the reason for the growing rift between product organizations and traditionally-minded management. PMs, developers, and designers know that the feature factory model is horribly inadequate and wish to replace it with something better, while business-trained management persists in the age-old approach.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Join thousands of of product people who receive&nbsp;<a href=\"http:\/\/itamargilad.com\/newsletter\" target=\"_blank\" rel=\"noreferrer noopener\">my newsletter<\/a>&nbsp;to get articles like this (plus eBooks, templates and other resources) in your inbox.&nbsp;<\/strong><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">Value Creators<\/h2>\n\n\n\n<p>The very best product companies use a different mental model altogether. They pursue goals, not roadmaps, and they optimize for outcomes, not features. They view their product organizations (which are almost always broken into semi-autonomous cross-functional product teams) not as code producers, but as value creators\u2014value for the company and value for the customers. The modern product org produces not just outcomes but also <em>domain knowledge<\/em>\u2014a critical resource for success.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"653\" data-src=\"https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Value-Generator-1024x653.jpg\" alt=\"\" class=\"wp-image-2105 lazyload\" data-srcset=\"https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Value-Generator-1024x653.jpg 1024w, https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Value-Generator-300x191.jpg 300w, https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Value-Generator-768x490.jpg 768w, https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Value-Generator.jpg 1174w\" data-sizes=\"(max-width: 1024px) 100vw, 1024px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 1024px; --smush-placeholder-aspect-ratio: 1024\/653;\" \/><noscript><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"653\" src=\"https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Value-Generator-1024x653.jpg\" alt=\"\" class=\"wp-image-2105\" srcset=\"https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Value-Generator-1024x653.jpg 1024w, https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Value-Generator-300x191.jpg 300w, https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Value-Generator-768x490.jpg 768w, https:\/\/itamargilad.com\/wp-content\/uploads\/2023\/01\/Value-Generator.jpg 1174w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/noscript><figcaption class=\"wp-element-caption\"><strong>System view of the Product org as Value Creator model<\/strong><\/figcaption><\/figure>\n\n\n\n<p>This change entails even a bigger departure from the classical management approach. The product organization is no longer told what to do (as in a roadmap), but rather what to achieve (as in outcome-based goals). Delegation and trust play a key role.&nbsp;<\/p>\n\n\n\n<p>The change goes both ways. The product org needs to stop viewing itself as a production unit (you\u2019d be surprised how many do). Our job is no longer just to work heads-down developing features per a spec. The product org needs to produce <em>traction<\/em> towards the goals, and this traction needs to be communicated clearly to the rest of the company (which helps in creating trust). <a href=\"https:\/\/itamargilad.com\/resources\/idea-testing-ebook\/\">Experimentation<\/a> and <a href=\"https:\/\/itamargilad.com\/the-tool-that-will-help-you-choose-better-product-ideas\/\">evidence<\/a> play a major role. <\/p>\n\n\n\n<p>(To get a sense of what this world looks like have a look at the <a href=\"http:\/\/itamargilad.com\/gist-framework\">GIST framework<\/a>.)\u00a0\u00a0<\/p>\n\n\n\n<p>Even more broadly, the classic siloing of management, development and business has to go away. As I\u2019ve <a href=\"https:\/\/itamargilad.com\/5-tips-for-building-effective-product-management-teams\/\">written before<\/a>, our aim should be to break the walls and have the entire company work together towards shared goals\u2014creating value for the company and for the customers.<\/p>\n\n\n\n<p>Some forward-thinking managers I speak with truly desire switching to this model. But they\u2019re held back by classic thinking. I see a lot of OKRs about boosting efficiency and improving productivity. Many CTOs see having developers work at 100% capacity as the prime goal and\u00a0 push their teams to deliver more story points per sprint. While there\u2019s nothing wrong with any of these per se, they are at best second-order optimizations, and at worst major waste generators. The better optimization is pursuing <strong>a higher ratio of positive-value launches<\/strong>. If you embrace this goal, a lot of things that you do today will no longer make sense. It&#8217;s the first step in a long journey towards putting the antiquated feature factory model to rest.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>If you wish to up-level your PM skills check out my next&nbsp;<a href=\"http:\/\/ti.to\/itamar-gilad-events\/\">public workshops<\/a>&nbsp;or&nbsp;<a href=\"mailto:info@itamargilad.com\">contact me<\/a>&nbsp;to organize an in-house workshop or keynote for your team.&nbsp;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>Image: <a href=\"https:\/\/www.flickr.com\/photos\/autohistorian\/\">Alden Jewell<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Like it or not, many of us are working in feature factories . We\u2019re churning out feature after feature, trying to deliver on a roadmap. To some that\u2019s just how it\u2019s supposed to be, but for others Feature Factory became the banner term for all that\u2019s wrong with traditional product development. &nbsp; Why are we [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":2114,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[46],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - 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