Economic Indifference, Part III

Val Workman’s response to Monday’s post on this subject was

That Economic Indifference is the sum of product management activities is an unsupported premise

The tweet stream mentioned how P&L would come to constrain product management. Agilists feel that product management constrains them. There is a lesson in these claims. That lesson is what I’ve been exploring with these last three posts.

I could talk about how models or abstractions leave details out. Or, how metrics and their roll ups amount to one big model-view-controller, or a chain of model-view-controllers. But, that would be just another near theoretical discussion. So let’s get real for a moment. Economic indifference is a theory, as well, so I’ll happily take this down to the dirt.

On day in April, years ago, something short of two weeks from my next annual vesting–no I wasn’t the product manager back then, but I did work for some great product managers back then–we were all called to a company-wide meeting. Once we were all in the room, they let us know what it was all about.

“The trading window has been closed.” Maybe they didn’t say this, because it was already closed, since we were close to the end of the quarter anyway. I’ll just remember it this way, not wanting to talk about the technicalities.

“We missed the quarter!” If this has happened to a company you’ve worked for, well then you’ve met economic indifference personally, so it isn’t┬átheorectical anymore.

“There will be an analyst call at 1 pm this afternoon. The details will be in an email we’ll send out after the meeting.”

There must have been some talk about staying positive, and staying on board, but no excuses were made, and no explanations offered.

So you get that email, close your office door, and dial in. The analyst call was exactly the same, and no explanation was given either. They told the analysts exactly what they told you. They asked the analysts to wait for the quarterly, so they had more time to analyze what happened.

This happened after the dot bust had started, but the dot bust wasn’t the cause.

At any rate, the bit representing the answer to the question “Did you miss your quarterly estimate?” It went from no to yes. That one bit, summed up all the efforts of everyone in the company. That one bit changed the world.

When the world was told about the impending analyst call, the institutional traders and their automation dumped the stock as fast as they could. After the call, those analysts downgraded their rating from a Buy to a Hold, as a minimum. Most of the analysts downgraded us to a Sell. Once they did this, the retail market had gotten the word.

Say whatever you want, but an organization’s performance as an safe place to put and multiply money is summed up in that one little bit, the answer to a single simple question. An investor never asks, “hey, do they have product managers?”

We know that we have much to do as a product manager, but at the end of the quarter, our P&L is our grade, our few little bits that answer a few little questions. If we miss our objective, it rolls up to corporate, and the financial markets will have their bits for their questions. Excuses will be made, but no truth will be told. It isn’t about truth. It isn’t about narrative. It isn’t about effort. It’s about missing the quarter. It’s about that one little bit.

Hopefully, you’re not a one product company, but even so, you share that ultimate roll up with your peers, all the other managers, and your superiors. In the end, everyone in the company contributes, and everyone is rewarded, or not.

But, if economic indifference was just a way to get graded, I wouldn’t have written anything about it. It’s really the means by which we do much to ensure success of our endeavours. And, it is the means by which we enable those who contribute to our success, because they do much, as well, that we are never asked about. It’s about the degrees of freedom that the roll up grants us, and┬áthe degrees of freedom that our team’s roll ups grants them.

It’s really about how we are driven, and how we drive.

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