Matt LeMay: Why one CEO question saves PMs from layoffs

1. 0:00 – 4:23

   Introduction to Matt LeMay

   1. MLMatt LeMay0:00

      More product managers and teams are getting laid off. The problem is the message that Daniel Ek from Spotify sent out with their layoffs in 2024, we still have too many teams doing work around the work.

   2. LRLenny Rachitsky0:10

      Even if you are told to build a thing that the execs are really excited about, you're still going to get fired eventually.

   3. MLMatt LeMay0:15

      If you were the CEO of this company, would you fully fund your own team? Frankly, most of the people I ask that question to don't know the answer right away.

   4. LRLenny Rachitsky0:24

      Which is something called the low-impact PM death spiral.

   5. MLMatt LeMay0:26

      It's the dynamic in which every medium to large company I've ever worked with finds itself in one way or another. It starts with adding little features here and there, making little cosmetic improvements, until the next round of layoffs.

   6. LRLenny Rachitsky0:39

      You have three steps to become more of an impact for a product team.

   7. MLMatt LeMay0:42

      So the first is in setting team goals no more than one step away from company goals. Don't let it get cascaded into oblivion.

   8. LRLenny Rachitsky0:49

      You're an ICPM. It's up to you. No excuses.

   9. MLMatt LeMay0:52

      You can follow all the best practices, but if your company goes out of business, they're not going to keep writing your paycheck for two years because all of your OKRs were at .6 or at .7.

   10. LRLenny Rachitsky1:02

       Today my guest is Matt LeMay. Matt is a longtime product leader, author of one of the most popular and practical books in the field of product management called Product Management in Practice. And over the course of his consulting practice, he's worked with hundreds of product teams, helping them improve how they operate and drive more impact more consistently. From that experience, he wrote and recently published a new book called Impact-First Product Teams that I could not agree more with. In our conversation, Matt shares why it is so essential to align all of your work with business critical outcomes, especially if you fear layoffs at your company. We talk about the low-impact death spiral that many product teams fall into, what steps an individual product team can take to align their work to business critical outcomes regardless of how their organization approaches product development, tips for how to push back on stupid ideas that execs ask you to build, and so much more. The message in this episode is one that I believe every product manager needs to hear, especially if you don't work at a high-flying Silicon Valley tech company. A huge thank you to Martin Eriksson, Adrian Jozello, and Dan Corbin for suggesting topics and questions for this conversation. If you enjoy this podcast, don't forget to subscribe and follow it in your favorite podcasting app or YouTube. Also, if you become an annual subscriber of my newsletter, you get a year free of a bunch of incredible products, including Replit, Lovable, Bolt, N8N, Linear, Superhuman, Descript, Whisperflow, Gamma, Perplexity, Warp, Granola, Magic Patterns, Raycast, JetPRD, Mobben, and more. Check it out at lennysnewsletter.com and click bundle. With that, I bring you Matt LeMay. This episode is brought to you by Interpret. Interpret is a customer intelligence platform used by leading CX and product orgs like Canva, Notion, Perplexity, Strava, Hinge, and Linear to leverage the voice of the customer and build best in class products. Interpret unifies all customer conversations in real time from Gong recordings to Zendesk tickets to Twitter threads and makes it available for your team for analysis and for action. What makes Interpret unique is its ability to build and update a customer-specific knowledge graph that provides the most granular and accurate categorization of all customer feedback and connects that customer feedback to critical metrics like revenue and CSAT. If modernizing your voice of customer program to a generational upgrade is a 2025 priority like customer-centric industry leaders like Canva, Notion, Perplexity, and Linear, reach out to the team at interpret.com/lenny. That's E-N-T-E-R-P-R-E-T.com/lenny. This episode is brought to you by Pragmatic Institute, a trusted leader in product training and the go-to source for teams driving real results. This fall, they're back with the biggest event of the year, the Future of Product Management Summit. On October 16th, join thousands of product managers, marketers, and leaders for a free virtual experience built to tackle today's toughest challenges and explore the future of product. You'll hear from trusted voices like Teresa Torres and Matt LeMay, along with Pragmatic's expert instructors and other innovators who are transforming how teams tackle AI, prioritization, and product strategy. Whether you're building products, leading teams, or leveling up your career, this summit delivers practical insights designed to move your team forward. Registration is open but spots are limited. Save your seat at pragmaticinstitute.com/lenny. That's pragmaticinstitute.com/lenny.

2. 4:23 – 6:47

   Matt’s background and transition to product management

   1. LRLenny Rachitsky4:23

      Matt, thank you so much for being here and welcome to the podcast.

   2. MLMatt LeMay4:29

      Thank you so much for having me. I'm really, really excited to be here.

   3. LRLenny Rachitsky4:32

      I'm even more excited. You have a really interesting background. I usually don't spend time on background but I thought this would be fun. Uh, I was looking at your LinkedIn and your background. The beginning of your career, you spent 13 years at Pitchfork-

   4. MLMatt LeMay4:44

      Yes.

   5. LRLenny Rachitsky4:44

      ... reviewing music, okay-

   6. MLMatt LeMay4:46

      Yes.

   7. LRLenny Rachitsky4:46

      ... reviewing artists. Pitchfork was, like, a massive deal. I don't know if, where it is today, but it was, like, the most influential music review site. Is it still a big deal or is it less of?

   8. MLMatt LeMay4:54

      It is still a big deal. It was-

   9. LRLenny Rachitsky4:56

      Okay. Okay, good.

   10. MLMatt LeMay4:56

       ... much less of a big deal when I started working for them and I was a-

   11. LRLenny Rachitsky4:59

       Oh.

   12. MLMatt LeMay4:59

       ... 16-year-old music nerd writing record reviews in my bedroom at my parents' apartment.

   13. LRLenny Rachitsky5:05

       Okay. So what I'm hearing is you helped make them a big deal. Excellent. That's impact, we're gonna talk, talk all about impact.

   14. MLMatt LeMay5:10

       There's, if I were better at telling my own story, that's exactly what I'd be saying is that before I started, I was product manager number one at Pitchfork.

   15. LRLenny Rachitsky5:17

       Yeah. Funny enough, like, you look at your resume, you, like, went into product management from Pitchfork. Very typical career path. By the way, if you're on YouTube watching, there's a lot of musical paraphernalia behind you, an awesome guitar. So clearly there's a, a thread of music throughout your background. Let me ask you this question.

   16. MLMatt LeMay5:32

       Yes.

   17. LRLenny Rachitsky5:32

       What is most similar about making music, critique, and, even critiquing music, uh, and building great product?

   18. MLMatt LeMay5:39

       The magic lies in the way people work together. That's really what I think has been the consistent thread between all the work that I've done. I, I spent years as a touring musician. I still occasionally tour in my friend Will Sheff's band. And it's that magic of people with different perspectives, different ideas, building into something that is somehow greater than the sum of its individual parts and perspectives. That's what makes this interesting. That's what makes music magical. That's what makes product development...... interesting, especially, you know, in the age of AI when people have the opportunity to, I think, close themselves off from the messier parts of human interaction, from those moments where you realize that your perspective might be limited, that somebody else might be able to expose you to something, show you a way of working, show you a way of seeing that you haven't seen before. I, I think that those interactions, that ability to learn from and build with each other is only going to become more valuable and, and more precious, frankly, as technology continues to do what technology does.

   19. LRLenny Rachitsky6:44

       Wow, what a beautiful answer.

   20. MLMatt LeMay6:46

       Thank you.

   21. LRLenny Rachitsky6:46

       I love that.

3. 6:47 – 12:00

   The goal of Matt's new book

   1. LRLenny Rachitsky6:48

      (laughs) Okay, so let's get to the task at hand.

   2. MLMatt LeMay6:50

      Yes.

   3. LRLenny Rachitsky6:50

      So you're known for writing one of the most popular books in the field of product management called Product Management in Practice.

   4. MLMatt LeMay6:58

      I suppose I am.

   5. LRLenny Rachitsky6:59

      Yes. Basically describes the job of a product manager very practically, very specifically, better than any other book out there. You have a new book out called Impact First Product Teams. Asked you what the goal of this book was, and you-

   6. MLMatt LeMay7:13

      Yeah.

   7. LRLenny Rachitsky7:13

      ... said the goal was, "What are the steps that individual product teams can take to align their work to business critical outcomes regardless of how their organizations approach product development?" And I thought this was a really nice way of framing this conversation. There's two important parts to the sentence that you gave me. One is aligning your work to business critical outcomes, and the other is steps an individual product team can take regardless of other business functions. So let me start with this first part. This is kind of the, the, m- you named your book after this concept of impact first. Why is aligning work to impact and to business critical outcomes so important?

   8. MLMatt LeMay7:51

      It's important because at the end of the day, it is those business critical outcomes against which you and your team will be evaluated. That's the reality of working for a business, right? If you are contributing to the business in a way that the business at large can understand, that the CEO can understand, that the CFO can understand, if your team is a good investment for the business, then the business will continue making that investment. If your team is not a good investment for the business or you don't really know if your team is a good investment for the business, but you figure you're showing up, so probably it's fine, you guess, then that puts you in a really tenuous position and a position that I think we've all seen not work out terribly well for everybody in recent history.

   9. LRLenny Rachitsky8:36

      And so what is this a reaction to? Because I imagine many people hearing this are like, "Of course, PMs, product teams, we're driving business impact. Well, that's why we're here." That's not actually the case in most cases. So first of all, just like-

   10. MLMatt LeMay8:46

       Yeah.

   11. LRLenny Rachitsky8:46

       ... what is this reaction to? Is this the reaction to people being like, "Oh, we're just gonna build great products. We're gonna listen to customers"? Talk about the, the flip side of this.

   12. MLMatt LeMay8:54

       I mean, there's a, a couple things. I, I think the main one is just more product managers and teams are getting laid off.

   13. LRLenny Rachitsky9:01

       Mm-hmm.

   14. MLMatt LeMay9:01

       That's a really scary reality right now. And if you look at the messages that are being conveyed by CEOs when they lay off these teams, it's, you know, you know, some of them are pretty clear. The message that Daniel Ek from Spotify sent out with their layoffs in 2024 said, "We still have too many teams doing work around the work and supporting work rather than focusing on opportunities with real impact." And that really struck a nerve because I've been on those supporting teams before. I've done the work around the work, and I've assumed that if I was given work around the work to do, that surely it must be critical to the business, otherwise they wouldn't have hired me to do it. I, I don't think that is a safe assumption to make. I think especially given that we are no longer in a zero interest rate environment, given that hiring and retaining employees ex- is, you know, expensive, given that companies are looking at cost savings, I think we are in a moment where it is really incumbent upon each product team and each member of each product team to be able to understand, articulate, and work towards the top line business impact of their own work.

   15. LRLenny Rachitsky10:12

       Awesome. Okay, so where this comes from is, one, uh, if you are not driving something that is directly driving business growth, you're not as valuable to the company. You're the kind of person that-

   16. MLMatt LeMay10:22

       Yeah.

   17. LRLenny Rachitsky10:22

       ... they'd lay off. There's also a flip side of finding a job. It feels like if you have shown impact in your resume, here's all the impact I've driven, this also helps you get hired. True?

   18. MLMatt LeMay10:31

       Absolutely. Yeah, I mean, I, I, it's the most common resume advice I see, right? Is like show the number, show the impact, say what you did. I, I have a friend who does resume coaching, and I showed her my resume a couple years ago. And she said, "I love your resume except for one thing. Why do you write like a little girl? Say what you did. Say what your contributions were. Don't say, 'I helped. I may have maybe helped people do this.' Say the impact, put the number on it." And I think I needed to hear that from her. (laughs) because, um, I, I think there is a tendency, especially for those of us who do really thrive in that collaborative environment, who, you know, our nature is to not want to take credit for work that could only exist via the contributions of many people with diverse experiences and perspectives. It's really hard to say like, "Well, I did this, and I contributed to that." But that's part of why I wrote this book at the team level, because I think for folks like myself who really enjoy and thrive in and enjoy that team environment, if you can look at the product team as the foundational unit of impact and say, "We delivered this. We were able to work together to have this impact for the business," that feels really good and also speaks directly to the work that that team did together.

   19. LRLenny Rachitsky11:48

       That's really interesting insight. I think a lot of this comes from just PMs naturally are trained to deflect, uh, credit and to include say we in everything and just this person-

   20. MLMatt LeMay11:57

       Yeah.

   21. LRLenny Rachitsky11:57

       ... did that. So I get where that comes from.

4. 12:00 – 15:32

   How to stress test your thinking as a PM

   1. LRLenny Rachitsky12:00

      Um, okay, so most listeners will probably still be thinking, "Yes, I'm driving impact. I'm great. Well, I don't have a problem here. I don't need to change, need to change anything." What are some ways to stress test your thinking, maybe some questions to ask yourself or maybe your team of just like, "Okay, maybe I'm not...

   2. MLMatt LeMay12:17

      So the first question I ask most of the teams I work with is, if you were the CEO of this company, would you fully fund your own team? And that is a small question that can provoke some big reactions. Because for me, when I was working as a product manager, I truly believed that my job was to find the next most defensible thing to build, build it, celebrate it, find the next most defensible thing to build, and so on and so forth. Rinse and repeat, forever and ever. I kind of assumed that the existence of my team was this righteous fact of the universe, right? My team would always be there for all time and it was just a matter of us finding the next thing to work on, which meant, you know, doing discovery and making concessions to what leadership wanted and doing all that stakeholder management. But the idea that my team came at a cost to the business, that at some point somebody might look at my team on a spreadsheet and say, "Who are these very expensive people? Why do we need them? Do we actually need them?" (laughs) Um, it just wasn't something that crossed my mind because I wasn't in the room for those conversations. That wasn't how I was thinking about my team's work. So, I- I like asking this question because it's a perspective shift. It gets you thinking, if you were personally accountable for the existential market level success of this business, would you invest in your team? And frankly, most of the people I ask that question to don't know the answer right away. They're not sure. They say, "I- I think so," or, "Yeah, yeah, yeah, you know, because..." And- and then you can see the gears turning. And again, to me, that is a- a risky situation to be in, because if you can't answer that question as a member of the team, nobody else in the organization is gonna be as well-equipped to answer that question as you are. So bringing that question to the team, asking it and answering it proactively and collaboratively, and being ready to say, "Okay, if we can't answer this confidently, what are the changes we need to make? Do we need to change our purview? Do we need to change our goals? Who do we need to talk to? What do we need to do in order to make this happen, in order to answer that question confidently?" We are much better off having that conversation at the team level than waiting for someone else to have it for us or at us.

   3. LRLenny Rachitsky14:50

      So is the, kind of the signal here is if you can't confidently say yes, asking yourself this question and your team talking through this and having a clear answer, there's maybe a potential problem that you need to work on?

   4. MLMatt LeMay15:01

      Absolutely. I think that's, uh, that's exactly it, yeah.

   5. LRLenny Rachitsky15:04

      Okay. And we'll talk about what to actually do and the steps you recommend to fix this problem, but I want to keep talking about impact, because sometimes it takes a while for people to be convinced, "Okay, I need to really do this," versus-

   6. MLMatt LeMay15:13

      Yeah.

   7. LRLenny Rachitsky15:13

      ... "Okay, here's the ways to do this."

   8. MLMatt LeMay15:14

      Yeah. It- it has taken me until n- until (laughs) writing this book to be convinced, and I still-

   9. LRLenny Rachitsky15:19

      Mm-hmm.

   10. MLMatt LeMay15:19

       ... feel like I need to be convinced a little bit sometimes. (laughs)

   11. LRLenny Rachitsky15:22

       Like, I think the layoffs are a really good convincing function for people-

   12. MLMatt LeMay15:25

       Yes.

   13. LRLenny Rachitsky15:26

       ... where they're seeing-

   14. MLMatt LeMay15:26

       Yes.

   15. LRLenny Rachitsky15:26

       ... all these PMs being laid off, and just like, "How do I avoid that?" And this is basically the answer to that, is here's how you avoid getting laid

5. 15:32 – 17:33

   Thinking like the CEO

   1. LRLenny Rachitsky15:32

      off. There's an interesting implication in what you described here, where you encourage the- the PM and the product team to think like the CEO. This touches on something I've been meaning to write about but I haven't, which is, a lot of people, there's this argument our PMs are the mini CEO. Like, in my mind, like, the PM is 100% the mini CEO in terms of they think like the CEO, or they should, within the team. Like, they are the same... They think about the business, their job is to think about the business like a CEO within the team. Uh, obviously they're not in charge of everyone, they can't let get anywhere, the dir- you know, reporting lines are not the same. But, uh, I feel like that's a really good lens for the job of a CEO, of- of a PM, is just you're like the mini CEO on the team making sure you're building the right things, thinking about the business, um, solving real problems that matter.

   2. MLMatt LeMay16:19

      I think the way I've come to think about it is that the product manager is responsible for the whole team thinking like a CEO, if that makes sense.

   3. LRLenny Rachitsky16:26

      Mm-hmm. I love that.

   4. MLMatt LeMay16:27

      So, if the product manager takes that on as their sole responsibility and says, "I'm the mini CEO, I think about the business," that's a missed opportunity. In my consulting work, it's more often than not been an engineer who's actually able to get to that specific impact level goal for the team, sometimes before the product manager does, because the engineer is- is thinking in systems, is thinking about, "Okay, I know this system, I know this other system. I've had this conversation with this person. I think I see how this can all fit together." Sometimes it's a designer or a UX researcher who understands what customers need and who has that direct, first-hand knowledge. So I think, you know, the- the way that I certainly initially misinterpreted the mini CEO thing was, you are solely in charge of this, as opposed to you are the person who brings that kind of CEO level commercial thinking to the team. And I- I've been much more inclined of late to see the product manager's job as to bring in and facilitate that conversation, rather than to be the sole owner of that conversation.

   5. LRLenny Rachitsky17:29

      That is a- is a really good, uh, nuance to what I said, uh, and it makes

6. 17:33 – 23:36

   The role of a product manager

   1. LRLenny Rachitsky17:33

      all the sense in the world. Following these lines of what is the job for a product manager, you have a really nice way of just thinking about it. What is- what is the role of a, what does a business expect from a product manager?

   2. MLMatt LeMay17:42

      Yeah. Um, you know, my- my favorite definition of- of product management comes from Melissa Perry's book, Escaping the Build Trap, where she describes product management as facilitating a value exchange, right? You're facilitating a value exchange between a business and its customers. The actual shape and nature of that value exchange depends on so many things, right? It depends on your funding model, it depends on your business model, it depends on whether you're B2B or B2C, it depends on whether you're publicly traded or privately held. There are so many different variables that go into what a business expects from product teams. And I- I, one thing I've- I've come to is that I- I am, you know, I'm probably too hesitant to generalize in general-... aside from that generalization I just made. But I think that the best product managers and teams I've worked with are really curious to understand what success means to their particular business. So if that's a startup, how much runway do we have? What do we need to raise that next round? Are our investors looking for growth? Are they looking for profitability? What are they looking for in order for us to reach that next existential milestone? And for a publicly traded company, what are investors looking for? What have we told shareholders? What's in our next prospectus? What are we saying we're gonna deliver to the market at large? This information usually exists somewhere, but it's really easy to get disconnected from it as we go about the day-to-day work of doing product management. I've been in a lot of rooms having workshops and sessions with teams I work with, where they're pulling up the last town hall meeting to look for slides from their CEO, because, you know, they're so busy, they have so many day-to-day things to deal with, that for them, that town hall day is like, "Okay, finally I can just not have to deal with people emailing me every 10 seconds." It's a chance to, like, take a deep breath and then get back to the stuff that really matters. But those top-level things, those promises that have been made to the market at large, to the board, to the shareholders, those are often a great place to start for understanding what exactly your business is looking for, so you can figure out how your team's work helps contribute to success in the terms that matter most to the business.

   3. LRLenny Rachitsky20:01

      That's an amazing segue to exactly where I wanted to go, which is, uh, this quote that is exactly what you just said. The question you should be asking is kind of a different version of the one you shared earlier, which is, "What are we doing to contribute to the success of the business?"

   4. MLMatt LeMay20:14

      Yeah.

   5. LRLenny Rachitsky20:15

      So, what is it that you think people are thinking instead most often?

   6. MLMatt LeMay20:20

      Hmm. It's interesting. We live in a world where, for the last 20 years of product development, we've been all about best practices. We love best practices. And I love best practices too. I think best practices can be really valuable, can be really useful. I love how much knowledge-sharing there is out there. When I started 15 years ago, it was so much harder to get any sense of how anybody was doing anything. But I think the downside of this is that there are a lot of folks who are really, really fixated on doing things the right way. And a lot of the writing and thinking about doing things the right way exists in kind of this middle layer between impact and day-to-day work, right? So if you have impact, the overall success of the business, revenue, growth, profits, then from there you set objectives, and you do initiatives, and then you do bets, and then you make a strategy, and then you do your day-to-day work. I think the tendency among a lot of product teams is to key to those middle pieces, to say, "Okay, what we're doing is on strategy. What we're doing is part of objectives. We did OKRs right. We- we set, you know, we spent three weeks coming up with our OKRs for three months. It's OKR season, everybody. We have to pretend to care about our goals. And I read a book that says we have to have five to seven objectives with five to seven key results, and we want the score of each one to be a .6 or a .7." And at the end of the day, you've actually spent so much time and energy being really clever and cascading these things into these intermediate steps that each step has incurred more and more risk that we might not achieve that impact we seek to drive. Each time we abstract things out, each time we cascade things from impact to something else until we wind up with a checklist of features to build, we're assuming that if we then build that checklist of features, dot, dot, dot, we will have a successful business. But honestly, most of the companies and teams I work with, if I ask them how their lowest level goals add up to their highest level goals, they look at me like I just asked them the most impossible question in the world. Because by the time you get things down to that level, maybe it's gonna work, maybe it's not gonna work. There are assumptions baked into each of those levels. You might go through the motions of doing OKRs the right way or doing strategy the right way, but that doesn't guarantee that your strategy is gonna work. It doesn't mean that your OKRs are going to add up to what your investors or your shareholders need to see. So, I think there's a tendency among product teams to really sweat the middle and to get really stressed out if the middle is not in perfect theoretical harmony with itself, if the objectives are a little out of line with the initiatives or a little out of line with the bets or a little out of line with the domains. But at the end of the day, I don't think I've ever worked for a company where these things add up to a perfect breadcrumb trail you can trace back from, "We prioritized these bits of work in this sprint because it adds up to this objective, which is part of this strategy, which adds up to this initiative, which is part of this bet, which will deliver this much impact." It's just not how things

7. 23:36 – 27:47

   The low-impact PM death spiral

   1. MLMatt LeMay23:36

      work in the real world.

   2. LRLenny Rachitsky23:37

      I feel like a lot of listeners are like, "That sounds very familiar," exactly what you just described. Again, we're gonna talk about what to change and what- how to make this work better to actually align your teams with impact. But-

   3. MLMatt LeMay23:48

      Yeah.

   4. LRLenny Rachitsky23:48

      ... I wanna first talk about something that kind of follows this thread you're on, which is-

   5. MLMatt LeMay23:51

      Yes.

   6. LRLenny Rachitsky23:51

      ... something you call the low-impact PM death spiral.

   7. MLMatt LeMay23:54

      Yes.

   8. LRLenny Rachitsky23:54

      Talk about what that looks like.

   9. MLMatt LeMay23:55

      The death spiral. Woo, woo, woo, woo.

   10. LRLenny Rachitsky23:56

       (laughs) I love the hands.

   11. MLMatt LeMay23:57

       Um...

   12. LRLenny Rachitsky23:58

       (laughs)

   13. MLMatt LeMay23:59

       The low-impact death spiral is the dynamic in which every medium to large company I've ever worked with finds itself in one way or another. And honestly, a lot of small product companies do as well. And it goes something like this. It starts with teams taking on low-impact work, adding little features here and there, making little cosmetic improvements because it's easier, it invites less scrutiny, and you're- you're less likely to mess up something important, right? The analogy I use sometimes is, if you're working on a car-If you put your hands in the engine, you might make the car run really well, or you might make it so that the car doesn't run at all. If you have the option of doing that, or like decking out the car with a paint job and rhinestones and making it look really, really cool, what are you gonna choose to do? I know for me, I would choose the rhinestones every time, right? Because then the car runs however it runs, whoever else is the expert in engines can fix the engine, but I'm gonna do this thing which everyone can see. All the executives can look at it and say, "Wow. Look at how cool this car looks." And it's not gonna do any harm, right? What's the worst that could happen? We can always take the paint off. The problem is, if you have 10 teams adding rhinestones to a car, eventually the hood of the car is gonna be so heavy that you can't lift it to get to the engine anymore, and that's exactly what happens in most product organizations. As you have more and more teams adding in these little features, making little enhancements, adding features which might get some usage, but you know, they're not gonna take away any- anything meaningful, they're not gonna mess with the commercial engine of the business, you have more folks building in and the hood of the car gets heavier and heavier. The product gets more and more complicated. You have all these little bits that have little dependencies on each other, and the product becomes, as I think most modern products are, a collection of loosely connected features rather than a single guided experience. What does that mean? That means internally, building anything becomes a lot harder, right? Because there's 10 product teams that have to manage dependencies whenever you wanna build something. So companies start adding program management layers, they're like, "We have too many meetings. We need to reorg for program management 'cause reorgs fix everything, and we need to make sure that we have all these layers and people are connected and we're doing dependency management." But as you add more of those things, it becomes harder and harder to do high impact work. The hood just gets heavier and heavier and heavier, which in turn sends teams deeper and deeper down the rabbit hole of low impact work. Low impact work begets low impact work. The more low impact work you do, the harder it is to do high impact work, the more likely you are to do low impact work and so on and so forth. It goes and goes and goes until the next round of layoffs, and this is a real problem. I've experienced this at, again, pretty much every company I've worked with, and it's been really interesting to see how often the breaking of that cycle comes down to individual product teams being brave enough to look at their own work and look at what matters to the business and say, "You know what? We are not going to incur the risk of being a low impact team anymore. We are going to proactively seek out high impact work and we're gonna deliver even if it means we have to coordinate with a lot of other teams, even if it means that suddenly the executive team takes a really big interest in the work that we're doing." We're gonna see that as signs that the work we're doing matters, not as things that are going to be an impediment to getting the work done.

8. 27:47 – 32:53

   Case study: Mailchimp’s transition to a platform company

   1. MLMatt LeMay27:47

   2. LRLenny Rachitsky27:47

      As you just kinda alluded to, there's a big implication here of even if you are told to build a thing that the execs are really excited about that is low impact in your opinion, that's no excuse. You're still-

   3. MLMatt LeMay27:57

      Yeah.

   4. LRLenny Rachitsky27:58

      ... gonna get fired eventually, even though they're like telling you to build it. It- it sucks.

   5. MLMatt LeMay28:02

      It's-

   6. LRLenny Rachitsky28:03

      But that's how it goes.

   7. MLMatt LeMay28:04

      And it's funny, I worked with Mailchimp for three years leading up to their acquisition by Intuit when they were on this really interesting journey of going from a single product company to a platform company, which is a journey that a lot of companies are on, right? Where they found success in one part of the market and they say, "You know what? We recognize that there's a value add in working more horizontally and giving people a suite of tools they can use. We wanna build these tools and really make sure that we are meeting the needs of our small and medium business customers." So I was brought on shortly after they did a reorg. They went into a domains model. They had different teams that were supposed to be experts on different parts of this marketing platform that were building in new features, and their VP product, Natalia Williams, who then became their CPO, you know, she said, "This is great that we're doing this, but I'm worried that we're gonna lose sight of the commercial fundamentals, right? We have these teams building this really cool stuff and we've been so clear that we're excited about the teams that are working on initiative, that are building these new things, that are building out this platform, but let's make sure we stay focused on- on making sure that the entire platform grows in a healthy and sustainable way, and that as we are adding in these new features and functionalities, we're not making this so crowded and complicated that it's harder for people to get value out of it." So she set a very clear goal for the product team. She wanted a specific change in the rate of users who successfully send their first email. She was like, "As we build these new things, email is still where people are coming in. We wanna make sure that they can do this successfully." And she set a really ambitious goal for the entire product organization and she put it forth to the product teams and a lot of product teams were understandably hesitant to take this on for a number of reasons, right? They said, "Well, this is like if we mess this up, that's the entire commercial heart of the business. Like, that's really risky." Other ones said, "Well, that's great, but you know, we- we're building out these new parts of the platform that are really important. We don't wanna risk slowing those things down." There was one product manager I worked with who really understood how important this was. She had worked on enough different parts of the app at that point. She had been on a growth team, so she really had that kind of user-centric how do we hit the metrics we need to hit mindset.And, and she came to me and she was like, "I wanna make sure we do this because I'm worried about what'll happen if we don't do this, right? I don't wanna be on the product team that failed to deliver what matters most to the business." So she went and worked with some user researchers and found where people were getting stuck. She did this amazing study finding where people were getting stuck before they sent that first email. And she gathered together a group of product managers. I'll never forget this, I was on site in Atlanta, and she gathered together a group of product managers and she was like, "Look, these are the things we need to fix if we're gonna hit this, but if we fix these things, I think we can do it. I think we can get there." And there was a moment of silence where, again, for totally understandable reasons, people were like, "Okay. You know, this is, this is great. I see it, but like I'm, I'm kind of afraid that if we do this..." And this product manager, I will never forget this, she looks around the room and she says, "You know what? I am going to haunt all of you in your dreams if you do not take this on. This is the most important thing for the business." And everyone laughed. It was a, it was a strong comment, but it was a strong comment made in really good faith that, in its own way I think, acknowledged the fear that people had about taking this on. She was like, "Look. This is really important, and if we work together, if we care less about the constraints and parameters and, you know, borders of our domains and care more about how we work together to deliver the thing that our leader has told us is the most important thing for the business, we can get this done." And they did get it done, and they got it done through subtracting. They streamlined the experience. They took out steps that people were getting stuck on. They made things easier. They did the kinds of things that are rarely celebrated in the way that traditional feature launches were celebrated, but because they had this clear, impactful, specific sense of what success looks like, they were able to take on that work themselves. And it made the product better, made the business better, um, and it was just a great moment of working with, with a great team.

   8. LRLenny Rachitsky32:48

      That was an awesome example. I love just how much of a hero's journey this, this example is.

9. 32:53 – 41:24

   Radical acceptance

   1. LRLenny Rachitsky32:54

      Along those lines, it's interesting how much courage it takes to do this, because to your point, the easy thing is just, okay, everyone's just telling us to do this thing, we're gonna build this feature. Great, easy. I don't have to put myself out there. And what you're pointing out there is, uh, it's up to you to recognize what you're doing is not high impact and to have courage to push back and suggest something else.

   2. MLMatt LeMay33:15

      The funny thing is, it's, it's courage, but it's also a kind of radical acceptance of reality. There's a very kind of emotional, philosophical dimension to this conversation, because I think it is in human nature to not want to be accountable for things outside of our control. Impact is not something we can just check off a list, right? If we're really working towards business impact, that means that there are things that might happen in the market that are going to affect us, right? Our competitors might launch something. There might be a pandemic or a war or something we didn't expect. We are reliant upon customers to, to change their behavior, to convert or to upgrade or to do whatever it is we hope they will do. I use the word hope because, again, we can do our best to influence that behavior, but we can't just check a box. And I think there is this very understandable human fear of being accountable for things that are beyond our control. I get that so hard. But what I, I think the last couple years have shown us is that we are accountable for things outside of our control. The success of the businesses we work for is ultimately beyond our immediate control, and you can follow all the best practices and have the highest velocity and do everything, quote unquote, "right," but if your company goes out of business, they're not gonna say, "Yeah, we're going out of business, but we're gonna keep, you know, writing your paycheck for two years because you... All of your OKRs were at point six or at point seven." That's not how it works. The reality is that things outside of our control affect us, and I think that if we can internalize that, there's a real freedom in it. You know, the, the thing that surprised me most when I was researching this book is that the commercially minded PMs I interviewed were also the happiest, which I did not expect at all. You know, as, as you said, I come from a music background. I was expecting the, the businesspeople to be really stressed out and like, "I have to show up at work 92 hours a day to crush it and make sure that we hit the metrics and, and, and crush the numbers." But they were just like, "Yeah, I work for a business and I do the best I can, and then I go home. You know? When I'm at work, my job is to help the business succeed, and I do that by understanding our business model, by trying to do work that contributes to what the business wants. In order to do that, if my goals are really impact level goals, I have to learn about our customers. I have to do discovery. I have to do all these things that we're supposed to do, not because they're abstract best practices, but because that's how you build a successful product. And then at the end of the day, you know, I'm not fighting my company to do product the right way, and if they can't do it the right way, I'll, I'll, you know, I'm willing to die on this hill. It's like, I work for a company. I don't get to make every decision. There are things outside of my control. I'll do the best I can, and I get to free up a little bit of energy to live the rest of my life.

   3. LRLenny Rachitsky36:12

      To make this even less scary hopefully, I'm curious what your answer's gonna be here, do you find that people who take this leap and push back and try to change the way their teams are thinking and what they take on, do you find that even if they fail, even if the impact wasn't there and the project fails, they are seen more favorably and their career ends up doing better, and they end up doing better even if the project fails?

   4. MLMatt LeMay36:36

      I hope so. You know, I'm always super... Again, it's outside of my control, right? I can't say like, if you do these things, then you will be looked favorably... You will be looked upon favorably by the people who manage you, because I don't know those people, and maybe they're not gonna react well. Maybe they're not actually, you know... People are not always rational, and these things don't always play out the way you hope they will.What I will say is there's a story in the book in Impact-First Product Teams about somebody who worked for a dating app, and they were given a project to work on which had a very specific ambitious revenue goal. And at a certain point, it became clear that they were probably not going to be able to hit this because of other things they needed to do. So, they went to the finance team and said, "Hey, we have to adjust this down." And the finance team said, "Yeah, of course you do. That makes sense. Let's adjust it down together." Would that conversation have played out the same way if they had not taken that step of saying proactively, "Based on what is happening in the broader world, in the market, in our product, we no longer believe we are on track to hit this, but we want to adjust so that the company at large can make better predictions and resource things accordingly"? I don't know, but I think, again, if you are embracing that mindset that there are things outside of your control and your job is to do what you can from where you sit to contribute to the success of the business, I think you're certainly doing so much more by telling the business honestly what you think is possible and what's going to happen as opposed to stepping back from it and saying like, "Oh, well, if we talk about it, we're gonna get in trouble and nobody's gonna believe us." And you know, that, just that simple withholding of information does its own kind of harm. So, I can't guarantee any kind of outcomes. I can say yes, this will be received with (laughs) uh, with, with, you know, with generosity and grace in all cases. But I, I think it's, it's the right thing to do.

   5. LRLenny Rachitsky38:29

      My sense is either you will be respected more highly because you are, you're kind of solving problems for people, eh, that, that, like higher-ups, that you're seeing things that they should be seeing. And you're right, and they're like, "Oh, wow. Matt's amazing. He saw all this stuff and changed..." Or you realize, "This is not the company for me. They are just not ... They don't value this. They just want me to ship this widget, and that's all they want from me. I don't know why, why w- w- wh- I could, I could do, I could do more somewhere else."

   6. MLMatt LeMay38:55

      I think you touched on something really important there, which is that when you understand the business model, you understand the real-world ethics and priorities of the company you work for, right? If you understand what the company is optimizing for, what they really care about, what trade-offs and sacrifices they're willing to make in order to achieve those goals, that tells you a lot more than the mission statement, which, you know, usually sounds great. But if you follow the money, if you follow the decision-making, sometimes it paints a different picture. And I think the more you can understand how the business model works, what that value exchange is, what value is being delivered, what value is being extracted, that, I think, puts you in a better position to decide, you know, if I were to help the company achieve success, do I feel good about that? Do I feel like this is a company that, if it achieves its goals, has made the world a better place or not? And the more you understand the business model, the better equipped you are to make those decisions with all the information available to you, I think.

   7. LRLenny Rachitsky40:04

      Mm. That's such an important point. Today's episode is brought to you by Anthropic, the team behind Claude. I use Claude at least ten times a day. I use it for researching my podcast guests, for brainstorming title ideas for both my podcast and my newsletter, for getting feedback on my writing, and all kinds of stuff. Just last week, I was preparing for an interview with a very fancy guest, and I had Claude tell me, "What are all the questions that other podcast hosts have asked this guest so that I don't ask them these questions?" How much time do you spend every week trying to synthesize all of your user research insights, support tickets, sales calls, experiment results, and competitive intel? Claude can handle incredibly complex multi-step work. You can throw 100-page strategy document at it and ask it for insights, or you can dump all your user research and ask it to find patterns. With Claude-4 and the new integrations, including Claude-4 Opus, the world's best coding model, you get voice conversations, advanced research capabilities, direct Google Workspace integration, and now MCP connections to your custom tools and data sources. Claude just becomes part of your workflow. If you wanna try it out, get started at claude.ai/lenny, and using this link, you get an incredible 50% off your first three months of the Pro plan. That's claude.ai/lenny.

10. 41:24 – 44:23

    Embracing constraints in product management

    1. LRLenny Rachitsky41:24

       Okay, so let's shift to talking about how to actually, what to do.

    2. MLMatt LeMay41:28

       Yeah.

    3. LRLenny Rachitsky41:28

       So, kind of this concept of actions you can take regardless of how your company operates. And that first part is really important, and, uh, something that I've seen you big on is, is you don't let people have an excuse for not pushing on this. And we've talked about this in other ways, but just maybe share more of just, like, you don't have an excuse no matter how your company operates to not, uh, think deeply about this and try to make change.

    4. MLMatt LeMay41:51

       Yeah, I mean, the reality is that most companies that product managers work at aren't big tech companies. And when I work with product teams at those companies, at insurance companies or at banks or at CPG companies, or I worked with a company a while ago that makes audio equipment, which was obviously really fun for me, the first thing they usually tell me is, "Well, you know, we can't do product the right way because we're a regulated industry," or, "Because we're B2B," or, "Because we have these quarterly earnings targets we need to hit." And that always makes me a little sad because yes, there's a way of looking at it where you can say, "All right, if these five famous companies do product management the right way, then anything that puts us in a different situation from those companies must mean that we're doing product management the wrong way," which is demoralizing and distressing and again, leads people to these kind of quixotic battles of like, "I have to turn a bank into a search engine, which is not gonna happen." But the other way of looking at it is that those constraints are how you do product management. Those are what guide you to the commercial decisions you should be making. If you're regulated, your competitors are regulated too. If you can really understand those constraints, figure out how to work well within them, that's a huge commercial advantage for your business. If you're B2B, I honestly prefer working with B2B companies in a lot of situations because they have such immediate access... to their customers, and they can understand the whole system of their customers and their users and how these things connect in a way that's really immediate and actionable. Similarly, if your company has quarterly financial targets to hit, congratulations, you know what the business really cares about. You don't have to go looking much farther than that. You don't necessarily need to cascade that 10 different levels into 45 OKRs if you can do work that you know feeds directly into what the company cares about the most. So, yes, these things are, are constraints, but they are the constraints that shape the work that we do. And if we embrace them as such, if we treat them as guides, not restrictions, if we say, like, we're working with, not against, the commercial realities of our business, then there's so much we can do. There's so much that product managers and product owners and project managers that everybody working on product at every organization can do if we, again, work with, not against, the realities of the companies we work for.

11. 44:23 – 49:38

    Steps to become an impact-first product team

    1. MLMatt LeMay44:23

    2. LRLenny Rachitsky44:23

       Okay. So I think that's really empowering. You're not saying, "You need to change the way product is built at your company. It's up to you. You're an ICPM, it's up to you. No excuses." W- what's a simple way to describe what you're actually saying? Which I think is gonna make people feel a lot better.

    3. MLMatt LeMay44:38

       What I'm actually saying is that the things you think you're fighting against are usually the things that are giving your work shape if you let them be.

    4. LRLenny Rachitsky44:50

       Awesome. Let's talk about... You, you have three steps.

    5. MLMatt LeMay44:53

       Yes.

    6. LRLenny Rachitsky44:53

       Three handy steps to become more of an impact for this product team. So let's talk through them.

    7. MLMatt LeMay44:58

       Yeah.

    8. LRLenny Rachitsky44:58

       What is step one?

    9. MLMatt LeMay44:59

       Yeah. So the first step, and, and I think the most important and where a lot of my work plays out, is in setting team goals close to company goals. No more than one step away from company goals. This idea comes from Christina Wodtke's book, Radical Focus. She had a great episode on your podcast-

    10. LRLenny Rachitsky45:18

        Mm-hmm.

    11. MLMatt LeMay45:19

        ... that I just rewatched, uh, for inspiration before I came on here.

    12. LRLenny Rachitsky45:22

        Nice move.

    13. MLMatt LeMay45:23

        Um, but, uh, in that book, she has this visual where she says that most companies approach cascading OKRs as kind of this multi-level, like at the top is company goals, then department goals, then big team goals, then small team goals, then smaller team goals, which leads to the very situation I described where you can't add those small team goals back up to the company goals. She has a visual that she compares that to, which is, like, the company goal as a center of gravity, and then every other team goal orbiting one level around it. And this blew my mind when I saw it for the first time, because whether you're doing OKRs or KPIs or North Star Metrics, whatever framework you're ostensibly using, if you use it well, it looks like that. I worked with a team a while ago that was a traditional feature team at a fintech company. They were the team that was kind of like the team I worked with at Mailchimp, kind of given new features to build to take this product and build it more into a multi-product platform. And the business would say, "Go build this." They'd build it, they'd celebrate. They'd say, "Go build this." They'd build it, they'd celebrate, and then the business said, "Okay, we're gonna do things a little bit differently now. Now we have this top line revenue target. We want to make this much more money next year, and we want you to tell us how you're gonna contribute to this." And this was a really challenging conversation for this team, because as much as people complain about being feature factories, again, it feels safer, right? There's more control over that. If you're told what to build, you have a lot more control over whether or not you build it than you do over whether or not it generates revenue. So we started having this conversation, you know, what, what framework should we use? How should we do this? And I, I, I was not asking very good questions. I was kind of panicking too, to be honest. And then I asked them, I was like, "Okay, why does this team exist?" Right? "Why do we h- why are we doing this at all? Like, why is the business investing in this big team to build all these features? Why do we care if we're a single product company or a multi-product platform company?" And one of the team leaders said, "Oh, well, actually, the customer lifetime value of a multi-product user is much higher than that of a single product user." And I was like, "Oh! Do we know how much higher?" And they said, "Yeah, we actually have a number on that." And I was like, "Wow! So, like, if we had a goal of converting a certain number of single product users to multi-product users, we know exactly how much revenue is on the line." They were like, "Yeah, I guess so." So we were able to set a goal, and from there, we had this conversation about, you know, what's the number we would need to hit to make this team feel like a good investment? And we came to a specific number, and that number informed every decision that was made by that team for the rest of the year. We said, "By the end of the year, we need to convert this many single product users to multi-product users, because if we do that, there's this much additional revenue which contributes this much to the company's top line revenue goal." It's one step away. And when they went and shared that goal with company leadership, they got it right away. They didn't have to say, "Well, why is this valuable?" They didn't have to say, "What are your other OKRs? Show us the deck." They got it, and that gave them so much leeway to make bolder decisions, to work more closely with other teams, to ask for the resources they needed. And that process of, of arriving at that goal, that goal that is impactful and specific and one step away from what the company cares about the most, is probably the, the most valuable way I have spent my time with teams of late. Because once you get to that, you see how everything else flows from there.

    14. LRLenny Rachitsky49:01

        And the implication here is that if it's too far away from helping, for people understanding what the hell are you guys even doing to help the business, that's the problem you want to avoid. So-

    15. MLMatt LeMay49:10

        Exactly.

    16. LRLenny Rachitsky49:11

        ... like, so one extreme is, uh, I don't know, like, it probably doesn't make sense for your team to have exactly the same goals as the company. Say your company's trying to...... and grow-

    17. MLMatt LeMay49:19

        Yeah.

    18. LRLenny Rachitsky49:19

        ... a hundred million revenue, right? Like, that's not gonna be your team's goal. So, it's almost like, at that extreme is what's one step away from that? What's your contribution to that company goal? The other end is just, like, some 10 level deep. We're gonna improve conversion of this random step, which is gonna grow this thing, which grows that, and then that grows revenue.

    19. MLMatt LeMay49:36

        Exactly.

12. 49:38 – 1:02:15

    Setting effective goals

    1. MLMatt LeMay49:38

    2. LRLenny Rachitsky49:38

       What is your guidance on revenue based goals as goals for teams?

    3. MLMatt LeMay49:43

       You know, I think, again, it depends. I, I know people have very strong opinions about teams should always or should never have revenue-based goals. I don't think it's that simple. I think sometimes, yes, if your company is working towards revenue, having a revenue-based goal makes sense, or at least being able to put some value in terms of revenue on the work that your team is doing. You know, I've worked with some startups where they actively are not going after revenue because right now the name of the game is growth, right? They want to show that they have enough users to raise that next round of investment. I actually worked with one startup where their revenue was going up and their number of users was going up, and we had to have a really interesting conversation around which one actually matters to our investors. And we kind of wound up developing these two scenarios, the high growth scenario and the low growth scenario. And talking to the product team, it was really clear that there was, like, no way they were gonna hit the high growth scenario, so they pivoted to focus on profitability so they could build more runway and raise that next round as a smaller business with a sustainable revenue base. So, I get why people are hesitant to commit to revenue goals. I think that there are certainly situations where revenue goals would be too broad or not exactly what the business needs. But at the end of the day, money is how the impact of most teams is going to be measured, and if you don't have a point of view on why your team is a good investment, either in the money return it brings or in another return that is equally or more important to the business, then again, that feels like a tenuous and risky position to be in.

    4. LRLenny Rachitsky51:25

       To kind of get people's brains noodling in the right direction, what are some examples of good goals, like specific goals that your teams have set that are one step away from a company goal? What are just some examples without naming companies?

    5. MLMatt LeMay51:38

       I have a, a story to tell to that effect, which also sets up the second step here, which is to keep impact first at every step. So, I worked with a growth team at a, a, a tech company that, that is beloved by many people, and I was brought on to help them set OKRs, right? The company was doing OKRs across the board, and this team was going to set its growth OKRs. So, they had done a lot of reading, a lot of research into how to do OKRs the right way. They had read... unfortunately, they had not read Radical Focus, um, or they, hopefully, would've done things differently. They had read a lot of other books, they had printed out a lot of articles and they said, "You know, we're gonna make sure we get this right. We're gonna put together a slide deck that has five to seven objectives, with five to seven key results each, and each key result is gonna have an owner, and we're gonna make sure that people are accountable for it, and we're gonna really, really do this the right way. We're gonna get that middle piece perfect." So, they spent a long time working on these OKRs. OKR season ends, they file away the OKR deck, not to be seen until the next OKR season. We reconvene and spend a whole day scoring all of the OKRs, right? And there are heated conversations about, "What's a 0.6 versus a 0.7? Is this a 0.9? Who really should be the owner of this key result? Who contributed the most to it?" And, um, you know, we, we get through this whole conversation, everyone's tired and, and I'm like, "I, I... there's just one question I need to ask. I'm so sorry to do this to y'all, but how does this all add up to the company level growth goals?" People kind of look around and they're like, "Well, that... that wasn't what we did. Like, we set our team level OKRs and we went through the process and we made sure and, and we, we followed the OKRs, we thought about the OKRs." And I said, "Yeah, but the, the company has a, a goal of, let's call it bringing on a million new users in this year. We're a growth team. How many users did we bring on?" And th- there's a moment of silence, and the leader of this team, who's a really, really good leader, she stands up and she's like, "Okay, we're gonna do things differently." She steps up to the whiteboard, puts 1 million on the right end of the whiteboard, draws a line, said, "This is the year." Draws a little tick on the line. "This is where we are now. It's a smaller number than a million. This is where we need to get to. If our conversation doesn't start with this, I don't want to have the conversation. And if you are 51% sure that a different approach is gonna get us 1% closer, I expect you to advocate for that approach. And this is now how we are going to do everything." I think about that all the time because it's subtracting steps, right? It's making things less complicated. It actually is doing exactly what you described. It's saying like, "This is what the company cares about. We're the growth team. We need to figure out how everything we're doing contributes to this." And that story really stuck with me because it seems like it should be obvious, right? If you're the growth team at a company with a growth goal, obviously that's gonna be something you care about. But it's so easy in the day-to-day work of setting these intermediate goals, of doing strategy, of doing the things we do to make things just a little bit more complicated than they need to be. So, for this particular team and this particular moment, a good goal was looking at the company level goal and saying, "If we're the team that's driving growth-... we're accountable for this. We're going to step up and we're going to do everything we can to make sure the company meets its ambition.

    6. LRLenny Rachitsky55:37

       And it's so obvious, you know, if you're, if you come at it from the perspective you shared earlier, if you're the CEO, well, A, would you fund this team? Like, if you see our goal is a million users, this team will drive us 100 thousand users, assuming that's a lot for you, like, obviously we want that team to do great and we're going to give them the resources to do that, 'cause we, they're going to contribute meaningfully to the score. Like, it's very obvious as you see it. Uh, the trick is, a lot of people think they are doing that, and they're not. One, maybe one heuristic I think about as you're talking is just, like, how do you know if you're doing this is there should be a very simple spreadsheet formula of just here's the company goal, here's your goal. There should be, like, one simple-

    7. MLMatt LeMay56:17

       Yep.

    8. LRLenny Rachitsky56:17

       ... formula that translates up, that adds to it.

    9. MLMatt LeMay56:20

       One why statement and/or one mathematical operator is usually the way I think about it.

    10. LRLenny Rachitsky56:24

        Mm-hmm. There we go.

    11. MLMatt LeMay56:25

        Um, in some cases, like, the story I told about that fintech company, it's something like upgraded users, that's one step, right? You multiply that by the increased customer lifetime value. In some cases, it's a smaller unit of the same thing, so it's a subset of the revenue or growth that the company is trying to deliver. I worked with a company recently that had a team rebuilding their ad tech platform. This is a big company that does a lot of different things, and at the heart of all of their different offerings is this ad tech platform. And I was brought on to do a day-long workshop with this company because this was a really important team, and they were struggling to figure out what success looked like. So, I said, "Okay, what are your goals?" And they said, "Here is the deck with our goals." And I said, "That's a lot of goals. I- I wouldn't be able to make decisions with those goals." And they said, "Oh, wait, wait, wait, no, we also have a Miro board 'cause we went through this and we decided the deck was too much, so we also have a Miro board." But as Miro boards tend to do, it kind of grew and grew and grew in all directions, so now it's a big Miro board. Turned out they had two Miro boards 'cause they tried to do this twice. So, we sat down and we did this really interesting kind of subtractive exercise where everybody got a Post-It note to write down what they think the most important goal of the team is. And then they would pair up and they would have to make it smaller each time, make it more concise. If there were two things, get it down to one thing. If there were 10 words, bring it down to eight words. Make it smaller and more concise each time. And we came up with two options. One was, you know, build a fantastic, wonderful, magical, beautiful platform to increase our team's profits by 20%. Fair enough. The other one was build a stupendous, wonderful, fantastic platform to increase our team's profits in the next financial year from 20 million pounds to 100 million pounds. And I'm looking at these and I'm like, okay, so we, we know that there is an expectation of revenue here, right? There's an expectation that we will drive profitability. But one of these is 20% and the other is 500%. Where do these numbers come from? And, you know, the, the folks who had said 20%, they were like, "That, that feels like a good return," right? And what's interesting was, you know, when I was telling this story o- when I was giving some talks recently, and people would kind of laugh, like, "Oh, they named the wrong number," but, like, they were so brave to do that. And them saying 20% is what actually unlocked the conversation at the team level, because somebody else in the room heard that and said, "Wait, I do remember something about profits. There was some target we were supposed to hit, but I think I remember it being a lot bigger than that." And they actually went back and found a town hall that their VP had given and buried in a slide in that town hall was this 100 million pound profit target by the end of the next financial year. So, they have this number and they start to go, like, "Oh, gosh, that's a lot," like, but, you know, "it's a whole financial year, it'll be fine." And we do, again, inspired by that leader I work with, I just put this out on a whiteboard, I'm like, "All right, 100 million in profits by the end of the next financial year. Right now, we're here. What else should be on this timeline?" Somebody said, "Well, we're launching this in October." So, I put October up there. I go, "Okay, so if we don't ship anything until October, and right now it's March, how much profit do we make until then?" And they said, "About 10 million." I'm like, "Okay, so, so that means that between October and March, we need to generate n- 90 million pounds of profits." And this team, I was worried that they were gonna freak out or they were gonna be like, "Oh, we can't do this, it's impossible," but they, they were like, "Okay, it's time to step up. It's time to do all these things that we need to do. We need to ship sooner. We need to do more validation. We need to do more testing. Can we commercialize things sooner? Can we do more discovery to make sure that this is really gonna have the impact we need it to have? Why are we doing this whole big relaunch? Why don't we rebuild individual things? What impact would we have if we brought more people in top of funnel now? Can we begin building our user base and then upgrade that user base? What are the trade-offs if we do that versus if we bring people in?" All those things that, that I think is, is really the, the heart and the intent of these best practices, they came to life because this team had clarity. They understood, like, okay, we are accountable for something which is specific enough to drive some real urgency and which is impactful enough that we have to get out there and do all these things that we're supposed to do. So, you know, that, to me, is a, a really good example of how, if you start with this question of, like, well, what is, what's expected of this team, what does success look like for us, it'll often lead you to kind of the right kind of neighborhood of what kind of unit of measure you wanna look for, how the business is gonna look to you, whether they're looking directly at revenue, whether they're looking at something else.

    12. LRLenny Rachitsky1:01:29

        Okay. These stories are awesome. So basically, so far, the two steps, uh, that you've illustrated here, of doing this correctly. Step one is set team's goal. Set team goals that are close to company goals. And then step two is do this at every step of the product-building process. It's not just a one-time thing at the beginning.

    13. MLMatt LeMay1:01:46

        Right. As you're doing OKRs, like that team I talked about, you know, when you're thinking about your company strategy, when you're writing epics, whatever it is, keep that impactful goal top of mind. Don't let it slip away. Don't let it get cascaded into oblivion.

    14. LRLenny Rachitsky1:02:02

        Because, to your point, the examples you shared where you think you're ... Like, you're just like, "Cool, we have our goal. Let's go," and then you spend months doing this thing, and then you forget, okay, this actually got disconnected from the company goal, and-

    15. MLMatt LeMay1:02:12

        Exactly.

    16. LRLenny Rachitsky1:02:12

        ... everything you've worked hard to do is just so no one cares.

13. 1:02:15 – 1:07:58

    Prioritization and impact estimation

    1. LRLenny Rachitsky1:02:15

    2. MLMatt LeMay1:02:15

       Yeah.

    3. LRLenny Rachitsky1:02:16

       Okay. Uh, what is step three?

    4. MLMatt LeMay1:02:18

       Step three is to connect every bit of work back to impact.

    5. LRLenny Rachitsky1:02:23

       Mm-hmm.

    6. MLMatt LeMay1:02:23

       So this is when we get to the prioritization piece, right? So impact estimation is something that is written about quite well, quite extensively in product management stuff. But it's something that it's easy to not do. (laughs) Um, you know, I work with a lot of teams that wanna know, again, the right best practice for doing prioritization, whether that's, you know, should we use ICE or RICE or Moscow or whatever it is. What's the right way to do prioritization? And you know, a- again, like it depends, but if you don't have a clear and specific sense of what impact means, you can't really prioritize effectively. So this is where, again, everything comes back to that first step of the way you set goals. So that team I told you about that had the goal of converting single product users to multi-product users, one of the product managers on that team came back to me a few months later and said, "Hey, Matt, I could really use your help figuring out how to do prioritization. Should we do ICE? Should we do RICE? Should we do Moscow? I- I put together an ICE matrix where I scored impact and I scored certainty and I scored effort, and I multiplied each one by each one, and I have a list of the things we should do." And I said, "That's awesome," and, and I do really think it's awesome when people take the initiative to do the thing, to say like, "I put this together. Let's walk through it." So when they showed me this, you know, I said, "Let's start with impact." And they're like, "Okay. Well, here's the score for each one." And I was like, "How do you ... What's the score?" They're like, "Oh, you know, it's a lot of different things." And I said, "Okay, well, we have a team goal of a certain specific number of users we need to convert by the end of the year. So let's try to express impact as a function of that goal. So rather than an abstract score, what is the most number of users we could convert in each of these different scenarios?" And understandably, they were kind of like, "Well, I, I ... You know what? I don't know exactly. Like it, it might not like-" "Let's just, let's just work through it. We don't have to be precise, right?" It's called impact estimation, not impact getting perfect number. So you know, for one of them, they were like, "Well, we can do this landing page." I'm like, "Okay. Well, how many people hit the landing page?" And they were like, "Mm, not that many, like maybe a few hundred." I'm like, "Okay, cool. So that's maybe a few hundred." And, and there was one thing which they were really reluctant. It had a, uh, high effort score and a medium certainty score, and what they basically said was like, "Look, if we really wanted to do this, we could redesign the entire onboarding experience, right? We could make it so that rather than us trying to like retroactively shuttle people into multi-product usage, we can understand them right when they join and get them into the right category of user right away." I'm like, "That sounds amazing. What's the most impact that could have?" They were like, "It would get us all the way there if we did it right, but we'd have to work with these other teams and we'd have to work with marketing, and there are so many dependencies and so many things outside of our control that we don't know if we could do it." I'm like, and I said, "Th- that's okay. Like these are the trade-offs we make as product managers. You will have some things to work on that are gonna have less impact but might be easier and more certain to deliver. But if this thing could get us all the way there, if it's really the only thing we're looking at which has really any chance of getting us to our goal, which remember, we came up with to answer the question, what does this team need to deliver to be a good investment for the business, then I, I think it's, it's worth going for it. It's worth having those conversations with other product teams. It's worth talking to folks in marketing. It's worth, you know, stretching ourselves a little bit and saying, 'This is gonna be challenging to do, but if we can do it, we can really deliver o- on something which we're gonna feel great about.'" So you know, the, the way that that third step manifests itself the most frequently tactically is, are we estimating and measuring impact in the same unit of measure as our goals? Because if we're doing that, then we're keeping ourselves honest and we're saying, "Does this actually have a chance of contributing?" Whereas, again, if we get really clever and we come up with a proprietary scoring system and all these little intermediate steps, we can feel like we're doing really awesome work and being very, very terribly smart, but we, again, run the risk that we are going to lose our connection with why we're setting about to do this work in the first place.

    7. LRLenny Rachitsky1:06:51

       Such an important and s- often easily overlooked point, this (laughs) idea that when you're doing RICE or whatever version of ICE that you do, that impact should be based on impact to your goal, which is one level removed from the company goal. Such ... Like it feels so obvious as you talk about it, and I hope most people know this, but I feel like that's something people forget. Just like, what is impact? Oh, yeah. Customers will be happier.

    8. MLMatt LeMay1:07:16

       Again, this is not easy work, right? Working in product means that we have so many different perspectives, so many different folks who have so many different priorities. You know, the, the stakeholder management piece of this is relentless and exhausting, and it's really, really easy to lose sight of this stuff, and it takes...... work and discipline, and, and as you said, bravery to keep bringing it back. But, uh, I, I think, again, it is not only the right thing to do, but it, it helps you, at the end of the day, have a little bit more of a, a, a boundary between the work you're doing at your job and the stuff you're good at in your life.

14. 1:07:58 – 1:12:35

    Navigating stakeholder management

    1. MLMatt LeMay1:07:58

    2. LRLenny Rachitsky1:07:58

       Mm-hmm. Speaking of boundaries, a lot of the advice you share will involve people saying no and pushing back and convincing people they're wrong, which is very hard. That's not a natural, uh, happy place for most people.

    3. MLMatt LeMay1:08:12

       Nope.

    4. LRLenny Rachitsky1:08:13

       (laughs) What advice do you have? What have you learned works well for pushing back, helping people see how they're not, uh, what they want you to build is wrong?

    5. MLMatt LeMay1:08:24

       Yeah, so this is where I have the, uh, the benefit, I suppose, of being a conflict-averse people pleaser. (laughs) So I've been, uh, I've been through this, and I think the thing I am proudest of saying in product management in practice is that if you're doing product management really well, you never have to say yes, and you never have to say no. You're giving people options, and you're helping them understand the trade-offs. So in keeping with this idea that there are things outside of your control, you know, as a product manager, you're not always gonna be the one who makes the decision. There are gonna be other people who come to you and say, "Build this," or who say, "I don't see the value in that. Do this. Do that. I want this. I want that." You know, if those people are in a position of formal authority in the organization, I've certainly never had luck telling them no. Furthermore, I've found myself in situations where they just know things that I don't know, where they're pursuing an acquisition, so there are certain things that we have to do or can't do, where, you know, there's some serious financial challenge that they're working their way through right now, which is shifting around priorities, but they are not at liberty to discuss that with the broader organization. It is quite possible that the folks who are asking you to do things that don't make sense have access to information that you don't, and that in trying to convince them otherwise, you are not only going to fail, but you are going to lose some of that trust and degrade that relationship that could, in time, be really important for you. So I think the challenge is to say, like, "All right, you want me to build this thing? Maybe. Let's look at the different things." If you're going through these steps, if you say, like, "You know, I understand. Here's what our team's goals are. Here's the stuff we're prioritizing. Here's the impact we think it could have. If you're coming to me with something which is gonna have more impact, heck yeah, I would love to build that. That sounds amazing. But if it has an unclear impact, or if it doesn't tie into this, then we might need to adjust the impact we're seeking to have, right?" If this is suddenly really important, as with that story that was told in the book, right, sometimes it's like, "All right, we gotta do this. Sure. That means that our impact projection is gonna have to be adjusted this much." You're not saying no, you're not saying yes. You're helping someone who is in a position to make a decision understand the trade-offs that go into that decision. And again, if you can do that, you're gonna go home at the end of the day feeling better. You're gonna feel less like you lost a battle or that you were, you know, overridden by an unjust tyrant, and it's gonna be more like, "Okay, I made sure they had all the information I would wanna have if I were making that decision. That decision is ultimately theirs to make, and I'm gonna do the best I can."

    6. LRLenny Rachitsky1:11:19

       Tell me if you disagree. In my experience, you also want to recommend a path, because a lot of people don't want PMs just, "Here's all the options. I have no opinion, no bias of any kind. You decide." Um, I find that people want you to have a perspective.

    7. MLMatt LeMay1:11:33

       Absolutely. Options and a recommendation is kind of the magic, the magic formula. I did, when I was working with Mailchimp, we actually did a workshop with, with all the product managers at the company, where we had people, like, role play trying to sell in a single option versus multiple options with a recommendation, and it was amazing how when you present a single option, people's instinct is just to, like, "Well, I don't know." Like, you start poking holes in it, not because you're a jerk, but because you're looking at one thing and you're like, "Oh, well, what about this? What about that?" Again, all of your own anxieties and, and fears and the things that you don't feel represented in there, and where, where you're worried, "What if this happens? What if that happens?" All of that kind of detracts, uh, from the momentum. Whereas if you come in and say, "Here are three options, here are the trade-offs, here's the one we recommend," then every little bit of back and forth makes those options clearer and stronger.

    8. LRLenny Rachitsky1:12:29

       Uh, I'm, I feel like people might miss that nuance in the way we talked about it, so I think that's a really important point to make there.

15. 1:12:35 – 1:16:36

    Summarizing the 3 steps

    1. LRLenny Rachitsky1:12:35

       Let me come back to the three steps, just for folks that are just like, "Cool, I'm excited. I'm motivated. I'm gonna change the way we operate." Uh, I'll summarize real quick. So step one is set team goals close to company goals. Step two is keep impact first at every step, don't forget, as you're building throughout the year.

    2. MLMatt LeMay1:12:53

       (laughs)

    3. LRLenny Rachitsky1:12:53

       And then step three is connect every bit of work back to impact.

    4. MLMatt LeMay1:12:57

       Yeah.

    5. LRLenny Rachitsky1:12:59

       I think, again, it's important to remind people, this may be hard and annoying and maybe things are going fine. Everyone's telling you what to build, you're building it, shipping it. Things are, it seems to be going all right. I think an important part of this is just, like, uh, if you believe what you're building is not helping the business grow and succeed, either they'll let you go someday because you're not doing something that matters, or the business will not work out and you'll be in trouble. So it's like even if you don't want to do this, something, like there's, you need to really seriously think about this, even though it's really hard.

    6. MLMatt LeMay1:13:36

       Yeah.

    7. LRLenny Rachitsky1:13:37

       But, uh, maybe let me just think on that a little bit. Say the business is doing great. Everything is great. CEO is telling you all the things to build, that sales guys and girls are just like, "Here, ship these features, everything's great." And everything's working, business is growing. What thoughts there? Just like, is it just, "Nah, leave it alone." Or is your sense, "Okay, most often this will not last, and you should really start to work on these skills."

    8. MLMatt LeMay1:13:56

       You know, it's funny. The teams I've worked with when things are going well are sometimes just as anxious as the teams I've worked with when things are going poorly because they have a hard time attributing success to what they're doing, right? They'll look at it and they'll say, "Yeah, we're doing great, but I think that honestly has more to do with marketing than it does with us." Or, "Yeah, we're doing great, but we're just in the right place at the right time. Our, our business is doing really well, or our sector's doing really well. We're just growing along with everyone else who's growing." And I, I think as with most things, if you approach it with curiosity, there's a lot to learn from it. So if you look at it and you say, "Yeah, we can't necessarily take sole credit for this, but marketing's doing awesome, let's talk to them. What are they doing? Why is this going so well? What have they learned from this that we can work with them more closely?" If your sector's just doing really well, be like, "Okay, well what about this is, is working right now? What might change in the future? How can we understand this?" So I think the challenge when things are going well is to, is to keep that curiosity going, and to keep celebrating the things not just that your team is doing, but that everyone is doing. And to take that time where you have a little bit more leeway, where there's less pressure on you in the moment, to build those connections with other parts of the organization to see where that really good work is happening. Um, you know, uh, one thing that, that makes me sad is when teams look upon each other with envy and disgust, right? When it's like, "This team's doing... Like they're doing great work, but they're not held to the same standards that we are and it's not fair. And, you know, they're the team that everyone likes." And it's like, "Go t- go talk to them because there's probably something you can learn from them." And if they're the team that's getting positive attention, that's doing meaningful work, there's probably a reason for that. And if you can understand that reason and you can align your work with that team's work, that's probably gonna be really good for you. So again, I, I think in a lot of cases, i- it comes back down to that control thing, right? If we can't feel a sense of control over things are going well because we did this, we tend to disconnect ourselves from things going well and say like, "Well, I can't..." Like, it almost feels dangerous to engage with it because what if we didn't do anything but good things are still happening? And I think just keeping that openness, keeping that curiosity going puts you in a much better position for when things inevitably begin to either plateau or decline, which is the cyclical nature of all things.

    9. LRLenny Rachitsky1:16:34

       Mm. Wow. Profound there.

16. 1:16:36 – 1:17:40

    Lightning round and final thoughts

    1. LRLenny Rachitsky1:16:36

       Maybe to start to wrap up our conversation, what's, what's maybe one question from the book or even from this conversation that you think product leaders, product teams should ask themselves to help them solve problems that maybe they're not seeing and to help their team operate better?

    2. MLMatt LeMay1:16:53

       I mean, I, I, I love the, "Would you fund this team if you were the CEO?" question. I know that that can feel a little confrontational (laughs) sometimes. So a, a gentler way of bringing that up is to say, "What's one sentence you'd wanna be able to say at the end of this year that would leave you feeling awesome about this team's work?" Like, what's something... You know, at the end of the year, everything went really well for this team. You run into the CEO in the hallway and you say, "I feel awesome because we did this." And, and you'll sometimes get very different answers from different people on the team. Building on those answers, saying like, "Okay, this is what you care about, this is what I care about, this is what I'm worried about, this is what I'm excited about," that's how you get that magical people in a room building together or, or musicians in, in a room writing their next song, right?

Episode duration: 1:32:08