Chris LoSacco: Maybe this is where crypto fits in in our analogy, I don't know. (Laughs) But it's like...

Gina Trapani: (Laughing) It's, a... Those are tough waters. But yeah.

Chris: I know. That's a...

Gina: A riskier investment, let's say.

(CATALYST INTRO MUSIC)

Gina: Hello and welcome to Catalyst, the Launch by NTT Data podcast. I'm Gina Trapani, I lead the product practice here at Launch, and as always, I'm joined by my business partner, Chris LoSacco. Hey, Chris.

Chris: Hey, Gina.

Gina: How's it going?

Chris: It's going great. We are going to talk about product and finance, two of our favorite topics. (Laughs)

Gina: Product and finance. (Laughs) It's true! And it's funny, because I find that a lot of my job is coaching finance people to think more like product and coaching product people to think more like finance.

Chris: Exactly.

Gina: So, so it's really...

Chris: Right. We're just trying to push both sides more towards the center, right?

Gina: Together. Because I gotta tell you, a finance-informed product leader is a good product leader.

Chris: And a product-informed finance person...

Gina: Oh, that's good stuff!

Chris: ...Is a great leader also.

Gina: Yes, truly. I mean, this is what we really, truly want to talk about today. You know, a few episodes ago - it's been several months now - I had the opportunity to interview Jeffrey Moore, who's the author of Zone to Win.

Chris: Zone to Win. Yep.

Gina: Great conversation.

Chris: Brilliant guy.

Gina: Dense conversation. He... Brilliant guy. He said so many things. It was a tough interview because everything that he said, I wanted to go like 15 different ways with it.

Chris: Right.

Gina: Because there was so much to unpack there. Something that he said really stuck with me, and it's something that I've heard in different contexts, which is this idea that when you... When you look at your business, right? You've got, like... You can look at it like a portfolio.

Chris: Okay.

Gina: Like, you've got the stocks and you've got the bonds.

Chris: Mhm.

Gina: The bonds being kind of like, if you think about this from a personal finance lens, if you're putting together your investment portfolio, right? You have, the bonds are like, low-risk, reliable dividend generators, right? Like, kind of like the ballast in your boat, right? Like, when things get a little crazy out there, it keeps a smooth and steady ride, right?

Chris: Not going to give you a huge return. You're not going to see a big pop from a bond that you bought.

Gina: Never.

Chris: But it's steady. You can rely on it. You know you're going to get the, you know, the payments that are coming off of it as long as you hold the bond or when the, you know, until the bond matures, it's like, you've got that bedrock as part of your portfolio, right?

Gina: That's right. And on the other hand, you've got stocks, right? These are the high-risk, high-reward, potentially high-growth. Also potentially deep, depressing failures. (Laughs) Right?

Chris: (Laughs) You just don't know.

Gina: You just don't know, right? And I mean, stocks, I mean, when you think about it from personal finance the stocks are like, the hedge against inflation. Like, these are the things that are going to make your portfolio perform beyond inflation and beyond bonds, right? Like, these are, this is the growth engine. But they're long-term, right? Like, when you buy stocks, and personally I would recommend total market funds versus individual stocks, but we can have that conversation separately. But like, even if you look at the total market, like the S&P, like, that's a long-term investment.

Chris: Yes.

Gina: It goes up in the long term. But in the short term, quarter to quarter? (Whistles) Wild ride.

Chris: Gonna look like a sine wave. You got up and down and up and down. Yep.

Gina: And I love the idea of looking at your business in this way. And I think as a product leader, even looking at your product portfolio this way, right? Because you're gonna have those just reliable, dependable table stakes.

Chris: Yes.

Gina: Things that work, and that your customers and your users and your stakeholders need to get stuff done. And then there are those, you know, new, new things that you're going to try out. And maybe some of them pop. Probably most of them fail, right?

‍Chris: Right.

Gina: But it's that hedge against being left behind.

Chris: Yes.

Gina: That constant sort of experimentation and innovation.

Chris: What I think is powerful about this is that so many people agree, like, oh, we have to be innovative. Oh, we have to try things. But putting that into practice means you actually have to be willing to take on the risk and realize that a lot of the things that you try are not going to work out, right? If you take the analogy even further, right, there's a different kind of investment... I mean, I guess you could hold a direct equity, right? But you could also make a venture capital investment. You could say, I'm going to put, you know, money into a company that is being formed. And I know that there is a chance, probably a strong chance, that it just doesn't work at all, right?

Gina: Right.

Chris: And the business fails, and I lost, I've lost that money. But sometimes you hit. And sometimes the returns are massive because you stumble on something that really finds its market, finds its need, and is wildly successful. And the same thing kind of goes with looking across a digital platform and thinking about a suite of products that you are offering. Some of your bets - not many, right? - most of your bets should be some mix of stocks and bonds. Right? 

Gina: That's right.

Chris: So, things that are secure, maybe some, a little bit of risk where you're trying some new things. And then sometimes, with a very small percentage of your portfolio, your energy, you need to take a big risk. You need to try things. And know that it's not going to make or break you, right? It's not going to be... You're not going to bet the farm on an early stage investment, much in the same way that you wouldn't put all of your money into a very risky pre-launch startup.

Gina: That's right.

Chris: You would be smart about how you're allocating your funds across all the things you do. The same thing applies when you're thinking about a platform, right? A product portfolio. 

Gina: Venture capital, the whole way it works, right? They invest in, you know, 100 companies, and maybe... five? (Laughs) Have some sort of a...

Chris: Right!

Gina: Like, it's a very, very low hit ratio. But those five are so, you know, the returns can be so massive that it pays for the rest of the portfolio, essentially, right?

Chris: Exactly.

Gina: And, like, you know, that's a particular mindset, right? So, you know, for the folks who want to try those growth engines, try those things that are likely to fail but might hit big, right? There's a different profile of leader. There's got to be a different horizon. You're looking at a much, like, longer horizon.

Chris: Yes.

Gina: And with the understanding that trying and failing is progress. Like, that's the machine working.

Chris: Exactly.

Gina: Actually. If you have a value investor versus the growth investor, right? You've got a value investor, they don't have the stomach for that. Someone in retirement, right? At 65, is... Their portfolio is going to be mostly bonds.

Chris: Right.

Gina: They need to... Because they're living off that income.

Chris: Right. They want stability. Absolutely.

Gina: That's right. Early in your life, when you've got mostly stocks, you gotta look at the next 20, 30 years, right? So it's a different view. You know, quick diversion, like... I... (Laughs) I saw somebody write this thing about how, like, people come to me and say, you know, young in their career, what should I do? Should I go into technology? Should I do a startup? Is it risky? And like, it has so much to do with where you are, kind of in your life, and... You know, my personal situation, you know, like, my wife had a very, very stable, great benefits but very low growth in terms of income, you know, role.

Chris: Yeah.

Gina: Which enabled me to be, you know, a founder at an early stage, you know, joiner of startups in my career, right? So she was the bond and I was the stock, and so you could sort of think about even just your career moves as that.

Chris: Yes.

Gina: You know, thanks to her, I had health insurance and the ability to do that, right? So, so much of it has to do with, like, your own economic realities and your own sort of, you know, kind of taste for risk. And I had a couple of huge failures on my hands. (Laughs) This is very embarrassing. And one good success. And my hit ratio was actually quite good over the course of, like... I got very lucky! 

Chris: That's the story, right? Yeah. 

Gina: That's the story. Exactly. And so, a lot of this is like, understanding your own risk tolerance.

Chris: Yes.

Gina: And your organization's risk tolerance. And on an individual leader level... And this is something we look for in our clients, right?

Chris: I was just going to say that.

Gina: Every once in a while, you get that leader who's like, kind of impatient, kind of frustrated. You know, some people just need risk to like, feel alive. I would count myself as one of those people.

Chris: (Laughs) Yeah.

Chris: Like, I just can't, you know... Like, I mean, to take the stocks and bonds, like, you know, my personal life is... I'm very lucky, it's very stable, very boring. At work, I need to, like, take some risks. I need to, like, make some moves. I need to try some stuff.

Chris: Yes.

Gina: Even if that means I'm going to, like, fall on my face. Because what is life? (Laughs) It is, like, a little bit of risk, right?

Chris: Well, and I think it's interesting when you talk about, like, looking at clients, right? Because we want to find the people who are, who have that profile and who are like...

‍Gina: Yes.

Chris: I want to change some stuff here. Like, I don't want to keep doing things the way things have been done.

Gina: Yes.

Chris: I want to take a big risk. Not even a big risk. Like, I just want something to move the needle forward for what my business is trying to do. And, like, that is a great avenue for producing good software.

Gina: Yes.

Chris: For focusing on customer experience. For not just accepting, you know, coasting on what you've already built. Et cetera, et cetera, et cetera. But... Just to go back, like, this idea that if you're internal at an organization, you can also profile the stakeholders that you have and look at them in the frame of, what are they investing in? What are they thinking about?

Gina: Yeah. What are they focusing on?

Chris: Are they a value investor or a growth investor? And how do I change how I am positioning what my product team is working on to speak to, you know, what they care about, right?

Gina: Yes.

Chris: How do I speak to the continual stability improvements to the value investor? How do I talk about the handful of bets that we are making, or the new features that we have on the horizon to satisfy the growth investor for the things that could drive potential growth but might not? And they're going to be much more amenable to that kind of conversation than if you go to the person who's holding a ton of bonds and say, here's a couple of big swings we're taking. 

Gina: (Laughing) Yeah. Right, right, right. They're not going to respond well to that, right. 

Chris: They're not going to respond well to that. They're going to be like, why am I funding this? Right? How am I spending my... They have a vested interest, right?

Gina: Yes.

Chris: In... Much in the same way that, when you buy a fund, you are expecting that that fund manager is going to think about the return that you are getting, right? It's the same thing when you have a stakeholder in sales or in marketing or elsewhere in the org, and they're looking at your product team, and they're saying, what is technology doing for me? Like, why is the product stagnating? Or why are we not getting the user growth that we expected? Right? It's the same relationship, and you have to be thoughtful and cognizant as a leader, you know, in a technology team, about managing to your quote-unquote "investors," right? Your stakeholders.

Gina: Look, a value investor is going to look at a try, at an experiment, and say, look at everything that we can lose.

Chris: (Laughs) Exactly.

Gina: And a growth investor is going to look at a chest, at a try, at an experiment, at a big move, and go, look how much we could make.

Chris: Yeah.

Gina: Like, what would happen if this went right? What would happen if this went wrong, versus what would happen if this went right? I think that's like, really a big difference. I gotta tell you, I used to, you know, my younger days when I was, you know, all about, you know, startups and small companies, I would look at people working in big corporations and think, eh, they're just, you know, like, going into their cubicles and putting on their, you know, nametags, and just, you know, working the machine.

Chris: Clickety clack on the keyboard.

Gina: Clickety clack on the keyboard, and then checking out at 5:00. That's not true.

Chris: No, it's not true.

Gina: That's not true for everyone. I think there are a lot of very entrepreneurial people in corporate positions that are interested in making change from within, and this is probably a comment on where I am in my life, and especially just seeing this happen with our clients, having, like, a great respect for those folks.

Chris: Absolutely.

Gina: Because making change from within a giant machine is harder, actually.

Chris: It's very hard.

Gina: Or as hard, or hard in different ways, than just like, trying to find market fit, you know, with your tiny little team kind of out in the world. You know, like, they're different things, but there's a lot of similarities. That entrepreneurial... That tolerance, that appetite for risk, that tolerance for risk, that, like, you know, bias toward action, that vision. But it takes a lot of, like, identifying those stakeholders. Who on the leadership team, who in the C-suite is like my ally and is going to be my sponsor?

Chris: Yes.

Gina: And like, has the same vision of the world? You know? Who else is afraid of those little startups out there that are like, eating our lunch? You know? Who else is frustrated that our mobile app is so bad, and that we're batch processing data, you know, over the course of days when our customers really need real-time. Like, who else is, like, upset by this, you know? (Laughs) And then you line up with those people.

Chris: Yeah. Bring them closer to me and my efforts. Yeah.

Gina: Bring them closer, and align their revenue goals, and like, you know, their mandates from the business to make this move. How do I make this move internally?

Chris: Yes.

Gina: That's a whole world. It's a whole thing.

Chris: Just in the same way that having a startup and trying to find product market fit is very, very challenging.

Gina: Yes.

Chris: Being an entrepreneurial type inside of a large company and trying to figure out how to effect change is a very difficult challenge, right?

Gina: It's very difficult.

Chris: You ultimately will have to navigate the market, but you also have to navigate this step before the market, which is all of the internal stakeholders. This is reminding me of the... At our internal event last month for our clients, we had a keynote speaker named Greg Larkin, who wrote a book that is all about this intrepreneurial thinking, right?

Gina: Yes.

Chris: This, like, this idea that you can be an entrepreneur inside of a very big company. And he talks about the classes of stakeholders that you will find, right? The cops, the, you know...

Gina: Obstructionists. (Laughs)

Chris: Exactly.

Gina: The compliance officers, the... Yeah, yeah, the naysayers. The political... Yeah. (Laughs)

Chris: They all have their own motivations. This is the thing. It's... These are not, like, imagined obstacles that are just trying to be in your way for the sake of being in your way.

Gina: Right.

Chris: They have their own motivations. They are trying to... You know, they've been burned in the past. Or they are trying to protect what they see as a core revenue stream. Or, you know, run down the list.

Gina: Yes.

Chris: Like, they all have their reasons for, you know, maybe not being on side with you at the beginning. And so it's very interesting to think about, I gotta crack this. Like, how do I have a different technique and a different approach for each kind of person that I'm going to, you know, meet along the way. And make sure that I can either get them on side, or figure out how to, you know, gracefully and gently navigate around them so that I can keep going.

Gina: Yeah, Greg Larkin was great. We're going to try to get him on the show. The name of his book is... The title of his book is awesome, it's "This Might Get Me Fired." We'll link it in the show notes.

Chris: Good title.

Gina: I really enjoyed his talk. It's really... And the book is about being a product thinker and a product leader inside of a giant organization who is nominally about, you know, setting up innovation, you know, innovation centered and, like, about innovation, but the realities of being innovative inside a big enterprise. It was a really good book, and really enjoyed his talk. You know, something that we talked about at that client event, and just in general with our clients, is that we ship working software. We being Launch. Like, one of our kind of mandates is that we ship working software into users' hands as quickly as possible. Even if it is a single-feature, like the lightest, you know, pre-MVP, alpha prototype.

Chris: Yep.

Gina: Quickly. We try to do it within 3 to 5 months. And this is one of our differentiators. And we feel like it's a differentiator because there are a lot of consultants that ship really beautiful PowerPoint presentations. But we like to say that we ship working software, and I think a big part of that is that there's, like, an urgency...

Chris: Yes.

Gina: ...About driving change through software, in that if you have, you know, no one can argue with working software. We talk about that a lot. And if you think about, you know, as you're running a startup, right? You get some money, maybe it's venture capital money, maybe it's money out of your savings. (Laughs) Or your friends and family round, or whatever. And you've got a burn rate and you've got a runway. Like, you've got a hard date to which you're paying out, burning every month, that like, you either sink or swim. 

Chris: Right. You're going to run out of money. Yeah. Yeah.

Gina: That... You're going to run out of money. So you have to get something out in the market that is either going... That is essentially going to give you a reason to keep going.

Chris: That's right.

Gina: And there's that, that urgency is extremely, extremely clarifying. And inside the enterprise... (Laughs) There is a, I call it a tendency. I think that people form committees, and schedule, you know, every three week meetings, and move pixels around in a PowerPoint, like, that... Like, because the metabolism of the enterprise is just so slow, right?

Chris: It's much slower. Yeah.

Gina: And so you have to bring that urgency and that getting something into people's hands soon into the enterprise. Because, you know, you're not running out of cash necessarily. But your burn, what your burn rate is is like, organizational credibility. C-suite attention.

Chris: Yes.

Gina: Something happens in the market, right? Something happens in the market and you're like, we are in a position to address this. We gotta do it now. We can't spend six months, like, talking about, you know, like, PowerPoint strategy. Like, we need to get something out there. And so, I think that's what's so critical, right? Like, you gotta find that partner that can get you something working, that people can't argue with it. And be like, oh, this is a real thing now, this isn't just an abstract idea, you know, that's in a deck.

Chris: Yes.

Gina: It's software that does something.

Chris: Right. And you have to be able to clarify your own driver in a way that, okay, so you can't log into the bank account and see your balance diminishing every two weeks, you know?

Gina: Right.

Chris: Because that is a real motivator. You know?

Gina: That is a real motivator. Yeah, we've experienced that. (Laughs)

Chris: Yeah. Exactly. When you see that number going down you're like, oh, I gotta get it into gear. Right?

Gina: Yeah.

Chris: So what is the analog? And you listed a few great ones, where it's like, I have to figure out why this is urgent, this is pressing to my organization. Because it helps rally people around it. And we do see this all the time, where organizations spend... Waste, really. So much energy on planning and building the case and overengineering up front, right?

Gina: Getting alignment. Yes.

Chris: Because they don't defer to... Now, does this mean you shouldn't go in with a plan? No. Of course, you should be thoughtful about how much planning you... But there's a sweet spot. Where there is some urgency. Whether you know it or not, if it's something you should be doing, there is some urgency around it. And you have to figure out...

Gina: There's a clock ticking.

Chris: There's a clock ticking. What is the clock and how do you orient around it? How do you get people to recognize it? So that you're all moving in the same direction. With the same understanding that like, oh, we gotta... We gotta go, you know?

Gina: Right.

Chris: And this is what's so clarifying about getting working software in people's hands, is it shows in very clear, like... It's like high definition, you know? Here's what we are going after, and we're either going to continue to go down this path, or we're going to say, this doesn't make sense, let's stop it right now. And it's clarifying in a way that looking at a PowerPoint presentation is not.

Gina: That's right.

Chris: Like, it's very hard for you to see the same choice or choices that are in front of you when it's abstracted away by presentations. You know what I mean?

Gina: Absolutely. And once you get going, and things start to move, and you've got something in people's hands and it's really light and really small, and you've got, you know, blank parts of the screen, right? Where people have to sort of fill in, start to fill in with their imagination, which is a good thing because you want to spark some imagination.

Chris: Yes.

Gina: And then you start to build a little bit more, right? Now, I think a lot of the product leaders listening to the show, you know, you're kind of, you're in the... You know, you're in the rhythm, you know? You're building software, you're shipping software, you're testing software, you're in the rhythm. But there's something about growth that I think the parallel to stocks and bonds really applies to your product portfolio as well, which is this idea of compounding growth.

Chris: Mhm.

Gina: That small steps compound over time.

Chris: Absolutely. Sometimes you gotta take a big swing, right? And other times you've gotta rely on that interest, or the dividends or whatever, building on top of each other. This makes me think of, like, big platforms like iOS, right? The operating system that runs on the iPhone. IOS 1.0 did not do a whole lot. And it was kind of rough around the edges, and there were things that were... didn't work very well, or were missing. And then 2.0 got a little bit better, and 3.0 got a little bit better. And now if you fast forward and you compare where we are, I don't even remember what version it's... 15 or 16, something like that.

Gina: 16. Yeah. Uh-huh.

Chris: And you realize all of these really nice touches, right? Oh the volume, when you adjust the volume with the hardware buttons, the volume indicator is right next to where the buttons are on the phone. That's really nice. Oh, control center is, like, laid out super nicely. And oh, there's a search box in settings. And all these things that, on their own, you look at them and they're like, these are small. These are tiny.

‍Gina: Right.

Chris: Right? Much in the same way, right? You look at your portfolio and you're like, oh, cool. I- earned, you know, 2.1% interest this month, or I got a dividend... Okay, fine. But then you step back and you're like, over a period of months or years, those build on each other to a point where, oh, this feels really, really good. Right? So, in the finance world, it's like, oh, I've doubled my money?

Gina: Right.

Chris: You know, over some long time period. Like that seems unfathomable, right?

Gina: Right.

Chris: But it absolutely can happen. It's just hard for you to wrap your brain around how compounding affects, you know, what's happening. Same thing in product, right? The experience can dramatically improve over a long-ish period of time, right? When you're working on a digital platform for years, if you're doing it right, you can have these massive improvements that, when you actually pick them apart, it's the sum of a ton of small improvements that just have built on each other over time. It's really interesting.

Gina: Absolutely. It is really interesting. And so, you know what's interesting, I think, for product leaders, and this is something that Geoffrey Moore, this is a point that he made in our interview with him, which is like, that growth investor, you have to tell them that story, right? Like, you have to tell them a story about, this is the potential, right? Like, okay, we're making the database a little bit faster. We're moving the volume button a little bit over here. Making this, like... But like, you have to kind of tell that story about how those things come together and where, like, what that next big leap is going to be, right? Like, how those things are going to compound over time. Because really, growth investors make decisions, VCs make decisions based on, like, their perception of future potential. (Laughs)

Chris: That's right.

Gina: You know? Right? Whereas value investors look at the spreadsheet and go, like, you didn't yield my 2%, you know, last quarter.

Chris: What's going on?

Gina: What's going on there? Yeah, and look, I think that iterative product improvements, particularly, like, kind of tech debt kind of stuff, better APIs, better, you know, like, back-end stuff, is... That stuff feels like, oh, this is just a bond. Like, this is like a tiny little investment that's going to yield a little bit of a nicer experience over time. But those set the stage, I think, for those improvements that the user sees that also come together to like, this big picture, right? Like, the difference between iOS 15 and iOS 4.

Chris: But don't you think a lot of teams get that wrong? Because a lot of teams, I think, just say, oh, we have to spend 20% of our time on tech debt. And that's when it stops, right?

Gina: Yeah.

Chris: It's just like, can we get broad agreement that we have to, you know, fix some old stuff? And, I mean, I think you put it really well. You have to tell the story. You have to ladder it up. You have to say, here's why we are focused on our database indexes or whatever, right?

Gina: That's right.

Chris: This... it matters because, dot dot dot. And then you tell the story from a customer focused, user focused perspective.

Gina: Yes.

Chris: And a lot of teams just don't do that. They don't go that extra step, or those extra couple of steps. They say, oh, well, we're just doing tech debt and that's it.

Gina: Yeah, paying down tech debt is a tough story. Yeah. (Laughs)

Chris: It's a tough story. And in the investor analogy, right? It's harder for the investors to feel like, okay, my... you know, I feel confident about how I'm spending my money. They're like, what's in the box? What is that tech debt? What's going on there? Why am I doing that? You know?

Gina: That's right. The tech debt story can never be, we're going to have exactly what we have now, just better.

Chris: (Laughs) Right!

Gina: The tech debt story always has to be, by paying down this tech debt, it enables us to make this next big leap.

Chris: Exactly.

Gina: Right? You know, another thing that I think is really helpful for, like, growth investors to hear is like, the next time that this market opportunity happens, right? Like, this big spike, this moment, you know, this PR moment, this... This just moment where, like, things spike, right?

Chris: Yes.

Gina: Like, the people who were, you know, building out Amazon to handle all the holiday traffic, right? Like that's how AWS kind of spun out. Right?

Chris: Yeah.

Gina: It's like, oh, we've got all this extra, you know, service for the rest of the year...

Chris: We need to be able to scale, right.

Gina: So, that tech debt story really has to be like... And I think a lot of the product leaders that we talk to are like, I'm just, I'm in the grind of, like, fixing the things that are broken, and the execs don't want to hear about that, you know? They don't want to hear about the little things, right? Like, they want these, like, big promises. And there has to be that big leap. How does this enable the next big leap.

Chris: Yes.

Gina: To get that growth investor to be like, get behind you and say, I'm going to show up for you in that meeting with the C-suite. I'm going to make the argument to put budget to you, to your group, so that you can get that headcount to do that thing, because we're shooting for this bigger story. Versus, like, it's just going to be a little bit faster. Even though I think as product people, we really just want our thing to be polished and smooth and fast and good, you know?

Chris: Yes. I want to tease out, though, these are two distinct points, but they are related, right? You have to be able to tell the story for the next big leap.

Gina: Yes.

Chris: Which, there are actually a lot of sources, right? That can source your next big leap. It could be what you were describing, where like, there's a market opportunity. It could also be acute pain that you are in, and you are living with, right? Which... we've seen some of our clients wield that to great effect, to say, listen, our customers are angry with us. Or, our employees are suffering with this software platform that we have. We need to make it better because there's acute pain. There are problems that we are living with on a day-to-day basis that are affecting our bottom line, right? We are making less money because of these things. So, there's that part of it that can help you tell the story. But then there's also this idea that, for the value investor, you want to be able to tell them there's benefits in compounding, right? To making these small improvements. That is also a story. It's just a different kind of story.

Gina: Different kind of story.

Chris: Right.

Gina: I think we're going to, you know, increase our user growth or user adoption by one point. (Laughs) But, you know, or two points.

Chris: In these ways. Right.

Gina: In these ways. And then you hit that. You do it, you do the things and you hit that, right? And it goes over time. But, right? But then there's like, oh, we're breaking into a whole new market. We think our customers want to do this other thing adjacent to our current market, and we're going to try it out. Like, those are very different.

Chris: Right.

Gina: They're different stories.

Chris: And you want to be able to have both of them, or several of them, concurrently, right? Much in the same way that you would have a diversified portfolio for your own investments, where you say, I know that I have something that speaks to my conservative side and something that speaks to my more aggressive growth side, and I want to have those in balance. And maybe I take some, you know, huge risks, right? I don't know. A riskier investment. Where you know that there's a high likelihood of failure, is my point, right?

Gina: Right.

Chris: And that's just part of the strategy, because you're looking at it in aggregate rather than looking at it in any one particular lens, any one particular audience group for your stakeholders. I think that that's really important. And good technology leaders, good product leaders, right? If you're a chief product officer, you need to be able to speak to your whole portfolio rather than just any one particular thing, and justify why you're placing the bets, making the investments, however you want to say it, for your platform in the way that you are. Because... And this is your point about storytelling, right? You have to be able to tell those stories.

Gina: Right. And for, you know, that leader who's taking, making big bets, and most of them are failing, that is utterly normal, right? There's, like, success and there's learning, right?

Chris: Exactly.

Gina: For the stuff that failed, you go, we have new insight into our customer. They did not want this.

‍Chris: Right.

Gina: Like, we tried this this way based on these hypotheses and this data, and they didn't want it. It didn't work. Okay, great. Now we know that. So now this is going to inform our next...

Chris: Our next move.

Gina: Our next thing. There's a story around that, too, right? I think value investors fire leaders who don't hit their numbers on a quarterly basis. And I think growth investors look at leaders over the long term, look at their track record, look at the stories that they're telling. Look at whether or not they can credibly deliver on those stories. And they take a bet.

Chris: That's right.

Gina: And they say, alright. On that person for some amount of time. (Laughs) You know? And those are different ways to go about it, right?

Chris: Absolutely.

Gina: Listen, I think great companies have to have growth, you know, investors and value investors in the C-suite. Both. Just like you said. You have to have both in your portfolio, right? But you just gotta know who's who.

Chris: You gotta know who's who, and you gotta know how to speak to them. This comes back to Geoffrey Moore.

Gina: Yes.

Chris: Like we were talking about at the beginning of the episode. You know, he also talks about how you can look across your whole business and realize that you're going to treat these investments differently, and you're going to treat these phases of where your business is, basically, in a little bit of a different way and have a different tolerance for it. Right? They're often represented by different stakeholders. But the whole business, you know, when you look at it, you can think about the different zones that your efforts are in, right? And adjust accordingly. And I think, again, the analogy holds, right? You look at your portfolio, you realize, why are you putting your money in this particular area? And then you adjust accordingly.

Gina: That's right. It takes different leaders, different treatment, different expectations, different storytelling. Gosh, this was very... As always, very cathartic. (Laughs)

Chris: I know. I feel like I need to log into my brokerage right now and make some changes.

Gina: (Laughs) Make some changes to your asset allocation?

Chris: Yeah, right!

Gina: Well, we should actually talk about that, because I do think that making changes to your asset allocation a lot is actually, is a kind of a bad thing, right? Like, this is what a great CEO does, right? They commit to, like, a strategy. Is our strategy growth, or value, or some combination, and what is the combination?

Chris: So, I think the best organizations are able to articulate this at all levels, right?

Gina: Yes.

Chris: From the CEO on down, right?

Gina: Right.

Chris: It's actually really great when we've, when we walk into a client organization and they know, here's how much risk tolerance I have in this one particular area, here's where I need to focus on really, like, optimizing and getting really efficient. You know, this other group is going to take the big bet. Like, there are organizations that do a really good job of defining this up front and pushing it all the way down, you know?

Gina: Yes. Right.

Chris: So that every individual person has a connection to it. But it's hard. It's really hard work. And, I mean, sometimes, you know, we get tapped to, like, help clarify, how do we make sure that this strategy, the digital strategy is clear at all levels of the organization?

Gina: Yeah, I mean, for everyone to know where they sit, why they sit there, what the time horizon is, what they're trying to do. I mean, that is the ideal state. I mean, look, we've worked with clients, though, where we've had that sort of, that intrapreneur who, you know, feels like, okay, you know, I've got some budget, I've got some go-ahead here, like, I can do it. And then, you know, we get in there and we start to have conversations and we realize, like, there's a lot of dissonance.

Chris: That's right.

Gina: There is not broad agreement. (Laughs) That this is valuable.

Chris: It's... that's hard.

Gina: Yeah. I mean it is hard, right? And so I think, you know, one of the great things about Zone to Win, Moore's book, is like, this idea of cordoning off those zones, right? And like, there being some protection.

Chris: Yeah.

Gina: These are the expectations here versus the expectations here. And like, everyone's clear on that. And, you know, the value investors go alright, I'm going to move away from that one, and the growth investors go, that's not... That's a high level of self-awareness. Like, not only strategy setting, you know, communication, but like, self-awareness. And the clients that we have the most success with, the ones that we can partner with, are the ones that are clear on their mandate. Their leaders have the stomach for, the right time horizon. The expectation is, there might be some failure along the way, but we're going to fail fast, learn and keep going.

Chris: That's right.

Gina: Right? That's the whole product mindset. I admire those folks, because that's hard to do. And I realize now that in a big enterprise, a big corporation, those intrapreneurs are taking those roles, versus going out and, you know, doing their own startup, you know, not just because they need, you know, a steady paycheck, although all of us do. (Laughs) 

Chris: Yep.

Gina: They're doing it because they're like, I'm going to have a bigger impact...

Chris: Yes.

Gina: In this large place that already has a huge customer base, right? Than I can in a smaller setting.

Chris: Absolutely. 

Gina: And there's a lot to be said for that.

Chris: Totally agree.

Gina: Well, if you are thinking about your product portfolio, your business, your value versus growth investors, we'd love to hear about it. I think this is the kind of stuff that everyone, everybody in a leadership position kind of grapples with. What are we doing here? You know, who's got the stomach to take those risks? We'd love to hear from you. Send us a note. Catalyst@NTTdata com. We read every note, and we love to hear from you all.

Chris: And we would love to just hash this out with you. If you're having trouble thinking it through, and you're like, I don't see how this applies, or I have this one weird case where this might not work, reach out with those, too. Because we love to hash through these puzzles.

Gina: Thanks for doing this with me, Chris.

Chris: Thanks, Gina.

Gina: I wish your portfolio a lot of growth and a lot of stability to you in the future.

Chris: (Laughs) Same to you. That's right.

Gina: And I'm not, I'm really going to try hard not to log into my brokerage account today. (Laughs)

Chris: That is your task. Alright.

Gina: Have a great day.

Chris: See ya.

Gina: Bye.

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