Dealing with Complexity in Product Development

This week’s Cyb3rSyn Newsletter summarizes the key highlights of the inaugural Cyb3rSyn Labs Podcast episode - my conversation with Daniel Schmidt, the Founder of DoubleLoop.

I wanted the first episode of the Cyb3rSyn Labs Podcast to be at the intersection of the ideas that we discuss in the Cyb3rSyn Community (Systems Thinking, Complexity, Cybernetics) and Entrepreneurship - I couldn’t think of anyone better than Daniel Schmidt! DoubleLoop helps product development teams to build products in ways that embrace some of the insights from these fields to avoid the typical pitfalls of the mainstream.

Table of Contents

• Focus on Input Variables

• Messy Middle & Aligned Autonomy

• Outcome-Oriented Product Development

• Full Episode

Let me begin today’s post with a pertinent quote from Margaret Wheatley

Here are some of the topics we discussed…

Focus on Input Variables

We discussed the importance of focusing on input variables rather than obsessively chasing output variables (e.g., quarterly profit margin). While the mainstream management approach can be framed as "Management by Objectives (MBO)," there is an alternative school of thought called "Management by Means (MBM)."

MBM calls for focusing on your means of production instead of just focusing on your results. When companies focus solely on their results (such as quarterly revenue or profit), they often end up compromising their means of production in the long term.

Jeff Bezos, wanting to avoid this pitfall, publicly downplayed profits to Wall Street analysts and systematized this approach at Amazon through leadership principles that explicitly direct leaders to focus on input variables (e.g., Fast Track In Stock: percentage of detail page views where products were in stock and immediately ready for two-day shipping) instead of output variables (e.g., quarterly revenue/profit).

Quote from Amazon Leadership Principles:

Of course, careful consideration must be given to selecting appropriate input variables. Listen to Daniel discuss how DoubleLoop helps in this regard and explore deterministic and probabilistic correlations in the full podcast episode.

Messy Middle & Aligned Autonomy

Mainstream management practices often result in what Dan calls the "messy middle," where many people doing the essential work—like engineering, design, and marketing—struggle to understand how their work fits into the bigger picture of the business.

Their work often feels driven by the whims or intuitions of those above them. This leads to uncertainty about whether they're working on the right things, causing disillusionment and diminished enjoyment of their work, which ultimately results in suboptimal outcomes.

Daniel explored the concept of 'aligned autonomy,' where leadership clearly defines problems without being prescriptive about solutions. He emphasized the importance of humility and mutual respect between management and front-line workers, and the need for collaboration to achieve the best outcomes. The discussion also addressed the limitations of traditional long-range planning in uncertain and complex environments, suggesting a more adaptable approach.

Outcome-Oriented Product Development

Daniel emphasized the need for product development teams to embrace a more outcome-oriented approach rather than functioning as a "feature factory."

He stressed the importance of examining the outcomes of their bets and hypotheses rather than simply assuming their ideas will work. The significance of feedback loops cannot be overstated. Daniel also highlighted the limitations of current tools, such as Gantt charts and Kanban boards, which are better suited to a factory-like mentality than innovative product development.

Daniel concluded by introducing and explaining the Double Loop tool, which is built around the premise of examining the outcomes and the corresponding bets and hypotheses. Watch the full conversation for more details.

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