When looking at a problem, I have a simple framework for evaluating what’s wrong. Is it People, Product, Playbook or Process (or some combination thereof)? When the 4 P’s are all aligned and functioning well, great performance follows. And if we aren’t hitting numbers or executing well, then something within the 4 P’s isn’t right.
“Manage the cause, not the result.” ~W.E Deming
You may be familiar with the 4 P’s of Marketing. I’ve come to think of People, Product, Playbooks and Process as the 4 P’s of SaaS.
Often, we think we have the right people in the right seats in the bus. Until one day we realize we don’t. We’ve held on to people who didn’t grow with the organization. We hired poor culture fits. We hired based on anticipated needs versus actual needs. When you have a high-performing team, you just know it. So, if it doesn’t feel like you have a high-performing team, you probably don’t.
“…leaders of companies that go from good to great start not with “where” but with “who.” They start by getting the right people on the bus, the wrong people off the bus, and the right people in the right seats. And they stick with that discipline—first the people, then the direction—no matter how dire the circumstances.” ~Jim Collins
What are some other symptoms of not having the right people, in the right roles, doing the right things?
- Moving people around constantly trying to find the right spot for them.
- Managers who aren’t trained or equipped to manage.
- Lack of accountability and transparency.
- Unclear ‘chain of command’.
- Lack of trust, of each other and of the organization itself.
- Hodgepodge org chart, cobbled together over the years to patch over problems or shore up weaknesses.
- High turnover (both voluntary and involuntary).
- Lack of alignment and clarity around the mission, vision, strategic initiatives and goals.
“You can always feel when product/market fit isn’t happening. The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of ‘blah’, the sales cycle takes too long, and lots of deals never close. And you can always feel product/market fit when it’s happening. ~Marc Andreessen
A SaaS company is dead in the water without a great product, and product-market fit. This is fundamental and the symptoms are clear.
- Elusive product-market fit, always feeling like it’s right around the corner.
- Acquiring customers feels harder than it should.
- High customer churn rate.
- Low net retention.
- Quality issues—bugs, defects, confusing user experience.
- Management issues—lack of scalability, decaying code base, growing technical debt.
A playbook says why and how we do things as an organization, a department, a team and an individual. Without playbooks for why and how we do things resources are wasted, efforts are often duplicated, and results are elusive (without clarity around why).
“…a playbook includes “process workflows, standard operating procedures, and cultural values that shape a consistent response—the play. A playbook reflects a plan; an approach or strategy defining predetermined responses worked out ahead of time.” ~Accenture
Here are some symptoms that a company is lacking effective playbooks for key functions:
- Takes too long to ramp new staff.
- Hiring under or overqualified staff who aren’t a fit for what’s needed to execute.
- A lack of dispersed institutional knowledge; key information is silo’d with few people.
- Over-dependence on a small number of employees; a belief that things are so complicated it would be impossible to ramp someone else up.
- Inconsistent performance without clarity as to why the mark was missed.
At its core, a process is really nothing more than a checklist. This is probably the “least” important of the four, but is undeniable in its impact. I’ve seen $1m ARR companies with perfect processes not be able to get out of the gate, and I’ve seen $25m ARR companies without a single process in place.
If that’s the case, how does process impact performance?
“If you can’t describe what you are doing as a process, you don’t know what you’re doing.” ~W. Edwards Deming
Over-reliance on process can distract from the mission at best, and get in the way of executing with agility and fluidity at worse. But on the flip-side, a lack of process will bring a company to its knees at some point and completely hinder growth. When the foundation cracks due to lack of process, it’s hard to glue things back together.
There have to be processes. Not too many, not too few. Just the right balance. Processes guide how things are done, ensure consistency and foster accountability. Simply put, processes help companies scale. How to know if process is part of the problem:
- Too much effort/too many resources for the output.
- Things generally feel in disarray, all the time.
- Executives and staff who play constant “whack-a-mole” .
- One hand doesn’t know what the other hand is doing.
- Training and ramp up of staff takes longer than it should.
- Inconsistent outcomes—sometimes things are done well, sometimes they aren’t.
So, which of the 4 Ps is getting in your way?
When the 4 P’s are aligned, optimized and healthy success is certain to follow. So the next time you are facing a business problem, pull back and evaluate each of these areas. This can be applied at any level of the organization—from company wide to a department to a team.