485: How product managers can navigate “Big-Bet” transformations – with John Rossman

The habits that set apart transformational product leaders Today we are talking about why organizations are increasingly facing the need to transform and how to navigate those changes. If you have experienced a big change, you already know firsthand how challenging it is. All of us need to know the principles that make transformations successful, and that is what we’ll takeaway from this discussion. Joining us is John Rossman, who was an early executive at Amazon and led the launch of the Amazon Marketplace (which allowed third-party businesses to sell on Amazon). He is a four-time author including best seller “The Amazon Way” and “Think Like Amazon,” as well as a sought-after business advisor and keynote speaker. His expertise is on leadership for innovation and business transformation. His most recent book is Big Bet Leadership: Your Transformation Playbook for Winning in the Hyper-Digital Era.   Summary of some concepts discussed for product managers [2:41] What advice have you received that helped you think about how to have more successful influence in the organization? I had a longtime business partner, Steve, who told me, “After Amazon, your superpower is always clarifying and simplifying the discussion, the meeting, or the communication.” I recognized from Steve that one of the things I learned at Amazon was how to clarify and simplify. Especially in a complex situation, the person who can clarify and simplify the communication is the controller of the situation. After I left Amazon, one of my key clients was the Gates Foundation, and Greg Widmyer told me, “You do a really nice job taking the little strategies, inserts, and mechanisms from Amazon and delicately implementing them and influencing our work. I think you ought to write a book about it.” The ability craft a story and influence others at scale through a book was a great piece of advice and something I had never thought about before. [5:48] What are Big Bets and why are they important to organizations? A Big Bet is any initiative, strategy, or project that both has the potential for significant business impact and business upside and has significant multi-sided risks or assumptions. They are not simple initiatives or straightforward capabilities. Big Bets typically happen at the enterprise level but can happen at the team or product level. They get called lots of things like market repositioning, merger integration, digital transformation, AI strategy, etc. Big Bets have a 70-85% failure rate, but those are all errors of commission where an initiative was taken and it didn’t work as scheduled. The biggest failure point is typically the benefits. But those statistics don’t count the errors of omission where a Big Bet was needed but one wasn’t taken. When you see a company go from great to average or from average to irrelevant, a Big Bet was needed. The framing of my book, Big Bet Leadership: Your Transformation Playbook for Winning in the Hyper-Digital Era, is critical to answer the question, why are Big Bets needed? It’s my hypothesis that these past 30 years of digital change has been the warmup innings for the next era, which we call the hyper-digital era. The companies that can make a core capability out of transformational change, high potential impact, and high risk will win. In addition to being operationally excellent and great at incremental moves, they are going to be great at these transformational capabilities, these business model changes that are so essential. Those are the Big Bets. [9:33] Tell us about solving wicked problems. If you asked me, “John, what are you good at?” I would say I’m good at solving wicked problems—multi-sided, non-obvious problems. Technology is just one of the mega forces that I think will drive this next era. Mega forces include change, labor force,