The Product Manager’s Butterfly Effect

As Product Managers, we are constantly seeking the next big thing that will set our product apart from the competition in a way that will delight our customers. This “Big Thing” focus can distract us from the potential impact that small changes can have on a product, if they are properly targeted. This is the “butterfly effect”, where a seemingly small change can trigger much larger changes is a dynamic system.

There is something that you should know about me. I have a strange attraction to the idea of complexity. My love of “complexity” is not the sort of complexity that is generally associated with mobile phone pricing plans.

Instead, it’s a love of the strange, natural order of things that is very difficult to predict in detail, but form quite clear patterns at higher levels of view. For example, it is very difficult to predict the specific buying behaviour of a single person, no matter who they are, but it is much easier to predict an overall pattern of buying behaviour of a certain type of buyer.

Often we can create simplified models that allow us to improve these predictions in the short term but these models are generally quite limited and will not be able to help us determine exactly what will happen over longer periods of time.

Another important element of ‘complexity’ is that the systems that it describes are dynamic or non-equilibrium. This is probably best explained by first describing what is meant by equilibrium. An equilibrium system is one that is sealed off or is ‘closed’, where any activity has reached a balance and on average, nothing is changing. This is akin to putting a dry sponge into a still bucket of water. Initially the water will soak into the sponge, then as the sponge soaks up water it will drain some back into the bucket. When the soaking and draining are happening at the same rate the system is said to be at equilibrium.

The problem with equilibrium is that it describes a state that is, in effect, dead. To put this into economic terms, equilibrium would be a state where supply is exactly equal to demand for a given product. The price will never have to change and neither will the product. There will be no competitors and no external economic forces to upset the balance. We know that this is not the case. The economy at any level is an open system where a change in one part of the economy has the potential to impact another part of the economy. In fact the global ‘financial crisis’ is a perfect example of this non-equilibrium situation. It illustrates just how sensitive the economic system is to change.

OK, so how does all this apply to Product Management? At first the idea can seem a bit scary but to deny it will only be detrimental to the success of any product. Instead it is important to try and understand all of the different internal and external influences that can or do impact your product’s success. You also need to recognise that these will be constantly in a state of change. It is also quite empowering to know that as a Product Manager you are also in a position to affect market change. As you come to embrace the idea of a complex market place you realise that there are opportunities to make small changes that have big impacts.

To do this you might take a single key undesirable assumption or stereotype of a product class and turn it around. features_imageFor example, consider the stereotype that video games players were sedentary and practically motionless except for their button mashing actions. Now imagine instead that every time a gamer used a video game they became fitter. The Nintendo Wii has taken this challenge and delivered a brand new gaming experience that opened up a whole new market of video game players. It is this aspect, more than the underlying technology, that has made the Nintendo product so desirable and competitively different in the market place.

So as you thinking about the ‘next big thing’ remember that if may be a change as small as the flapping of a butterflies wings that could completely change the market place.