On Product Management

This is part 2 of a series of guest posts by Don Vendetti. Don is the founder of Product Arts, a product management consulting company in Seattle.

NOTE: If you’d like to write a guest post, contact us and let us know about your idea.

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In part 1, I described my conversations with some industry executives on the question:

What is Product Management’s overall value to your company?

The answers were quite interesting. In this part, I’ll look at the following question:

Question #2:  How would you measure success for the group and individuals?

This question generated a few different discussions and in many instances I got the response “they SHOULD be measured on…”, which indicated their expectations and reality are different.

That being said, most respondents were strongly on the side of tying rewards to business results.    These included:

• (#1 by a wide margin) Meeting product business plans and forecasts for revenue and profitability
• Achieving key business objectives for the specific period, including meeting delivery milestones for releases and launches
• Achieving key market metrics – adoption and usage, penetration and market share, customer satisfaction and retention

Only a few mentioned the difficulty of looking at current business results only, such as revenue, while needing the product manager to be focused on producing future business results.

One also recognized there may be multiple product managers on a large product, with revenue difficult to associate to each.

These advocated a more blended set of measurements that included specific assigned metrics or deliverables within a specific period.

Product quality was mentioned a few times, and included measurements such as returned product, trouble tickets submitted, major bugs found and SLA performance.

There were also some who raised the need to include some “intangibles”, specifically around how well the individuals were perceived in the organization.

This included satisfaction ratings of internal stakeholders based on timely and effective support of other functional groups, how well they performed at driving product delivery and resolution of issues, how well they collaborated with others, and in providing general leadership.

To capture the intangibles, a few companies performed peer reviews or 360 degree reviews on a regular basis.

A few highlighted that the metrics used for a B2B company versus a B2C were somewhat different.

In the B2B company, responsiveness and effectiveness in supporting a direct sales team for major accounts was a key need.

In a B2C company, there may be less on-demand support of the sales channel, and a higher emphasis on marketing and usage metrics.   (As with everything else, this is probably highly variable from company to company, but may be worth a whole separate article.)

Specific comments included:

(CEO) “I am sure every company is different, but revenue, customer retention, customer satisfaction, net promoter score, and market share (are the measures of success).”

(VP Biz Dev/PM) “We measure and reward based on a combination of product performance in market and other metrics related to on-time delivery for new products, quality metrics, and other qualitative measures based on the PM’s role in providing timely and effective support to marketing, sales, and other functions.”

(CEO) “The success metric has to be on net contribution.  Given the lifecycle stage of the product, it may even be managing losses during the formative stages, but ultimately, the only goal of any product is to make money.  The market is the best indicator of success. If quality is down, sales will be off or returns high. If the product doesn’t meet needs, there will be no sales.  If the product is a poor value against the competition… you get the idea.”

Take-Away

The key take-away from this section is the expectation level of the senior executives on product management being measured against business results.  These other executives are heavily dependent on product management for making the right product choices to ensure business success, and they believe product managers should be tied to company results, just as the execs are.

With business results emerging as the top priority, I would reorder and rework my previous value list to be:

• Delivers measurable business results through product solutions that meet both market needs and company goals.
• This is accomplished through:
  • Creating a shared awareness of the customer and market needs to the internal functions
  • Shaping the product solution and delivery plan
  • Facilitating and supporting cross-functional and external activities required to achieve the planned objectives

So how well does Product Management do at meeting expectations? I’ll get to that in part 3.

Don

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Related Posts

Measuring Product Management (part 1)
Measuring Product Management (part 2)
Measuring Product Management (part 3)

This is part 1 of a series of guest posts by Don Vendetti. Don is the founder of Product Arts, a product management consulting company in Seattle.

NOTE: If you’d like to write a guest post, contact us and let us know about your idea.

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Measuring Product Management – The Executive Viewpoint

There have been plenty of discussions about how to measure and demonstrate the value of Product Management within companies.    From posts on this site:

• VP of Engineering has a mandate. You need one too.
• Product Management Metrics (part 1)
• Proiduct Management Metrics (part 2)

and from a recent roundtable at the October Seattle ProductCamp, there’s an obvious challenge for the profession.

I decided to follow the prescribed Product Management protocol – I went out and talked to my customers.

Here’s the feedback from some senior executives running technology companies.

My list of execs is comprised of 12 individuals from my contact list, most of whom I’ve worked with at some point and are now scattered around in varying roles.   All have been on the senior executive staff of at least one company.

Most are in the Seattle area, some are CEO/COOs, some are technical heads, some are marketing heads and several have worn multiple hats – business development, engineering, marketing, general manager, program management.   Some have been product managers at some point or managed it as a function.

Company size varied from multi-billion dollar enterprises to startups still trying to get off the ground.

I contacted them through email initially with 3 questions:

1. What is the value that product management brings to your company or to your department?
2. How would you measure success for the group and individuals, i.e. on what metrics would you reward them?
3. (Bonus question) Have you found product management to be effective in meeting the goals, in your experience.

On some of the responses, I probed further through email or met with them in person to discuss.   Some responses were intriguing.

Question 1.  What is product management’s overall value to your company?

There was a strong agreement of the strategic value expected from product management, and that fell into a few categories:

• Bringing an understanding of the customer and the market into the company
• Creating a vision, direction, and focus for the product internally and externally
• Defining product/business plans to meet company strategy and objectives
• Evangelizing the market needs and product solutions internally

At a tactical level, the front-runners were:

• Managing product features, product requirements, competitive analysis, prioritization and roadmaps
• Working with and supporting other functional groups – development, sales, support, marketing

Some comments included:

(VP Eng) “Product Management needs to be the voice of the customer AND the business and they need to advocate for both.”

(VP Biz Dev/PM) “Product management provides a key linkage between our end customers, the field sales and support organizations that support them, our engineering and QA teams responsible for product innovation and delivery, and our executive team from an overall company and product strategy perspective.”

(COO) “Overall product direction and roadmap, clearinghouse for requirements, driver of product delivery.”

(VP Eng) “Right brain, big picture, strategy, positioning, how to win in the market.  Bring customer view into company.  Outline the product needed.   Evangelize the product internally.”

(VP Corp Dev) “Ability to distill corporate goals and objectives and customer / market needs into products (services / solutions) that are built and sold at positive margins!  That includes not just having the bright ideas, but the organizational savvy to make them real.”

Some interesting comments came from multiple respondents involved in Agile. They indicated the value of product management is even higher in that environment.  Working as the Product Owners with Development seems to raise their visibility as an integral piece of the machine.

(VP Eng) “In the modern world of Agile the product management role is even more critical. They are often embedded in a SCRUM team as a product owner or business owner. These highly cross-functional teams can move quickly and demand that the role is in touch with the business and on-demand available to the team – in early iterations for prototyping and market validation, in mid iterations for feature build-out and in late iterations for sustaining and ongoing investments.”

Take-Away

If I rephrase some of the key expectations from above, here is what I come up for the primary value product management brings to a company:

• Creates a shared awareness of the customer and market needs to the internal functions
• Drives product solutions that meet both market  needs and company goals
• Facilitates and supports cross-functional and external activities required to achieve the planned objectives

So if this is what is valued, then what is actually measured?    I’ll get to that in part 2.

Don

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Related Posts

Measuring Product Management (part 1)
Measuring Product Management (part 2)
Measuring Product Management (part 3)