As a product manager, how do you know you’re doing your job well?
Depending on your personal motivations you may want to know for your own satisfaction, to give your boss evidence at your next pay review, or to give your résumé some teeth for your next job. This article outlines the problem with traditional metrics for product managers and offers some better alternatives for measuring success: communication, ideas, roadmapping, launch and end-of-life.
How’s my driving? #
Traditional KPIs focus only on the performance of the products, not the product managers.
You could argue that if your products are performing well financially and customer satisfaction is good, that’s a reasonable indicator of good product management performance. The problem with this is that product managers are generally one step removed from both of these measures.
Let me try to explain why. We don’t sell the product (okay we do sometimes, but that’s not the day job). Similarly we’re not (meant to be) designing the product, just specifying the problems for the designers to go away and solve creatively. So again we’re not directly affecting customer satisfaction. Traditional key performance indicators (KPIs) for product management tend to focus only on the performance of the products, not the product managers.
UPDATE: I’ve written a follow-up based post. It has practical examples of how to measure product manager performance for free download.
Read it here: How to Measure Product Manager Performance
So we need ways of measuring how well we do our jobs. We could ask the people we interact with for feedback on how we’re doing. To development, how easy were my requirements to understand? To marketing, how well did I explain what would be in the forthcoming release? To sales, how much additional commission have I gifted you this month?
Perhaps you can see where I’m going with this. It’s seemingly a short hop before we end up offering everyone we speak to A CHANCE TO WIN AN iPAD if they complete a short survey on how satisfied they were with the content of our conversation. I can’t see that working in the long-run, can you?
Let’s try a different tack by measuring activities we can directly control.
Measuring what we can control #
As product managers, we undertake many different tasks with both long- and short-term goals. We know we’re doing well in general if we can objectively measure whether we’ve done these tasks well. What we’re aiming for is quality, not necessarily quantity. If the quality of the tasks is good, then successful products should naturally result.
1. Talking to people #
If you’re not sure who you need to be talking to about your products, grab a company directory. Cross your own name out. There’s your list.
Do you hide at your desk and fiddle with spreadsheets and documents all day, or do you get out there and talk to people?
You need to be conversing with potential and existing customers, partners, suppliers and regulators in some cases to get the outside view on your marketplace, as well as reading all those opinion pieces and articles online. You also need to be speaking with all the different departments involved in the planning, creation and delivery of your products. If you’re not sure who you need to be talking to about your products, grab a company directory. Cross your own name out. There’s your list.
Desired outcomes: to know your market and company inside-out, and to keep your knowledge current
Things to measure:
- External communication: speak to people outside your company and in your space at least once a week
- Internal communication: catch up with representatives from each department in your company at least once a month
- Thought leadership: speak at a relevant seminar at least once every six months
2. New ideas #
Research at least one new idea each month and present it with your evidence to a Dragons’ Den
Another day, another fire to put out – it’s all too easy to get lost in the day-to-day tasks of being a product manager.
You can’t spend all your time being reactive, though. You also need to be seeking out market problems and having ideas on how to solve them. Devote time to researching the market, which should be a great deal easier if you’re following Step 1 above.
When you do have an idea, if you understand the market well enough, you should be able to answer each of the following questions in under an hour, backed with some market evidence:
- What does your target market look like?
- What market problems are there in your target market?
- Which problems affect large proportions of your target market?
- What is the solution to the problem?
- How valuable is your solution to the target market?
- How much is your solution going to cost to implement?
- Which other companies, if any, are trying to solve the same problems?
- Why is your solution going to be better for the target market than anyone else’s?
Research at least one new idea each month and present it with your evidence to a Dragons’ Den with one senior representative from each of sales, marketing, legal, finance, development and product management. You should be able to make your pitch in five minutes and answer all questions in a further ten minutes. If not, you’re probably still too vague on the idea. Scrutinise it, refine it and try again next month.
Create a more detailed business case for the ideas that are worth pursuing, bank the ideas that are rejected for review at a later date.
Desired outcomes: to pinpoint the ideas that will form the basis for successful future products
Things to measure:
- Knowledge: how clearly and easily are your ideas and their benefits articulated?
- Perceived value: how many of your ideas are approved for further investigation?
3. Roadmap planning and management #
Flexibility and good decision-making is more important than clairvoyance (or blind luck)
Now that you know what’s going on around you and you’ve established which products and features make most sense to take to market, you need to create a running order for at least the next twelve months based on your current set of knowledge and assumptions.
On the one hand, you need to have a long-term destination defined along with the time you expect to arrive there. On the other, you can take different routes to get there. Flexibility and good decision-making is more important than clairvoyance (or blind luck). Plus, priorities change so review your roadmap every three months and adjust if necessary. If you do want to change the route mid-way, make sure there’s a good set of reasons for doing so and write them down.
With this plan in place, do sales / marketing / development / senior management / customers / partners know what’s coming up, why it’s important for them and when it’s coming? It doesn’t necessarily matter if things move around on the roadmap as long as everyone is kept up-to-date and those that need to know why things have changed understand the reasoning.
Desired outcomes: to deliver the right products to market at the right time, in the right order and to ensure that everyone knows what’s in it for them
Things to measure:
- Communication: update the company on your roadmap at least once a month
- Time: initial project start and finish dates compared to what actually happened
- Budget: estimated project costs compared with actual costs
- Scope: initial project scope compared with what was delivered
- Quality: variance in bug counts change over the period
4. Launch / anti-launch #
Apple: 28 days, 1 million iPads
5,000 iPad apps created, 12 million app downloads, 1.5 million ebooks bought at the iBookstore
Source: Fortune Magazine
Even if you’ve done everything right up until this point, your product will not sell if you screw up the launch. Part of this is making sure that all departments involved in a launch have the information they need, in the form they need, at the right time to use it. Another part is whipping everyone up into a frenzy of excitement and expectation, which peaks with the launch of your product. Apple are annoyingly good at this. Yes, I’m bitter.
If you’ve been good at communicating and managing your roadmap, you’re halfway there already. For consistency, have a checklist of things each department in your company plus customers and partners will need to know, and when they’ll need them. Keep your launch checklist to hand and review at least on a weekly basis.
77% of iPhone 4 sales were upgrades
Apple has built a recurring revenue stream from a growing base of loyal users
Source: Fortune Magazine
The flip side of this is killing off older products or versions of products. It makes sense to think about this here for two reasons:
- You probably want customers to move up to the newest version of the product, so you need to be encouraging laggards on ancient versions to step up
- End-of-life is just like a launch in reverse in that you still have information you need to convey to your company’s departments, customers and partners in the right form, at the right time for them to use it effectively.
The excitement and anticipation around the new version and its benefits are great motivators for laggards to upgrade. Again, Apple are annoyingly good at this.
Desired outcomes: rapid uptake of products at launch time by new and existing customers
Things to measure:
- Readiness: how prepared your company, customers, partners and target market are for the forthcoming launch
- Pipeline: amount of business forecast for the new product in advance of the launch
- Effectiveness: actual financial performance of the product by time after launch
- Upgrades: percentage of existing customers upgrading to new product and how soon after launch
So there you have it: four key ways to measure whether you’re any good or not, through activities you can directly control.
UPDATE: I’ve written a follow-up based post. It has practical examples of how to measure product manager performance for free download.
Read it here: How to Measure Product Manager Performance