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Promoting Leadership Principles in Product Management

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How to use Measurement to Manage Like a Pro

Guest post by Mary Prescott

I’m sure you’ve heard statements like these before:

“My team is exceptionally strong. They seem to be doing well”

“We’ve been improving. It’s hard to quantify, but I am sure we are getting there”

While you might hear these statements from any manager, they all have one thing in common: the lack of specificity. How strong is the team? How do you know that they are doing well for a given time period? How exactly – and based on what specific parameters – is your team improving?

Organizations need good managers and exceptional leaders (at all levels of your business). McKinsey Insights’ Pankaj Ghemawat references a survey of senior executives where 76% of them feel they need to develop global-leadership capabilities, but only 7% of feel they are doing so effectively.

Define Your Metrics

To measure or not to measure: that’s not even a question anymore. If you do not measure, you don’t get anywhere. It’s unproductive to begin without knowing what you want and how to measure your progress. Starting from your own performance metrics, you have to extend individualized and group metrics for your team. A research paper titled Metrics: You are what you measure by John R. Hauser and Gerald M. Katz from Massachusetts Institute of Technology, Sloan School of Management, notes that metrics are in use everywhere, but if the organization uses the wrong metrics, they will not achieve the expected results.

Define the right metrics to measure individual goals and collective goals of the team. These ought to fall in line with the overall goals of the company.
Define. Create. Measure. Perform. Measure again.

Test your management strategies

How are you managing your team? The only way to know for sure is to test your ideas.
For instance, you might have a hypothesis that sales teams can work better when they meet clients and present their pitches with visual aids using mobile devices such as tablets. How do you know for sure?

Test your hypothesis: pick two groups of sales teams and allow one team to use sales aids such as laptops and tablets. The other group goes without any of these aids. Measure performance of both the groups. If the former group performs better, you’ll know that your hypothesis is right.

Find out if your decisions, plans, and strategies work first before deploying them.

It’s experimental. It’s a work in progress. That’s why most managers don’t risk doing it.

Dig into your data

What comes off from data might not give you the complete picture. It could seem obvious but if you dig deeper, more revelations will surface.

Depending on your goals — and the goals of your business — your data must serve to give you what not’s so obvious. Good managers see what’s not visible from data at “first look”. For instance, your customer satisfaction surveys could reveal that your customers buy X only so that they can avail a discount on Y. Meanwhile, you assumed that product X was a winner. Clearly, it isn’t.

While you assumed that your target audience was largely male, your sales records show that the majority of buyers were female. Have you been targeting the wrong base?
Peel off the “obvious” information from data and you’ll be able to align your business goals better.

Management isn’t just about goals

It’s easy to lose sight of “people” thanks to the inordinate focus on specifics, business goals, projects, and deadlines.

While efficiency and performance are certainly key inputs for effective business processes, it’s still people that you’d have to manage. Individual members of your team could have personal problems, friction points, and many other human elements that you’ll need to address.
Don’t lose sight of the people in the team. Take care of your team and the goals will fall into place.

Trust your guts

If management was only about making decisions based on all the measurements, numbers, statistics, analytics, and performance reports, almost anyone could be a good manager.

Sometimes, management is about guts.

When Bob Lutz’s guts made him leap into action to create what is today’s Dodge Viper, there were many naysayers. After a $80 million investment, Chrysler managed to create an outrageous sports car which was selling at $50,000. The sales team swore that no one would buy it. Yet, the Dodge Viper was a smashing success changing Chrysler’s image overnight.

The story repeats – in other industries – with the Steve Job’s iPhone, for instance.

The stories are everywhere. While you can’t depend on your gut for every decision, it surely plays a vital role in separating ordinary managers from the amazingly successful ones.

Mary Prescott is working as a community manager at WorkZone – A web-based project management software company. She is @MaryP_WZ on Twitter. When she’s not working, you’ll find her reading fiction or hiking with her dog.

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The Product Management Perspective: Measuring product performance can be difficult, and it’s not a common practice for many product managers. However, the more specific you are about your products’ performance, the better your team members will understand their role its success. Focus not only on building great products, but also on ways you can measure your progress more successfully.


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Using smart goals and data-driven assessment

Smart goals and data-driven assessment help employees and managers map career advancement – Guest post by Danielle M.

Employees may start angling for a merit increase after a certain amount of time on the job, but discussions about advancement can get uncomfortable — and frustrating — if metrics are left out of the equation. Using metrics to measure progress toward certain milestones can make evaluations more valuable and help employees work toward their objectives.

Setting SMART goals

The SMART system works quite well for setting objectives and measuring performance. Here’s what the acronym means:

  • Specific: When an individual or team needs to tackle a large general goal, such as “Increase productivity,” it often helps to specify the desired action. Breaking down the job into smaller, more specific goals can also help. For example, “increasing productivity” may be clearer as “increasing number of items made per hour” or “decreasing the time it takes to solve problems.”
  • Measurable: How can an employee and manager measure performance on a specific goal? Often, when data is used to assess performance, a yes or no answer can ascertain whether a goal was accomplished. Did the individual meet production goals? Were all incidents of problems reported and resolved quickly?
  • Achievable: When setting goals, be sure that achieving the desired outcome is possible. A manager cannot increase productivity by taking away breaks, for example. But she may be able to implement a reward system.
  • Relevant: There’s no sense in creating a goal that doesn’t meet the needs of the company or department. Be sure to set goals that feed into larger goals for the team or organization.
  • Time-bound: Goals need to have an end date, even if it simply marks the beginning of the next phase. The timing aspect of a goal gives the employee and manager a window for evaluating progress toward the goal

Using metrics to assess workplace performance

Implementing the SMART system for performance reviews requires a certain amount of data collection. After all, tracking progress toward a specific and measurable goal is all about knowing how many of something happens according to a certain standard (often stated in terms of time). But the good news is that much of the information needed to evaluate performance can be collected automatically. Here are some examples:

  • A driver log for professional truck drivers can track the number of miles that an employee has driven in a certain block of time and provide real-time updates on miles to go and any violations the driver has accrued.
  • Review metrics can report on a customer service agent’s customer-abandonment (hang-up or disconnect) rates as well as hold and total call time. If certain agents are consistently referring calls to a manager, the metrics may show a need for continued training.

To evaluate qualitative (non-numbers-based) goals, consider asking peers in the department to weigh in on an individual’s performance. Using information about how employees feel about their own performance and that of their peers may help identify problem areas, departmental strengths and weaknesses, and other data that doesn’t track easily on a quantitative scale.

Succeeding with a plan

Progress toward a new goal may seem slow, but removing personal preference and other subjective measures from assessments levels the playing field and ensures that the most deserving employees are rewarded.

Danielle M. studies marketing and supply chain management at the Kelley School of Business in Indianapolis, IN. She is a firm believer of Lean Manufacturing principles and lives for standardized processes. In her spare time she blogs about local music and takes care of her puppy Elwood.

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The Product Management Perspective: The SMART system will help you manage your products more effectively. The more specific you are about your products’ goals, the better your team members will understand their role. Focus not only on building great products, but also on ways you can measure your progress more accurately.


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Leading the positive impact

New ideas for product features and functionality come from many sources: customers, analysts, non-customers, sales reps, developers…the list goes on. Product managers carry a huge responsibility for gathering and promoting the right requirements for their products at the right time and for the right reasons. An important goal of product managers is to make a positive impact on the success of their products. They are in a key position to bring together the right market and strategic information to assure the products’ success.

To lead out in this effort, product managers must have a plan for gathering, sorting and measuring the multitude of requirements that come at them. Managing these activities can seem overwhelming. However, it can also be the most thrilling part of job. Here are a few tips on managing the details and leading the positive impact:

  • Know your customers: Spend adequate time learning how your customers (and non-customers) do business. Spend time listening to them and observing how they use your products. It takes time and money to meet with customers, but the end results more than pay for the up-front cost. If you’re feeling pressed for time or your not sure about the value, here are three reasons to visit customers.
  • Leverage requirements management: Gathering and sorting requirements can be time consuming and costly. Fortunately new and excellent tools have emerged to help product managers deal with the myriad of data they must consume. I found a great article by René Bellei, CEO of Ryma Technology Solutions. He makes many great points (I recommend the entire article to your reading) about the need for sound requirements management. One point that really caught my attention was cost savings that come from sound practices. He says:
The costs of rectifying poor products lie not just in the cost of re-development, but in the loss of market confidence which can result in lost sales, client references and overall profitability. By involving a broader set of stakeholders in the software product management roadmap and by establishing a solid product management process, many of these revenue and cost effects can be addressed and avoided at the onset.
  • Measure the impact: To fully comprehend the success of new products or features, product managers need to evaluate the significance of proposed changes and measure the impact the changes have on existing customers, sales to new customers and customer retention to name a few. Jeff Lash recently wrote a great post on the need to measure the impact of product changes. He cites four steps product managers need to go through before engaging in product development. He also anticipates reasons why product managers might resist measuring the impact and counters them with the reasons why good practices will save both time and money. He states:
Though this may seem as though it is creating more work for the product manager, it in fact will make his or her job much easier. Product managers need to be able to quantify “success” for any given change, rule out changes that are less likely to be successful, and measure all work which is implemented. This allows the product manager to ensure a higher likelihood for success and also show the impact of the change to gain support for future changes.

Product managers possess both the opportunity and the burden for their products’ success. Those who focus on the opportunity and lead the effort using proven tools and techniques will find success and satisfaction.