Starting Out with Objectives
I’ve started implementing a set of key objectives and associated metrics with the product team. This is a fun process - especially since I have had the opportunity to take part in corporate-level planning with the management team for 2008.
This gives me the ability to do something very important - ensure everything is aligned.
Since this is happening within the company for the first time, it’s crucial that what’s setup is flexible but still effective. And the team is involved. It’s so important to remember that while you are a manager of a team, you aren’t a dictator - everyone needs to truly believe in what’s happening.
Plus, you’ll never slam dunk something like this on your own. It’s always better to gather feedback; especially if you’ve built a team the right way. Everyone will be smarter than you, so they’re going to be able to point out where you’ve mis-stepped and how something can be made better. But, I digress.
So, the question still stands: where to start with objectives?
It’s a pretty easy process really. To me, the thing that makes the most sense for a product team is to want to build market-driven products. That’s a pretty solid objective - ensure you are building market-driven products.
If it seems like this is too hard to measure, it’s not. While there are several checks and balances you could put in place, keep it simple. Remember, even if you aren’t in a start-up, you don’t want your team (or yourself, for that matter) to waste a bunch of time entering metric values for your ongoing management or Board of Director reports.
So, how can you tell if you are building market-driven products? While, first, you want to make sure the product can get customers and keep them - customer retention. If you can’t land customers it’s either a problem with Sales, product or both. Since we are talking about product management, let’s assume it’s a product-level issue.
However, it’s key to remember this isn’t all about killer features. If you are losing customers at a nasty rate, you can make sure of a couple of things:
- Has the product grown stagnant between releases?
- Is the market responding to product pricing?
- Is client support and/or implementation a concern?
- Are market needs being identified and met?
Now, market needs also include defects. If you have a slew of bugs, you may want to think about holding off on the new features for a while and do a bug release. It seems tricky, and maybe complex, but it’s not. Make sure if you find defects, especially those that are high severity, you’re fixing them. Make sure you’re gathering and paying attention to market data and implementing the right features.
The other metric you may want to consider is the cash flow of the product. You can ascertain this by looking at a basic product P & L. Is your product costing more money to develop than it’s bringing in? If it’s an intentional loss leader, than that may be OK, but if you are dumping tens of thousands (or more) of company dollars into each release and nothing is being yielded by customers in return, you can question the following:
- Is the product priced appropriately?
- Is the product positioned to take advantage of the right market opportunities?
- Are product release cycles taking too long?
- Is there a large number of high severity defects hampering product operation?
If people are buying your product, and you are bringing in positive revenue per release cycle, it’s addressing the right market needs. If this isn’t happening, and it’s not identified as a loss leader, it’s time to look at whether its positioned correctly, targeted appropriately, and being sold the right way and for the right price.
These are pretty simplistic, and I’m sure there’s a lot more than could be used. However, I’m a fan of the basics. If you want to be market-driven, make sure you can get and keep customers, and people are willing to pay for your product.
