Owning Product P&L

This is often a highly debated question in the product management community. Should product managers own the P&L of their product? The answer is simple, it depends!

Here are some of my observations on the subject:

• Authority - Most product managers don't have the authority to truly own P&L. Most of us don't have the product development headcount or other associated costs under our budget. Many product managers don't want that authority.
• Time - Many Product Managers are torn between the day to day work of product development, supporting marketing, sales enablement, etc. that monitoring product P&L falls to the wayside. We just assume that the pricing is "good enough" or that someone else is monitoring how much our products cost to develop, sell, market, or support.
• Organizational Structure - Does the organizational structure lend itself well to a single person owning the P&L. I have seen this work when the company is organized into distinct SBUs or SBUs. The General Manager of that SBU would own P&L, budgets, etc. and their P&L would roll up into the companies P&L. Ask yourself, who owns the P&L for your product. It's ok if it is not you, as long as someone does.

Recommendations

• Create a basic excel dashboard that has the basics and some charts that can printed out on a single page. I use a 3x3 grid for a total of 9 charts that monitor things like bug count, internal costs breakdown, revenue, key usage stats, other costs, etc. Having a dashboard like this goes a long way when someone asks about your product and you can instantly respond with a detailed dashboard. How many of us have had to scurry to find information when someone asks. Be Proactive!
• You may not have access to all of the data you need to create a 100% accurate P&L. That's ok. Approximate. It's ok if you call your P&L an "Estimated P&L". Guess, ask, do what you can. Most of your assumptions are probably not too far from the truth and if they are someone will inform you otherwise :)
• Share your dashboard. Many products may have a weekly team meeting. Perhaps at the first meeting of the month you can share your estimated product P&L for the previous month. Just seeing it goes a long way! 

Just some thoughts. Let me know what you think!

My Experiences with Great Leaders

In my career, I've noticed it has become easier and easier to separate the great leaders from the average leader. I've spent some time thinking about what traits they had in common in an effort to learn from others.

Here are some traits of great leaders:

• Collaboration - Great leaders understand that there are always competing priorities and product development requires the alignment of many disparate teams. I've noticed that they always have the ability to truly partner with others rather than throw dependencies over the wall and down the hill so to speak. Who wants to be on the other end of that? No one! Great leaders know that and work to partner and collaborate on planning and execution to drive results.
• Respect - Great leaders earn the respect of others. Don't be fooled by titles, titles don't mean you have earned any respect. The best way I've experience to earn that respect is to deliver results. Say what you are going to do and do what you said you would. Communicate and listen!
• Level Headed - We all hear about the famous CEOs who bang their fists on tables and cause a lot of angst among the whole company. Or the project manager that snaps at someone who misses a deadline. Great leaders know that there is a bigger picture and how you handle tough situations says a lot of about your character.

Every time I write a blog post like this I feel like I'm saying the obvious, but then I read other professional blog posts and I always think that their content is also pretty obvious. So I thought I'd also include some of these observations and learnings.

Enjoy!

Never forget the product demo

Sometime we build great products that don't demo as well as they should.

Here are some thoughts I have about the demo:

• Understand your product - I know this sounds pretty basic, but you would be surprised how the lack of preparation can quickly become apparent. Know your value proposition! You have to have objection handling down pat, you should know where you are different from the competition so that you can hit home some key points. Be prepared to answer pricing questions. Walk through the demo both mentally and with the product. Practice, practice, practice!
• Understand the demo viewer - Most of these viewers (depending on where you are in the sales process) are either getting an introduction to your product and trying to gauge/compare the value of your product vs. the competition. They are typically not interested in every single detail of your product. I typically like to get to know the demo viewer a little bit by asking them what they do and what they are interested in learning about. Is the viewer the key decision maker, an influencer, the user, etc. Tailor the demo to the demo viewer. As a product manager, I also like to inquire about the viewer's perceptions of the product. What do they like and not like? There is a lot of information to be found in these nuggets of information.
• Build a product that demo's well - Sometimes products are too complicated with bells and whistles that can confuse someone who is looking to make an initial impression about the product. It is as if your product has all the features of every power user, but it somehow can't convey its value to majority of non-power users. For example, instead of just a plain "Open" option, you can add an "Recently Opened" option. This would make the demo pretty easy and minimize steps that waste precious time. Also, be aware if you need to incorporate some dummy data? Be mindful, of how credible the data looks and how well it will look when demo'd.

Just some thoughts...any tips from my readers?

Competitive Analysis

A lot of product managers jump at the chance to take a look at the competition and attempt to glean information to guide the product roadmap. Here are some of my experiences:

• Intelligence vs. Analysis - Many new product managers will just gather information and present it to the executives. This is competitive intelligence. This is only the beginning. The analysis part of the equation involves deriving meaningful conclusions based on the intelligence.
• Defining your competitive set - This is often times glossed over. Who do you think your competitors are and what do your customers think? A good idea is to monitor your win/loss analysis for this information. Also, if you want to move into a new market segment, you may want to start including those competitors as well in your analysis. It may give you some insight on when you are ready to compete!
• Quantitative Analysis  - Both types of competitive analysis have a lot of value. I have used a weighted VRIN analysis giving each feature a score of importance and competitive differentiation. I value the "V" a bit higher than the "RIN".  I then score each competitor on a 0 to 1 scale (think harvey balls) and then derive a score for each competitor. This is helpful in determining where you stand relative to your competition. This is the "You are here" on a map. While this may seem a bit heavy on the Intelligence side of the equation, it is not. The weighting of the VRIN values comes from understanding and analyzing your target market segment. It is a bit more qualitative.
• Qualitative Analysis - Once you have done the Quantitative work. It's time to look at where competitors position themselves. My favorite tool of choice is a perceptual map. These are especially helpful if you can compare snapshots in time. Do you see a competitor moving in a particular direction relative to historical information? Is there an opening for you?
• Don't Blindly Follow the Competition - Sometimes the competition is just as clueless as you are. Some competitors like to develop a lot of features without understanding the target market and their core needs. This "blanketing" of features is in the hope that enough of their target market is pleased by enough of the features for the work to deliver an ROI. If you analyze this type of competitor it is easy to fall into the trap of thinking that the market is heading in a particular direction because this competitor is building a specific feature. Remember, sometimes your competitors don't always have strong research, so don't be too eager to follow them.

There is a lot of information here and I blogged this as a simple introduction...more to come soon I hope!

Pricing your products - Some Key Players

Pricing - It's one of the hardest challenges that face a product manager. There are many typical pitfalls you have to carefully negotiate depending your company. This post is not about how your price your feature, but rather about getting to a price.

I'd like to share a couple of that I have had to deal with in my past:

• The Finance Folks - Your most important friend - The finance team is your most important ally, that is until they figure out how much your product/feature cost to build and then just add their desired gross margin target to it and tell you what the price is going to be. Ultimately with many small companies, it is the finance team that really drives the pricing to ensure proper company valuation and key metrics. My advice to you is simple, partner with Finance and work with them. They can help you learn more and if they don't "bless" the pricing, the pricing will not get approved.
• The Sales Team - Listen Carefully - The sales team is typically the most connected with customers, they understand the nuance of pricing including how the buyer and user personas will react to pricing. They can help guide both business model and pricing decisions. But tread lightly, sometimes it is Sales' best interest to have as low as price as possible. Understand that profitability is not always their most important goals, sometimes the lower the price the better. This is especially true if they are used to selling a non-differentiated product.
• The Competition - Be Wary - First and foremost, know your competition! What are their target markets and key customers and how does their pricing "match" their goals/markets. You'll need to understand how your proposed pricing fits in the market in a way that can help differentiate your product. Also, be mindful of the "rivalry" of your market. If the market is very competitive and crowded, be careful how your pricing will cause your competitors to respond.
• The Brand - Be mindful - Pricing causes pretty strong emotions. Do you want to be the low price product (e.g. Dell) or more niche and differentiated (e.g. Apple)? Think about the emotion that you want your prospects to feel when they see the price for the very first time. Price is perhaps the most powerful emotion generator and plays a major role in defining your brand. Be mindful!
• The Reality - Leadership Time - You are going to have balance many differing and competing "forces" and opinions. You will not please everyone. Everyone is a cook and you have to somehow run the kitchen and create good food. Realize that you will have to cooperate and collaborate. Time to put your leadership skills to the test and listen!

Good Luck!,

Peter Ghali

Target the Customers You Want!

I've been doing some recent roadmap work (You should continuously update your roadmap!). In many cases the product your company offers targets more than one market segment. How do you meet the needs of all your customers? Here are some ideas/tips:

• Understand how the market is trending. How our your target markets evolving? For example are your users trending towards increased sophistication or starting to desire an easier solution to use? Is the pace of the change in your target market segments fast or slow?
  
• What is your release schedule? If you have very frequent releases you can spend more time worrying about the needs of your current customers in your next release. If your release schedule is much longer, you'll need to really understand where the market is headed and try to "lead" the market (much like you have to lead a moving target when shooting at it)
• Think about how you can develop a feature for all of your target market segments. For example you can build a feature for your "power users" and then in the next release you can educate your "average" users and provide them a simpler/easier to use version of the same feature?
• Think about monetizing your investment. Perhaps your "power" users are willing to pay for a feature they find valuable, but many of your "average" users may not find that feature useful? Perhaps it is the other way around...your "power" users may expect the feature as part of the product and are unwilling to pay for a feature that your competitors offer for free. However to your "average" user, they may be willing to pay to use it.
• Look at where your revenues/profits come from - Is your product revenue trending a certain way by market segment. Perhaps your "power" users account for a small percentage of your customer and large percentage of your profit/revenue? How will that affect your decision to target the right market segment?

This is a pretty complicated subject...just some thoughts on how you can Target the Customers You Want!

Keeping Your Product Management Job

The Positive Leader

So a key lesson I learned this past year was to try and be more positive. I often times focus on areas for improvement with our execution to the point of not being as good of a leader as I can be.

So here are a couple of things I do to try and be more positive

• Opportunities present themselves to focus on how much has been accomplished. While the obvious one is a sprint review, I like the longer term of the annual or half-year review. I like to look back and ask myself "At the beginning of the year where was our product vs. where it is now". Doing that definitely gives me a sense of accomplishment and focuses more of my energies to making the following year better.
• Take your mindset out of the very short term that frustrates you and focus on how it will work itself out over the next week or so. Trust your team to work through it!
• Switch gears a little bit to get our mind off of something. I like to work on several things at once, so a switch to something more interesting or fun and can help me refocus a bit.

You have to remember that your mood and emotions are contagious. Be a leader and be positive. Don't sugar coat, don't be blind to areas of improvement...be constructive and move on to the next challenge!

The Art of Meetings

So this is a new year and while I don't like New Year's resolutions, I do think it is important to think about being more efficient with your time. I like to ask folks, describe your typical work day...for many folks the days are filled with endless meetings. So many meetings that folks bring their laptops to work during the meeting because they can't do their jobs while the meetings pile up.

So here are some of my tips for running a more efficient meeting. Obviously these rules vary a litttle bit depending on the type of meeting (e.g. project update, decision making, communicating, etc.)

• Use an egg timer - The loud sound it makes will wake everyone up and keep everyone on time. Discipline is the name of the game here. I had a professor once who used one for our presentations. Needless to say after the first round of presentations they all suddenly were done early or on time. Pavlov at its best!
• Start on time - The purpose of this is two fold. One, starting on time makes its easier for you to finish on time. Secondly, it helps instill a sense of discipline. People will start to feel embarassed when they walk in late. They will realize that your meetings are different. If they continually come to your meetings late, let them know in a private conversation that this is hurting the meeting and their presence on time is helpful. If it continues, stop inviting them.
• Help everyone be prepared - 90% of being succesfull is setting expectations. Use an agenda to set those expectations with key inputs and outputs clearly defined. By defining inputs you are letting the attendees know what it is needed from them before they come to the meeting. The Agenda will describe what happens during the meeting, and the outputs describes the success criteria for the meeting.
• Note who is not prepared - Let them know that you noticed that they weren't prepared. Also let them know how important it is for folks to be prepared in helping drive towards the output. Be tactful. If they continually aren't prepared, don't invite them.
• Finish early - This is the MOST important rule. People will leave your meeting with "free" time. They will leave feeling they accomplished something and with the illusion that they have more time.

Remember, be tactful and artful. There is a science and an art to running meetings. Know when to apply each side of the equation to make your meetings more successful. Here is another helpful link.