How To Measure Product Management Success
Product management is a discipline that is hard to measure. PMs are equally into tech and management — it requires more soft skills. Product managers collaborate, communicate, collect feedback, and create valuable products by ensuring that their team members are on the right track.
However, this is problematic if you want to judge the work done based on numbers. It’s not like sales or marketing, where you can see the results in measurable units and compare one employee’s performance to another and determine who is doing a good job.
So, unlike a salesperson, the product manager does not have a distinctive number to point out and demonstrate his effectiveness. To make matters even more complicated — unlike sales, where only a few variables are involved, many of which are internal — product management deals with far more variables. And the majority of them are external, such as market trends, the current state of the economy, and how other team members are performing.
Because a product manager isn’t in charge of writing code, testing products, marketing, purchasing, or actively selling their product, all of these activities take place following product management. However, poor performance by those in charge of mentioned jobs can impact whether the product meets, falls short of, or exceeds expectations.
In addition, because a product’s effectiveness depends on the actions of so many other professionals, evaluating a product manager’s performance must be limited to what they are responsible for and have influence over.
So how do you measure product management success?
We have to let go of the numbers — product management is different, and we don’t need numbers here. The success of a product manager is closely related to the value he adds not only to the organization but also to society. To clarify, consider two general guidelines for determining a product manager’s success:
- The value a PM brings to the customers, and
- The value a PM brings to the organization.
The value for the customers
The fundamental success measure of a product manager, regardless of the industry, is the ability to understand, perceive, and capture the users’ problems. A great product manager will see the end-user perspectives and deliver the most feasible solutions for them.
Clients determine the success of any business. They’d be out of business and out of money. That is to say, to succeed, it is critical to put the needs of clients first. This involves going above and beyond standard customer service. Building a customer-focused culture is the most effective way to achieve excellent customer satisfaction while still meeting corporate objectives.
Thus a product manager’s ability to understand and bring value to his customers should be evaluated to know how well he is doing.
The Value for the Organization
Organizations exist to make a profit, and the product manager’s job is to maximize profits through customer satisfaction. A product manager’s job is to increase the organization’s market share through the product, not through marketing gimmicks.
Product managers have to be concerned with operational and financial goals in an organization, such as speed-to-market, launch, adoption and repeat usage. This results in more revenues, higher margins, and lower expenses. To accomplish this, the product manager must conduct extensive research before developing and launching a product. This includes:
- Studying the market.
- Predicting market changes.
- External as well as internal factors can have an impact on product performance, competitor product and strategy, and so on.
Qualitative measures of product manager performance
The mentioned guidelines are quantitative in nature (not purely in numbers), and they indicate how well a PM performs on a fundamental level, which is to add value to the customer while making a profit for the company.
However, there are other factors to consider when determining how effective or successful a product manager is. Therefore, here are some qualitative factors that are outside the scope of the job description.
A Product Manager has to be a visionary
For a product manager to be successful he has to be a leader. Perhaps a leader with a vision for the future.
A product manager’s vision must be broad because they are responsible for the product and how it affects the consumer’s life. This overall vision is essential to the company’s success. It’s a powerful trait to have because a great product manager’s vision has the power to alter the course of history. Everything changes if a product manager truly believes in the product and has an idea to help customers. Steve Jobs and Elon Musk are two of the best examples of this phenomenon.
The Art of Communication
Perhaps one of the most important soft skills in product management is communication skills. A PM must be an excellent communicator. Excellent at not only explaining ideas to peers or upper management but also understanding customers and team members. In the long run, the clarity with which a product manager communicates can save a lot of ambiguity and waste of time and other resources.
More associated traits include:
- Detail-oriented communication
In other words, a product manager should be regarded as a team player who adds value and professionalism in all areas. Moreover, these guidelines can aid in the development of a general framework for determining a product manager’s success.
Domain expertise: A product manager’s understanding of the market and product area is a big reason they are in an organization. Product managers must be familiar with their clients as well as the industry.
Business knowledge: Product managers are occasionally referred to as the product’s CEO. A product manager should have a thorough understanding of the business model to ensure the firm’s profitability and market share.
Functional ability: Product managers must be able to delve into the numerous nitty-gritty aspects of product management, such as establishing part numbers or keeping a spreadsheet up to date. Although a product manager can delegate these responsibilities to others, the accountability remains with the product manager.
Measuring product management success is different.
Measuring a product manager’s success is a difficult task, and it all boils down to what a PM brings to the table. Of course, a product manager is responsible for a product’s success or failure in the market — and the ability to capture market share should be evaluated. At the same time, relying solely on numbers is not a comprehensive approach. Because product management is a domain in which everything matters. Al the points mentioned above will assist in evaluating a product manager’s success from a holistic standpoint.