Oct 14

PM Tools Should Help Us With The Hard Things We All Do

What are some of the annoying, hard things you have to do as a product manager? Here are two common situation from my experience. I wish the PM tools out there would step up to helping me do these more easily.

I sometimes get features that are only partially implemented, with respect to the original story or requirement. If the tool automatically understood in its guts that a requirement can be partially implemented, and that it might need to be decomposed along those lines so the remaining parts of the feature could be implemented later, it would be a big help. Perhaps a wizard that guided me in decomposing the requirement. It could ask questions like ‘is this requirement 100% completed?” If I say “No,” then it asks “Is it partially completed, and if so, what part? What’s the value proposition of that part?” “Do you want to take any of the existing requirement and turn it into a new requirement for implementing later?” And so on.

Of course, I want the tool to maintain the relationships in the process. E.g., the new requirement should be related to the original, probably with an “Enhances” relationship. Or it might be a “Delighter” relationship. (Because what didn’t get done is usually the “nice to have” portions, not the “table stakes” portions.)

Another thing – I need to write a datasheet entry for the feature, or a release note. Why do I have to go to Word to do this? Why doesn’t the tool have a place for the datasheet blurb related to this feature? And then the ability to write a draft datasheet based on these entries for the features implemented in the upcoming release?

I have to do these things anyway, and often I just try to do them in my head, which means that the next thing that I have to pay attention causes this one to drop on the floor, which means I have to rediscover it later, at a great cognitive cost. Since I have to do it anyway, let’s have the tool become the capture spot for it – which means it needs the right semantics to capture it, and it probably needs to remind me that it needs to be captured, because after all, “I am a product manager, big of head, and I will remember.” Which I won’t, really.

Sep 14

Is Your Lack of A System Of Record Leaving You In the Stone Age?

I have done a bit of guest posting lately, and this week’s entry is about a new essay on Mike Smart’s Product Management 2.0 site. As long-time readers know, I’m a proponent of getting product management into the “big leagues” with better tools, and particularly, with a good system of record for the full lifecycle of product management. “System of Record: Why You’re in the PM Stone Age Without One” puts a stake in the ground about what product management needs to insist on to become a modern business process.

Almost no company has a legitimate system for product ideas and input, or front-end customer interactions (i.e., interviews, ethnology, market discovery and research). Likewise, typically there is no system of record for product marketing (i.e., value proposition, benefit statement, go-to-market plan). Instead, all of these are stored in various spreadsheets and documents, but not tracked or managed.

The benefits of tracking all the information related to product management – from customer interviews, to market analysis, to competitive positioning, to roadmaps, to the value proposition, to the go-to-market plan – are immense. They range from the obvious, like transparency and collaboration, to the subtle, like the fact that product managers have more time and attention to spend innovating and learning about market problems to solve.

I’ll be following this essay up with a post on this site about how to build a real system of record, even if you don’t have all the tools you’d like.

In the meantime, take a look at System of Record: Why You’re in the PM Stone Age Without One.

Sep 14

What Is The Business Value Of A Product Manager?

I have not been able to find an answer to the question “what is the business value of a product manager?”

So, I did some arithmetic, and here’s what I came up with:

A product manager is worth between $5 and $10 million of annual product revenue.

That’s an educated guess, a stake in the ground, a challenge to you.

Simple Ratios

I arrived at that value working bottom up using familiar financial ratios from software product companies:

  • The normal ratio of development resources to revenue is roughly one developer per $1 million in revenue.
  • The normal ratio of product management to development resources is one product manager per 5-10 developers.

Combining those ratios results in one product manager for every $5-10 million in revenue.

I’ve taken a leap and assigned this as the business value of the PM – if you hire a product manager, then you are looking toward increasing your revenue by $5-$10 million annually.

Raises Questions

Once you put a stake in the ground about the business value of a product manager, you can ask interesting questions.

If you are a product manager, you can ask:

  • How well am I doing? Is what I’m doing going to result in $5-10 million a year in new revenue?
  • How much would it be worth to the company if I got 10% better at my job (answer: maybe as much as $1 million).

If you manage product managers, you might ask:

  • What’s the return on investment if I help my product managers become 10% more effective, and it costs $10,000 per product manager? (Answer: pretty high!)

And here are two questions for you:

  • Does this analysis make sense to you and is it valuable?
  • Do you have a top-down analysis – to go with my bottom up calculation – for the value of a product manager?

I’m curious to see how this conversation ends up. I believe that putting software product management on a concrete business value foundation could be transformative for the profession.

What is your take on the business value of a product manager? Does this concept make sense to you? Do you think my figure is correct? Way off? Unmeasurable? Let me know.