What is a Product Management Audit?
A product management audit is a complete, objective review of a company’s product strategy and product management processes. Each aspect of the product strategy and process is numerically rated to identify areas of weakness that would benefit from improvement, as well as any areas that are completely lacking. By using a numerical rating instead of a binary one, progress and improvement over time can be tracked and measured.
Product management audits can be performed in-house, however it can also be outsourced to a number of consulting firms or independent experts. Bringing in a third party to conduct the audit has multiple benefits:
- Objective, unemotional observation and analysis
- Availability of best practices, benchmarks and previous experiences for comparison
- A professional summary report and presentation
However, hiring an outside consultant will definitely be more expensive than an internal exercise and might be more time consuming due to a lack of institutional knowledge. If a company chooses to conduct its audit internally, it should follow industry-standard playbooks and properly empower the individuals conducting the audit to thoroughly interview relevant staff, document procedures and provide frank and honest feedback to the organization.
What is the Purpose of a Product Management Audit?
The audit’s goal is to quantifiably measure how well the organization is doing in three main categories: Understanding the Target Market, Addressing Customer Needs and Creating Product Requirements. All three of these areas are often taken for granted—particularly the first two—since the whole point of the company is to make money and sell products that address the needs of the target market, and most companies think they’re doing just fine in that department.
But while those matters may be clear at a high level, things often break down when given a closer look. L. Kurt Reiss, author of For Product Success, advocates audits that evaluate the actual facts (what is known vs. assumed), the company’s confidence in being able to deliver and a clear understanding of who’s responsible for what for the target market, customer needs and product requirements.
Each measure of each category is quantified, based on an overall average (i.e. we’re 75% confident that we understand the target market) and the “f-score,” which is essentially the weakest link or lowest individual score. So, even if the company overall is 75% confident, if the head of sales is only 20% confident then you’ve got a problem.
Highlighting these outliers can shed light on problem areas that might otherwise be skipped over. Even if the company’s employees on average feel good about things, if any individual part of the organization has an issue, it still must be addressed.
A product management audit can also unearth disproportionate time allocation that doesn’t match a task’s relative importance to corporate strategy. By examining how product managers are spending their time they can unveil inefficiencies or mismatched priorities.
When an audit is complete, an organization can walk away knowing where they need to improve, what critical steps, procedures or documents are missing, as well as whether their staff is being optimally utilized given their overall strategic priorities.
What is the Product Management Audit Process?
One of the most important aspects of the product management audit process is that it doesn’t just involve the product management team. While they are certainly key contributors, it is truly a 360-degree review of product strategy and product development. That means that representatives from the sales team to quality assurance to customer support should be participating, because the items being audited impact all of these departments.
Like all projects, the audit should begin with a kick-off meeting, including the auditor(s), executive sponsors and stakeholders. This meeting should clearly communicate the purpose of the audit and that full participation is expected from all relevant departments. It should also set the tone that while this audit will undoubtedly uncover and identify shortcomings in the current product management process, this is an opportunity for improvement and not assigning blame or fault.
The next phase is a documentation review, where the auditor should be given access to all relevant documents and tools used in the product management process (both templates and actual work product). This is the forensic stage of the audit where the auditor can cross-reference what exists vs. what should be in place.
The third step is interviewing staff. These interviews will mostly be conducted one-on-one between the auditor and each relevant staff member, which will encourage participants to be as honest and open as possible as well as allowing the interview to get in-depth on the related topics. A key to the interview process—which can be augmented with written or online surveys—is asking all participants the same questions to rate the effectiveness and quality of different parts of the process. These individual responses will be critical to the final ratings and can drive prioritization for areas of improvement.
Next, the auditor will aggregate the results of the reviews and interviews to compile their findings. The final report can be delivered as a presentation and/or as a written document, but both formats will contain the same information. The goal of the report is to score every single element of the current product management situation so gaps can be identified and weaknesses addressed.
The official process can conclude with a workshop where the results are reviewed in a group setting with all relevant stakeholders. Based on the called out deficiencies in the current process, action plans can be developed and tasks assigned to improve things. The final item on the agenda should be determining when the next audit should be conducted so progress can be measured and new opportunities for improvement can be identified.
Of course, the real work begins after the audit is completed, as the product management organization and other parts of the company do the work to truly change things. These tasks should be prioritized by the executive team and department heads to ensure “day-to-day” work doesn’t eclipse the needs called out during the audit.
A product management audit is more than just a checklist to see what items an organization has in place and which it still needs to implement. While it can certainly identify specific missing components in the overall product development process, it is far more valuable in assessing where parts of the current process are breaking down and producing less-than-ideal outcomes.
But, like any analysis, the real value comes from what you do with it. A product management audit is only as valuable as the changes it inspires and the focus it brings on improving the process. Any company undertaking a product management audit should be committed to assigning the necessary resources to “fix” what’s not working and to conduct a follow-up audit to measure the progress made in the interim.