What Does Strategic Misalignment Look Like (& How Can Product Managers Avoid it?)
For a product professional guiding the work of a team, strategic alignment should be the holy grail. Achieving it won’t be easy. To get...
Product management is a role largely comprised of soft skills and strategy, which, at first glance, would make it difficult to quantifiably measure. But for a job that is all about moving the needle on key corporate metrics, there must be some way to measure their performance and put a number on how they’re doing, right?
The benefit of including quantifiable metrics in evaluating a product manager’s performance is, well, immeasurable. When someone tells you “do better on that” or “improve on this” it helps to know where you’re starting from, and it’s even more helpful to know if you’re making any progress.
But when everyone is talking in vagaries and relying on gut feelings and general impressions, it’s difficult for an individual to really know what they should be doing—and it’s even harder for their manager to provide solid, actionable recommendations. That’s why it’s critical to apply the same numerical thinking to managing staff as you would for a product.
When it comes to sizing up their performance, salespeople might be the easiest group within an organization to deal with. You know how much they sold this period, how that compares to the previous one, how it compares to their peers and how it compares to their targets.
Because sales are SO measurable they have actual numbers to hit and their compensation is usually directly tied to their job performance. It’s the ideal situation for measuring performance.
An easy corollary would be to apply that same rationale to product managers—they’re the “CEO of the product,” so if the product reached the metrics the company set out then they’re doing a great job, and if not, well, it must be the product manager’s fault. But this is highly unfair to the product manager because so many things are beyond their control.
A product manager isn’t writing code, testing products, creating marketing pitches, buying advertising or actively selling their product. All those things happen downstream from product management, and poor performance by the people handling those tasks can impact whether the product measures up to expectations, falls short or exceeds them.
Sloppy programming could sink usage while an overachieving sales team could goose adoption. Not to mention the fact that product managers are sometimes given ownership of products either on the decline or still trying to find product-market fit, with their fates largely predetermined before the PM writes their first user story.
Given that a product’s performance is at the whims and mercy of so many others, the measure of a product manager’s performance must be limited to what they as an individual are both responsible for and capable of influencing.
Numbers aren’t everything, and how a product manager is perceived by others goes a long way in determining their performance. There are many opportunities to collect this qualitative and anecdotal feedback, you just have to be willing to ask for it (and always be listening for it in unexpected places).
As a manager, you’ll also need to solicit opinions about product managers from various sources. For example, how is the product manager being viewed during sprint retrospectives? Are they consistently praised or are they cited as a problem area? Are they proactively supplying great and useful information or are they a frequent hold-up in the process?
A full 360-degree review is often the best way to see just how effective (or ineffective) your product managers may be. As you speak with colleagues in development, sales, operations, customer service, and the executive team, you’re looking for positives and negatives related to the key traits that matter:
Your 360 degrees shouldn’t stop at the company org chart, either. Talk to some of the customers, strategic partners and vendors they deal with to see how they’re perceived by outsiders as well.
In short, you want your product manager to be seen as a team player that brings value and professionalism to every interaction, even when their manager isn’t looking over their shoulder.
Product managers are generally driven by operational drivers and financial outcomes—speed-to-market, launch, adoption, repeat usage, etc., that lead to increases in revenues, larger margins, and reduced costs. But so many variables can impact those outcomes beyond the actions of an individual product manager.
However, there are activities product managers can be expected to perform that will contribute to those overarching outcomes and are 100% within their control, such as:
“They require a product manager to get out from behind their desk and be outside-in focused, and the product manager can control them,” says Paul Young of Product Beautiful. “Activities are a sufficient proxy to measure a market-driven product manager to supplement product-level metrics and understand if a product manager is doing their job – without having to wait two years to find out.”
But this requires managers to do some homework, too. Working backward from the overall goals, they should set a clear cadence for these activities so there are set expectations that the product manager is measured against (instead of just telling them after that fact that they weren’t doing it often enough).
“It’s important to establish appropriate baseline benchmarks for measuring the success of product management teams,” says Satheesh Nanniyur of Salesforce. “For example: if you task a product manager with improving the availability of a system, help them to define the historical availability and expected results. This context is important in order to set realistic expectations on success criteria.”
Another product manager-specific area of measurement is specifically around requirements:
One measure that can be applied to nearly any job—and product management is no exception in this case—is meeting agreed-upon deadlines. Whether it’s delivering a requirements document or conducting a release post-mortem, asking product managers to commit to a date for certain activities and then tracking whether they finished things on time is a tangible measure that indicates whether they are responsible and conscientious toward the rest of the team.
Tying a product manager’s performance at least partially to the overall product performance is legitimate, even given all the caveats previously mentioned. At the end of the day, if the product isn’t hitting its top-level goals the product manager must share some of the responsibility for that, so basing a portion of their performance on product-level KPIs such as revenue, units, margins, on-time delivery and market share is fair, as is considering Net Promoter Score as a holistic-yet-measurable metric. But these should never be the sole measure of a product manager’s performance.
As soon as there is a numerical, measurable target to be reached, it’s human nature that employees will alter their behavior to hit this designated goal instead of taking a big-picture approach to the job.
“I’m hesitant to assign numeric goals to my individual product managers,” says Rich Mironov. “If I give bonuses for perfect requirements, I’ll get 100-page MRDs (instead of time spent with customers). If I reward pure revenue performance, my folks might spend all of their time on the road (and neglect next quarter’s planning).”
That’s why relying on quantitative measurement should only be a portion of how a product manager is evaluated.
Product management is also one of the most dynamic roles someone can play in an organization, and there’s a high likelihood that the existing plans and strategies when goals were defined will change during the year. If those priority shifts have diverted a product manager to concentrate on other areas and not hit their original targets, they should be praised for reacting and adjusting and not punished for placing their personal metrics above the company’s needs.
Hopefully, the corporate HR platform and policies can adjust to these on-the-fly moves and allow for retroactive updating of goals. If not, then a little more vagueness in the initial definition of measures can give managers the flexibility to reward their employees for doing the right thing.