If you want stuff done, start measuring it.

This is the advice often quoted in business books. The theory goes that if you want product managers to do something, start measuring it and they’ll start delivering.

And most product managers have an annual appraisal. They are reviewed against a set of objectives agreed in the previous year. Tools such as 360 feedback* and competency frameworks are used to get a sense of how they are performing.

But because an appraisal only happens once a year, you often find the business has changed so much that the original objectives just don’t make sense! So this blog focuses on things that can be tracked on a monthly or quarterly basis.

But what should you measure for a role that has such broad responsibilities?

One approach is to select metrics that focus on outcomes. Revenue targets, profitability and customer satisfaction all come up in our annual survey of product managers. The problem is that they’re all lagging indicators. They measure the results of actions that the product manager (or their predecessor) took months or years earlier. We learn too late when things are going wrong. That can mean an endless cycle of fixing and firefighting that takes time away from good planning and strategy implementation.

One way to avoid this is to work out which product management activities will help the business hit its objectives in the future and to start measuring these leading activities.
What you choose to measure depends on the nature of the product management role. Is it primarily a strategic role – scanning the market and guiding the direction of the product? Or is it a more operational role – dealing with day-to-day issues and handling queries? Most roles will be a combination of the two.

A typical leading metric for product managers with a strategic role is to make sure they do monthly reviews of the product roadmap. This keeps their focus on future planning and responding to market changes. Another good one in B2B is that they have at least one meeting a month with a key customer. This ensures they get a regular flow of feedback and insights. Finally, getting product managers to present at conferences or internal sessions once a quarter also makes sure they are ‘on top of their game’.

For the product manager with a more operational role, leading metrics will typically be based on improving efficiency, effectiveness, quality or speed. Metrics might include making sure they spend time each quarter training the support and sales teams to help them stay ‘on message’ when talking to customers. Measuring bug levels once a month can track software quality which has a knock-on effect on customer satisfaction. Checking each quarter on the number of customers actively engaged in testing, pilots, and trials makes sure there is sufficient customer involvement in the development process.

Another useful leading metric in B2B is the proportion of customers taking the standard proposition rather than a customized solution. Customized solutions tend to be more costly to support and therefore less profitable. And also, if customers are choosing the standard proposition it shows the product manager has a good grasp of what the market wants.

There is no cast-iron guarantee that focusing on leading metrics will result in success but if you pick the right ones, they are more likely to drive successful outcomes more quickly.

One question that comes up in any discussion on metrics is “How many should we have?” On our training courses, we’ve had delegates who have none (“My boss knows if I’m doing a good job”) to more than 30 (“We’re a multi-national business with complex processes”).

In our experience, it’s best to have 2-5 Key Metrics against which performance is measured. If you have more than this product managers tend to lose focus on what’s important. If necessary, roll-up others into these key metrics. And don’t be afraid to change them. If a product manager is doing well in one area, swap in a metric for another area that is underperforming. You can still track the previous one through discussion and anecdotal feedback.

To return to our opening question, how do you measure a product manager?

It depends on their role and your context. You need to understand the goals for your business to work out what product managers have to do in order to deliver. But you will almost always want a mix of leading and lagging metrics to complement the annual appraisal.

Andrew Dickenson
Director, Product Focus

* 360 feedback is a process where peers, subordinates, and colleagues from other parts of the business are all invited to give feedback about a product manager’s performance. The feedback is then combined together to build a full and rounded picture of how the product manager is performing.

 

Share this page

Join the conversation - 5 replies

Avatar

Hi Andrew,

I think it depends on what / whom you are measuring: it is the product, the person or both?

As an example, measuring bug levels is generally associated with the Development team, though in Agile the ‘team’ has joint responsibility for quality.

Additionally, bug levels per sprint or release rather than per month, I would suggest, is a more accurate way to measure and track progress in the hihgly prized goal to achieving zero new defects per sprint / release.

Regards,

Martin

Avatar

Hi Andrew,

I must admit, as usual I was very impressed with the level of insight and simple, achievable, practical advice on the matter.

My role involves both the strategic and operational aspects to it and our company has a yearly appraisal process, too much stuff going on to do more. Not ideal though for having a clear set of measurable targets!

I will definitely push my manager to start implementing some of these ideas!

Thanks,
Raul

Avatar

Hi Andrew,

Could you give more examples on the metrics that could be used either for strategic roles as well as for operational roles?

Thanks,
John

Avatar

Nice article!

But I’m spotting a specific challenge in this area: How does an organisation incentivise product sustainability, over short-term gain?

It’s really easy to measure Product Managers/Owners based on product adoption rate, revenue, profitability etc. (though it may not always be fair!) but what if I want to make sure they don’t take shortcuts now, which will create product pain in 2, 3, 4 years …. when they might not even be around to pick-up the pieces?

A great example is technology debt. e.g. If a PM signs-up to a discounted software platform, but it them locked-into escalating costs, they are still likely to be rewarded in year 1. And then they might leave, or switch roles.

Avatar

Thank you. Glad you enjoyed it. That’s an excellent question and a common challenge in product management. Balancing short-term gains with long-term product health is important for both the product and the organization. Here’s a few ideas to incentivize long-term over short-term gains:

Set Clear Expectations and Discuss: As a product management leader, set clear expectations with your team that you’ll view their performance through both short-term gains and contributions to long-term product success. Regular check-ins and open discussions allow you to explore their key decisions, provide guidance, and ensure they are considering both immediate objectives and future product health.

Long-Term Performance Metrics: You could tie long-term KPIs into the evaluation of Product Managers, such as customer retention rates, product quality over time, technical debt reduction, and total cost of ownership. This ensures accountability for the product’s healthy future.

Technical Debt Visibility: Make technical debt measurable and visible within the organization. Assess and report on it, tying its management/reduction to the PM’s core responsibilities.

Incentives: Find ways to link compensation and rewards with long-term outcomes. Consider deferred bonuses or stock options that vest over several years, encouraging PMs to think beyond immediate results.

Regular Audits / Reviews: Conduct periodic reviews of product decisions to assess their long-term implications. This can help catch potential issues early and adjust course as needed.

Good luck!

Leave a comment

Your email address will not be published. Required fields are marked *