How to Measure Your Product Team
If you run a product team, you will face unavoidable question that how do you measure your product team. This actually is a very hard question. First, the job your team is doing is usually not purely independent, and there are many many inputs and outputs. Second, there are some jobs that can be actually measure, and there are some that cannot. In the end, however, as a product lead, you have to figure out a way to measure your team’s output.
I am going to share some of the experience when managing a product team. Note: I am doing mobile software product management , so these experience might not be applicable to you.
Business and financial metrics — Are your contributing to the business success?
Ideally, if your team performs well, you should end up with a good product. A good product ideally have good business results. You should always tie your team’s performance to the business success. It could be revenue, cost saving, user growth, NPS(net promote score), external review, internal review, etc.
Effectiveness — Are you good at achieving goals?
Take a look at all the feature(goals) you planned on the roadmap and figure out how many of them got implemented in the end. The period of measuring this could be a sprint, a quarter, half year, or a year. If you achieve all of those goals(100%), then you are too effective, which is actually a bad thing. That means your goal is not challenging enough. If you achieve none of them, then you are too ineffective, which is also a bad thing. That means your goal is too stretching and is impossible to accomplish. Ideally, you should have a 60~80% achievement rate. Use this to gauge your team’s performance on a very high level.
Baseline, input and output metrics
You must have a baseline to measure against your progress. Then figure out what’s the input metric and output metric. For example, your baseline could be last quarter/year’s key initiatives you achieved , key feature you delivered, key selling point you brought to the market, revenue, user base, engagement rate, download volume, software performance, etc. then you measure against how well you beat the performance of last year. Your input metrics could be marketing dollars you invested, human resources you invested, cost of doing software; output metrics could be revenue, usage of the features, adoption rate, units sold, revenue, etc.
This usually ties back to your business and your product. So basically, you are measuring your product’s success.
Note: For people who are working on software product management in a device company. Moore’s Law is still valid today, so every 18 month, you know the speed of processor will double or the price of the CPU will decrease by half. Basically if your team sit there and do nothing, the performance still improves. So on the performance side, you have to measure the net performance improvement through software.