How to Be a More Effective Internal Product Manager
Internal products are pivotal to the operations and smooth functioning of many companies. The role of internal product manager (although the title may vary) is also becoming increasingly common as companies seek to develop their own internal tools to meet bespoke enterprise needs.
Compared to the archetypal front-end product manager, PMs working on internal products mostly operate within the internal corporate environment and need to apply their skills differently to succeed.
Internal product management is typically done by product people filling the role of business analyst, product owner, product manager, or project manager. An explicitly defined role of internal product manager is not extremely common in practice. — KBP Media
However, one of the things that I’ve observed as an internal PM is the lack of useful resources, toolkits and honed practices that are tailored for internal product development. While there are well-defined industry standards for customer-facing product management, benchmark skills and best practices for internal PMs are often hard to find or ambiguous.
Given the close proximity to users and internal stakeholders, internal PMs must handle a high volume and velocity of inputs coming from all directions within the company. Having strong communications skills is therefore an important asset for an internal PM.
In this article, I want to share some of the communication strategies that I’ve found useful in managing the complexities of the internal product management journey.
Disclaimer — opinions are purely my own, based on research and personal experience.
What is Internal Product Management?
Internal product management refers to the development of tools and systems that are primarily used by internal company users. These products are built to support a company’s corporate functions and are usually not directly sold to customers.
The outcome of internal product management is you solve problems of users internal to your organization or enables your organization to satisfy the needs of your customers. The output of internal product management is products that your organization does not offer for sale to others, but rather uses to support its various business activities. — KBP Media
Many internal products serve highly important and even mission-critical functions within companies. In general, internal products can be defined by the following characteristics:
Users
The primary user groups of internal products are company employees. It can be a tool that’s only used by a specific team/department or a larger system that’s used across the company.
Significance for internal PMs: Being customer-centric in this case means not only understanding internal user goals, but more broadly also a company’s operational processes and workflows.
Function
The core features of internal products are typically geared towards efficiency gains — making things work faster, better or simpler. Examples could be making a report easier to churn out or reducing time spent on repetitive tasks.
Significance for internal PMs: The potential impact on employees’ efficiency should be an important consideration for feature prioritisation. How a specific product or feature can be integrated with other company work tools is also an important consideration.
Value
In contrast to customer-facing products, internal products are generally not built for revenue generation (although it’s possible for internal tools to evolve into highly profitable businesses). Rather than monetisation potential, internal products typically bring value in other ways such as cost reduction or man-hour savings to the company.
Significance for internal PMs: This value positioning influences how PMs should pitch their products to internal stakeholders. More on that later.
Internal Product Example in E-commerce
I use my own example below to illustrate what an actual internal product looks like in the context of an e-commerce company like Shopee.
As a Data Product Manager, I work closely with data engineers to develop big data solutions such as data marts and customised analytics tools used by internal teams in Shopee and SeaMoney.
These data products are built by internal teams for internal use. They are integral to the work of business analysts and data scientists, who rely on these tools for downstream analytics requirements such as data modelling, machine learning and management reporting on a daily basis.
At the individual level, internal tools like data marts enable Shopee employees to be more productive and efficient. At the company level, internal products collectively serve as the key engines and enablers of our core business operations in areas like fraud detection, logistics management and strategic decision making.
Given the corporate focus of internal products, internal PMs face unique challenges and must employ different communication techniques compared to PMs working on external-facing products. Below I share two communication strategies that internal PMs can apply to become more effective in product and stakeholder management.
Communication Strategy #1: Value Positioning
Internal products don’t have the same measurements for success or failure. When a department does not have to pay for it, team members can have a reduced sense of the product’s worth. — Product Focus
Internal products are generally not measured by business growth KPIs. This is unlike profit-driven products, which may have more straightforward performance indicators like revenue numbers or user growth.
Because there are no universal benchmarks, measures of success for internal products may vary widely, depending on which areas of product function, performance attributes and user goals that you would like to focus on.
For instance, the value of an internal finance system may be measured by how many manual reports it can automate or the usefulness of its accounting functions. Whereas an internal data visualisation tool may be judged by its computation speed and data wrangling features.
Without guideposts like revenue or user figures to rely on, it can be hard to identify and distinguish which metrics are truly important and valuable to your stakeholders. As a result, the benchmarks of success for internal products are often not well-defined.
As an internal PM, this can be an issue especially when you need to demonstrate value in order to justify the need for additional resources or headcount for your team.
Internal PM Strategy
I recommend the following 3-step approach to start quantifying and articulating the value of your product to internal stakeholders.
Step 1: Build a clear business case
Having a clear business case can help you to effectively communicate the importance of your product to internal stakeholders and provides justification for why resources should be dedicated to support its development.
Your product business case doesn’t have to be a clunky document crammed with market research and financials. Keep it brief and highlight the most important elements:
- Key problems/pain points that your product is solving for
- What is the solution that you’re building
- Benefits that your product or feature brings
- Resources required to make it happen
The business case is a good starting point for any new product or feature development. But even if you already have an established or mature internal product, it’s a good practice to maintain a business case document. This process forces you to evaluate the underlying assumptions about your product and helps you to articulate your product’s value proposition with clarity.
Step 2: Identify and measure product metrics
After establishing a clear business case, the next step is to select suitable product metrics to measure and track product performance. For internal PMs, this process can be particularly challenging as there is often no clear path to determine success measures.
To cut through the ambiguity of the metric selection process, a structured approach is needed. The HEART Framework and Goals-Signals-Metrics are two models that I’ve found useful in my own product metric definition process.
- The HEART Framework is a methodology developed at Google to help define key metrics that measure the quality of user experience for a particular product. It covers product metrics in the categories of Happiness, Engagement, Adoption, Retention and Task Success. As a start, you can select one or two categories in the HEART framework that are most relevant to the scope of your internal product and start defining quantifiable measures within those areas.
- Goals-Signals-Metrics is a simple process that allows product teams to articulate the goals of a product or feature, then identifying signals that indicate success, and finally building specific metrics to track product performance. This process helps to ensure that the metrics you select are aligned with your user goals.
The HEART Framework and Goals-Signal-Metrics can be combined into a matrix as shown above to identify and prioritise product metrics for performance tracking. As your product evolves, continue to update your metric framework to ensure you are tracking the most relevant metrics that are reflective of your product goals.
Step 3: Mapping product metrics to user value
Finally, you need to ensure that your product metrics are aligned with user goals and what users value. This is crucial because you want to know whether the value generated by your product is worth the effort and resources invested into product development.
For example, as a PM for an internal data analytics application, you may be interested to track the average time that your application takes to return query results to users. This metric can be connected to a user goal like faster report generation or higher work efficiency. Using this measure, you can then evaluate the potential user time savings against the resources it would take to develop a feature that improves the query engine performance.
As an internal PM, it’s important that you’re able to clearly articulate the connection between your product’s achievements and user success. To demonstrate your product’s business value, quantify the valuable outcomes and outputs you’ve delivered together with your team and present this regularly to your key stakeholders.
Communication Skill #2: Product Marketing
Internal products generally do not have dedicated product marketing support. In this case, the internal PM usually has to take on the product marketing role to drive product outreach and adoption among internal users.
Without a consistent and deliberate promotion effort, an internal product may struggle to achieve traction. Unless an internal product is mandated to be used across the company, it can often face challenges in the following areas:
- Awareness. There may be a lack of awareness about your product’s value and functions among internal stakeholders. In this case, there’s a need for internal product marketing to ensure users are keeping pace with your product’s latest developments and releases.
- Utilisation. Users may not be skilled in using the product’s various features. As a result, they may not be utilising the product in a way that allows them to reap its full benefits. To empower users, internal PMs need to have a strategy for user education.
Internal PM Strategy
Having an internal product marketing strategy is one way that internal PMs can start to tackle the issues of awareness and utilisation.
Awareness
Internal PMs should plan dedicated marketing communication efforts alongside important milestones like internal product launches and feature releases. This would ensure that users are informed on important product updates that could otherwise be lost in the daily deluge of internal communications.
One inherent advantage of being an internal PM is having direct access to target user groups. This makes internal marketing campaigns much simpler and less costly to execute than marketing efforts for customer-facing products.
Even without a specialised marketing team, internal PMs can easily create the marketing content on their own. Some of the product marketing resources that you could consider to develop include:
- Regular newsletters
- Blog posts
- Internal product homepage
- Product infographics
- Marketing decks
Delivering key marketing messages through these channels at important product milestones can help to enhance perception of your product, increase adoption rates and enable users to better appreciate your product’s value.
Utilisation
Beyond user engagement and outreach, user education is another important pillar of internal product marketing efforts.
In addition to being the product’s chief promoter, internal PMs often have to serve as the product trainer as well. You may need to work with engineering and other cross-functional teams to co-create training materials containing both technical and non-technical information that cater to different user groups.
To support user education, internal PMs could consider developing some of the following product education resources:
- User guides
- Video tutorials
- Hands-on demos
- Product documentations
- Product office hours
Structured training enables users to not only be more confident but also more competent when using your product. When this element of product marketing is done well, product performance in areas like user onboarding and feature adoption will also improve.
In Summary
Being an internal PM can be deeply rewarding when you have the opportunity to create direct and tangible impact in the everyday work of your co-workers through the products that you develop. This role also has its unique challenges such as ambiguity in performance measurement standards and additional focus on internal stakeholder management.
Given this context, internal PMs need to be skilled communicators. Value positioning and product marketing are two of the key communications skills that could help internal PMs advance the development of their product.
More broadly, there’s a lack of professional resources and well-defined benchmarks that internal PMs could align with in the product management journey. Internal PMs must therefore also possess strong vision for the product goals they want to achieve and be self-driven to succeed.
If you have any thoughts or comments on this article, I’d be happy to hear them. Get in touch with me at zhangrui@outlook.sg.
