Product Manager Effectiveness

An effective PM is one that makes correct decisions often.

Decisions are a PM’s output

As PMs, we produce something very tangible for our teams: decisions. This is our output (not outcome). Decisions come in the form of the following artifacts: vision, strategy, goals, roadmap, and requirements.

The cost of indecision or wrong decisions

Each artifact provides direction on the path forward, without which teams can get lost in ambiguity, become ineffective, and the business could eventually implode. This is because a PM’s output drives the momentum of all other functions in a company. This can be visualized in the following way, each step relying on the previous one:

Each stage is critical and can impact the business in the following ways:

• Vision: without a vision, teams may be working towards different and potentially conflicting end goals, making progress slower and collaboration turbulent.
• Strategy: without a strategy, product features can proliferate in any direction and there’s no cohesion on the path forward or in the product itself. Too many directions and too little focus gets nothing meaningful done.
• Roadmap: without a roadmap, engineers and designers won’t have clarity on what they should be working on and salespeople won’t know what they can sell and by when. This reduces the velocity of each function and therefore, ultimately slows down progress towards the desired business outcome.
• Requirements: ambiguity about requirements slows down design and engineering velocity which in turn delays the product hitting the market, ultimately resulting in having no product to sell or diminishes ability to retain users.

Therefore, an ineffective PM can have dire effects on the rest of the business.

How do we define PM effectiveness?

Let’s first start with productivity, our output, then move on to effectiveness:

Productivity:

= output / time

= # of decisions made / time it took to make that decision

= # of artifacts produced / time it took to produce them

Effectiveness is then productivity combined with doing the right things:

# of correct decisions made / time it took to make that decision

The more correct decisions a PM is making and in shorter and shorter time, the more effective they are.

However, note that in most scenarios, productivity is more important than effectiveness. In other words, making a decision quickly is more important than making the correct decision slowly. Growth however then comes from improving on both dimensions: the % of correct decisions made and the speed with which it was made.

How do we increase our effectiveness?

1. Get experience and practice. Decision making is complex due to the multitude of variables present in any given situation. Get exposure to situations where you are able to make decisions and do it often. With practice, your productivity will increase over time.

2. Increase feedback loops. This is because the results of a PM’s decision takes time to see. It’s not like code where you can compile the program and see if it works or not in minutes or hours. It can take weeks or even months to know whether you made the right decision as a PM when the product actually meets the user. Therefore, to increase effectiveness, i.e. making correct decisions often, speed up feedback loops. These come in the forms of peer or manager feedback, external research, user interviews, and experiments. Repeated practice of decision making along with tighter feedback loops will result in more correct decisions made often, i.e. a more effective PM.

3. Get direct exposure to reality. It is not enough to simply read the research reports from user researchers. It is not enough to look at metric dashboards. A PM must get direct exposure to users or risk misinterpreting abstractions presented by others or data. In the HBR article, The Effective Decision, Peter F. Drucker summarizes an old military practice that’s still followed today:

“The commander who makes a decision does not depend on reports to see how it is being carried out. The commander or an aide goes and looks. The reason is not that effective decision makers (or effective commanders) distrust their subordinates. Rather, they learned the hard way to distrust abstract “communications.””

How do I use this framework?

PM Individual Contributor: No one makes correct decisions all the time, it’s impossible. Instead, use this framework to measure your own effectiveness over time. Reflect back and put yourself on a scale: what percentage of your decisions were correct in the past 3–6 months? Has that increased since the time period before?

The closer you are to the 100% mark repeatedly over time, the more likely it is that you can take on more scope or potentially move to the next level.

Manager: Managers can use the same scale above to determine how hands on or hands off they need to be, when can someone handle more scope, and when they can get to the next level.

CEO of a startup: A startup is a fragile environment where mistakes are more costly than in established businesses. Therefore, a CEO of a startup can use this scale as a leading indicator to predict the chance of success of their company. If the PM or CEO themselves aren’t making correct decisions often, chances of success are low.

Effective PMs are critical to a business. Measuring a PM’s effectiveness therefore, is key to predicting a business and team’s success. This framework of effectiveness can help us judge where we are and where we can grow.

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