S2 Ep. 11: How Do You Measure a Product Leader’s Success?
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Hope Gurion: Chief Product Officers, VP of Product, Head of Product are complex roles with diverse responsibilities that are not usually obvious to measure success. Sometimes they’re measured like other executives on company performance or measured on outputs like features or roadmap commitments delivered. But how should a product leaders’ success be measured? In this episode of Fearless Product Leadership, we learn from deeply experienced product leaders who’ve held the product leader role at multiple companies as they answer the question “How do you measure your success as a product leader?”
Welcome to the Fearless Product Leadership podcast. This is the show for new product leaders seeking to increase their confidence and competence. In every episode I ask experienced and thoughtful product leaders to share their strategies and tactics that have helped them tackle a tough responsibility of the product leader role. I love helping emerging product leaders shorten their learning curves to expedite their professional success with great products, teams and stakeholder relationships. I’m your host and CEO of Fearless Product, Hope Gurion.
I work with product leaders in a variety of companies and find wide variation in how their success is measured. In my own experience as a product leader and especially given the relative newness of the role on most leadership teams, it’s difficult to navigate and advocate for how the role and teams should be measured because other members of the leadership team and Board often don’t really know how to isolate a success metric for such a cross-functional role. This often leads to a cop-out of company performance metrics like revenue or EBITDA or delivery-related metrics like features or commitments delivered.
As more companies evolve to embrace both the product leader role and OKR models to set priorities and track progress to their goals, a door opens to define the success metrics for the product leader role in a meaningful way.
In this episode you’ll learn from five executive product leaders at B2B and B2C companies whose success is measured in two ways:
1. Quantitatively in HOW MUCH they achieved of the business priorities and outcomes, often using OKRs.
2. Qualitatively in HOW they achieved those objectives and key results by:
Creating focus and minimizing distraction and drag on the teams
Enabling healthy, collaborative relationships
Ensuring product teams have clarity, purpose
Solving important customer needs that lead to the desired business results
At the end I’ll share an example of the work I do with product leaders to help define their success metrics to connect their teams work to the company’s desired business outcomes.
Fearlessly tackling the question “How do you measure your success as a product leader?” are:
Troy Anderson, Chief Product and Information Officer, Aperture
Nate Walkingshaw, former Chief Experience Officer, Pluralsight, author of "Product Leadership: How Top Product Managers Launch Awesome Products and Build Successful Teams"
Nicole Brolan, Executive GM – Global Services at Xero, previously Chief Product Officer at SEEK
First, we hear from Troy Anderson who shares that his success as a product leader should be measured by how well he’s keeping his teams and the rest of the company focused on the most important priorities.
Troy Anderson: Well in a company, and you're a new product leader in a company; my key for you would be: “How often do you say no?” If you say no 90% of the time, I think you were doing pretty good. The key is, people end up with like their top 10 priorities which is ridiculous. Even John Doerr, when he's coming up with OKRs, he’s like, “You should have four objectives and four key results project” and if you can't have boil things down into kind of a top four even, you're doing it wrong. Something's a mess, you haven't thought through the problem in a systemic way. So, what you're always trying to do, is you're trying to take this limited resource of key people and apply them to these very focused problems and ideally, those four problems shouldn't necessarily all be the same thing; but your key is saying no to everything else, because first off, one thing that people sense right away is when we're being asked to do too many straight things that don't pertain to what we should be focusing on. If you have a good rationale for what you should be focusing on, then, absolutely your success as a product leader is getting things out of people's way.
So, one of the things that I've done when I've come into a company is I'm going, “Well how many meanings, how many emails, how many whatever it is, do we have to get something to move?” and my goal is to eliminate those. So, you're saying no to things that get in the way of your velocity and your ability to succeed. So, from a larger perspective: how few priorities? From a medium perspective: it's say no to other things and focus on your top three or four. Then, kind of at a more micro level: it's what are the things that get in people's way? If you eliminate things that get in people's way, as a product leader, you're showing that you're scaling by making you more people more effective. I think those are the keys for them.
Hope Gurion: Do you think that your CEO and/or board would agree with your assessment?
Troy: [Laughs] Lord! That's not going to fly at the CEO or board level, but that's reality. So, you have to solve for optics and perception as well as you do for reality. I’ve got to admit, I'm terrible at solving for optics and that sort of thing, but one of the things that I found, is that you put things into the board or CEOs framework. If you're trying to solve for an outcome, as opposed to a bunch of outputs and you've set those outcomes up with your CEO in advance, that's the best way to do it because it's like, “Look! This outcome actually happened. I said it was going to happen in this thing and it happened.” Like I said, at the board level, your board of directors wants the company to be more valuable, that's essentially what they're trying to be and if you have a good hypothesis for what makes the company more valuable and your outcomes and your narrow focus are aligned with that, that is going to be the greatest way to show your success to them; leadership overall.
Hope Gurion: Next, Rachel Obstler, VP of Product at PagerDuty, shares how success is defined at her company and how’s she impacted if goals are or are not achieved.
Rachel Obstler: So how success is defined for me? At our company, we use V2MOMS, which is like the Salesforce developed version of OKRs. So, we have methods and we have metrics. I define those for my team, but I do that based on a cascade of what the company metrics and goals are. My success is not a hundred percent but at least partially defined by me saying, “Okay, here are the company goals.” Sometimes a company goal is something that I want myself and my team own, sometimes it is something that I think will help drive the company goal. So, we'll define those metrics to find goals around them and then that is the thing that I get measured to.
Hope Gurion: So, what does that look like practically? If you hit the success metric or don't hit the success metric, is that a conversation is it compensation? How does that practically impact you?
Rachel Obstler: So, if we don't hit the goals there's an element of compensation on performance all those things that have to do with both the company goals and my individual goals and my team's goals. So, if we don't hit goals there's an impact to bonus, there's an impact to raises, so it is both performance and financial, which I think is good. So, everyone in the company or most people in the company are aligned to both the company goals and their individual goals.
Hope Gurion: Next Seth Roe, VP of Consumer Products for the Weather Channel at IBM knows whether he’s earning an A or an F as a product leader based on the outcomes of his teams. But practically, he invests his time on understanding the culture and relationship dynamics within his teams and between his teams and stakeholders to drive those outcomes.
Seth Roe: Success is measured as a product leader for me; this year, I heard one of our executives speak at IBM and he said, “It's not a career ladder it's a jungle gym” and I think that's been out there quite a bit, but it's so true. I mean, I think if you talk to any of your peers; we've all arrived at this this position that we currently have as a product leader in very different ways and from a variety of different backgrounds and skill sets and college degrees and all that stuff. At the end of the day, I think it's been these folks who are willing to accept any challenge and dive into that challenge by always having a ‘yes—and’ attitude instead of a ‘no but’. For me, in my own organization, what I think I'm currently measured out as a product leader, is I would say perception is reality to my own team and we're all crafting our own story and honestly our reputation within this organization. I think, being your authentic self and acting who you are at work versus outside of work, it varies from company to company that I've seen in my own career; but what we really try to instill here is as being your authentic self and making sure that the reputation you're creating within the company, ultimately is making you look successful.
So, as I've grown in my career, I've been able to better manage my reputation by leaning on being a more of a coach and a mentor and really driving like a positive culture. I've found that if my team has a lot of disagreement, where we’re not aligned within the organization, it just seems like we're not quite in step; that very much reflects poorly on any of as product leaders. So, for me culture is always a huge piece of it having retros on an often basis, so that we understand where the real challenges are that that need to be addressed, the more open and honest and transparent we can be about these problems, ultimately leads us to a to a healthier place in terms of how we're viewed from a success standpoint within the organization.
Then, the final piece for me is just being open to feedback. Every three months I look back and I go, “Man, I thought I knew a lot about this business, this discipline of product management” and every few months look back and I’m like, “I didn't know anything!” it's amazing. So, we're all very fortunate to work in an organization with a lot of smart people and I want to make sure they're telling me where I'm currently failing them on a regular basis, so that I can make sure that I'm meeting their needs as well as I can. At the end of the day all that kind of leads to the last question, to the to the outcomes that we're trying to achieve. If we're not achieving good outcomes, it's hard for anybody to be viewed successful so there's always that balance of making sure we have the right culture, the right morale, the right level of productivity, all that stuff kind of comes together in to how we're driving the bottom line.
Hope Gurion: Next Nate Walkingshaw of Pluralsight shares how a product leader’s success metric will likely vary based on stage of company from product-market fit in early stage, to scale at middle/growth stages excellence and retain customers at later stage companies. But at every stage, a successful product leader is laser-focused on solved customer problems.
Nate Walkingshaw: How I think about a product leader and the measurement of the skills or the performance of a product leader, I think varies based off company size and product maturity. So, the company size is going to matter a ton. If you're a new young series-A company, the only thing that matters is product market fit, period. It's the lifeblood of the company. So, you build a product and does it fit in the market and so the agility or the performance, it's around your ability to create a team create a product and then when you know that your product is or isn't working, your ability to move in the market to solve that problem, that's what great performance looks like. Then, once you find that traction, then it's the operational rigor that you need to build.
So, that's kind of like an early-stage, middle to growth stages; one is operational excellence, scale like the ability to scale teams. So, your ability to communicate, big. Your ability to communicate across multiple disciplines, huge. Your ability to not only communicate across those disciplines and deliver value to customers and measure the impact qualitatively and quantitatively, big. A qualitative feedback to me as NPS, I could care less about the score. I care a lot about the aggregated qualitative feedback of what they're saying to the products we build, which is extremely useful. Then, retention, like retention of that product. Retention is tricky, it is really, really tricky. Especially, if you're business-to-consumer, if you're pure SaaS or if you're digital or if you're sales-led; there's all these different contexts, but great performance would be product market fit. It's never going to change, that is what you're hired to do. I think maybe the last piece for me, it's just and I mentioned this in the earlier comment, but just the ability to create a culture of safety with those teams and then the ability to move those teams or to create those teams at massive scale that still senses and responds- to market conditions. Ultimately, that's why R&D teams are built, like how fast can we respond to market conditions?
So, things I hate and maybe hates it's a harsh word, but I really dislike them pretty strongly. I do not like annual planning cycles that dictate what our quarterly deliverables are going to be, what you know main thematic you know culture theater trade shows we're going to build to do those set releases and then we're going to measure you know the outcomes of you know the amount of pipe in the room. What I really care about a ton, is the continuous delivery of that value, the agility of those teams and then, if those teams are doing that we can actually collect like all of that work into stories into themes, into things that solve real customer problems and then we want to be measured on the outcomes of the problems that we solved. so that's my view.
Hope Gurion: Finally, Nicole Brolan shares how her success metrics as a product leader have evolved from team engagement and collaboration, to tying their goals to business results using OKRs.
Nicole Brolan: So, how my successes money is defined as a product leader; this has for me evolved over time. I think if I reflect on starting out, I think a lot of a lot of my success was one was really around team engagement and so that team engagement was beyond just the product managers and the designers and that with really around the product delivery teams. So, you know did they have clarity of purpose, do they feel engaged? There was a lot of weight put on how that was working. There's definitely a piece around how I - which is obviously quite subjective - there's this interesting piece about how I work with peers; so I'm definitely measured on how well myself as a leader, is collaborating with all the other functions and products interesting. Particularly, the way we set it up at Seek; it's basically the kind of lynchpin between the commercial side of the business and the technology side of the business. So, I'm measured on making sure that we've got really great relationships and collaboration going throughout both those sides.
Then, I think it's about business results, and look, one of the things that I think is really positive about how setup from a product function is, we're not directly tied to revenue. So, of course we have revenue generating initiatives, but we also have whole range of strategic initiatives that don't necessarily drive revenue or if they do, it's a really long game to driving revenue. I don't necessarily have revenue targets, but what I’m measured on is all the outcomes that are delivered to the business and how those outcomes are perceived to move the business forward. Now, this is the one that gets interesting, because in the early days, a lot of that was far more subjective, a lot of that was just my leader/CEO just kind of determining okay, “Well, how well do I think this moved us forward or didn't move us forward?”
It's been interesting because we've been on a journey with OKRs and so now we have business level OKRs. Since implementing them I have found that that measurement piece of me as a leader, it's a little bit more objective now because now we've actually got some very specific things that we've agreed almost in a contract, that we were trying to achieve. The nice part about that and that's also the way I treat my leaders, is that it's not a ‘Did you achieve the OKR or not?’ it's more around ‘Did you do everything in your power? Did you and your team's do everything you could to try and hit the OKRs and drive the right behavior?’ So, that's another key measure.
Then for me now, the evolution, because we're now bringing teams together across Asia and ANZ (Australia New Zealand). I'm also being measured now on a bit more of a transformational piece. So, how well are we bringing those organizations together? How well are we establishing a new culture? And, how well are we managing the trade-offs? Which are quite tough.
Hope Gurion: Between that transformation one and then what the Asia business once so that they would be all the things that I'm measured on and for that transformation one and especially you know reconciling the needs of different markets probably different contributions to the company's revenue how do you measure success of that like what's the what's the yardstick that you're using?
Nicole: Yeah, it's such a fantastic point, because what you find is say for example, one of our biggest markets is Australia, but the Asian markets are under quite a lot of competition. So, you have this friction where you've got highest performing markets versus cutting markets that have really high competition. So, for me, the yardstick that we're using, is again the hard part is this stuff ends up being a little bit subjective; but it's really this kind of subjective measure around, do we feel like we've got the ratios right and do we feel like we've got the balance of priorities right, that we did enough for each market based on certain criteria. That criteria is their market position, the competitive position, strategic value, those types of things. So, it is tricky because it's quite subjective and I would say I'm still really trying to work through because one of the things I've noticed is we switch market priorities quite often; so something changes and you'll say, “Oh well, now this market is important.” We're still trying to come up with a really objective way, how do we assess the markets a bit more, the long term view so that even if short term things happen, you don't have to shift priorities all the time because you're actually playing more the long game. For each market, what your key drivers are and you're chasing those drivers and so therefore little blips along the way, don't distract you. So, that's something that we're working towards because I would say we don't have that at the moment.
Hope Gurion: When I served as Chief Product Officer my performance was directly aligned to company performance. If the company was hitting its revenue and EBITDA targets, my compensation grew and if it fell below those, my compensation dropped. It was very clear. So as a leader I had to work through how to translate those company financial success metrics into metrics that my team were empowered to influence. At that time, I didn’t have models/examples of what other product leaders did so I had figure it out on my own.
As we heard from the product leaders in this episode, they are most often measured by the business impact of the product-impacting choices they and their team makes. These choices are rarely isolated and solely determined by the product team or leader. A successful product leader enables good choices for the teams and the company.
As an executive measured on lagging indicators of revenue and EBITDA, I found my way by helping my teams find the leading indicators that would achieve those lagging indicators. I recently wrote an article about why empowering product teams with product outcomes is more meaningful and powerful and I’ll link to it from my show notes. Finding the outcomes that the teams can impact positively is what ultimately leads to those lagging indicator business outcomes.
In my coaching work I help product leaders and product teams figure out today their paths to these successful outcomes. By using a combination of behavioral maps and math we deconstruct the business outcomes into the moments in the customer journey that they can impact aligns their purpose and empowers the teams to do their best work. Using “What If?” scenario analysis, the product leader can expose the assumptions that must come true to achieve their desired outcomes.
If you’d like more how-to information on defining success for product teams, check out my new 4-week course with Teresa Torres on the ProductTalk Academy, Defining Outcomes. In it you’ll learn to deconstruct business outcomes into product outcomes, identify the point of leverage to drive impact and negotiate setting product outcomes as goals to achieve business outcomes. It runs a 3 times a year as a public course but is also available as a private workshop.
I want to say thank you to our senior product leaders, Troy, Rachel, Seth, Nate, and Nicole for sharing their expertise on this episode.
If you’re a product leader seeking meaningful success metrics for you and your teams, I’d love to be of help. Contact me on Linkedin or Twitter or schedule an initial consultation with me using the Contact Me page at www.fearless-product.com/contact.