In an ever-evolving tech landscape, product managers must skillfully navigate uncertainties to achieve success. Product Leader Lara Kulesh discusses how we can respond to unforeseen circumstances in product management.
By mastering a four-step process—monitoring, identification, assessment, and response—they can stay ahead of risks and set the right priorities for their teams.
Effective monitoring techniques, such as outlining dependencies, conducting research, and staying current with industry trends, empower product managers to proactively tackle potential risks. Once risk areas are identified, they can create event lists and estimate impact timelines to stay prepared. Utilizing a comprehensive response framework that covers triggers, actions, roles, resources, deadlines, and outcomes, product managers can make well-informed decisions, build products that resonate with customers, and propel their businesses forward. Delve into the world of uncertainty management and unlock the secrets to product success!
As a product manager, navigating uncertainties is a critical part of the job.
Uncertainty occurs in situations where the outcome is unknown or cannot be predicted with absolute confidence. This article reveals four powerful steps to tackle any uncertain situation. Discover a practical guide that not only equips you to handle uncertainty with finesse but also uncovers hidden opportunities on your journey to resolution. Dive into the world of uncertainty management and transform challenges into triumphs.
Uncertainties can arise from various sources, such as changing priorities, delivery timeline changes, emerging competitors, market responses to new products or features, geopolitical tensions, supply chain issues, rising input costs (raw material and energy, etc), and rising interest rates. They can also stem from technological advancements that can quickly disrupt an industry or render a product obsolete. In this article, we will explore how you can identify areas of risk quickly and apply risk management frameworks to address them effectively.
Identifying and managing uncertainties is critical for technology companies; a global pandemic is an example of one of the most recent uncertainties to impact everyone. COVID-19 has shown that not only does startup financing matter, but more importantly, how companies and product departments choose to approach and handle uncertainties. Among recent cases, some companies were not equipped to manage either an emerging Covid risk or, on the contrary, the end of lockdown.
The emerging trend of AI presents both potential disruptions and opportunities for businesses. Google and Microsoft are competing to introduce AI capabilities into their search products, while Meta has announced a new team working on AI products for Instagram and WhatsApp. Additionally, numerous startups on ProductHunt are developing products powered by ChatGPT, and many SaaS companies are researching how this new technology can enhance their current offerings. These developments are characterized by high levels of uncertainty, but they underscore the importance of staying up-to-date with emerging trends and leveraging them to develop innovative products and solutions.
In addition to the challenge of adopting emerging new technologies, modern tech companies are now facing the risk of a global recession and lack of financing. This situation prompts businesses to cut costs, and product managers are responsible for designing new growth strategies that may involve expanding into adjacent markets and target audiences, maintaining the existing market share, improving margins, or applying other growth techniques.
Every product manager impacts product success or failure significantly, as they operate with uncertainties on a daily basis. As a seasoned product manager, the aim of your work is to establish the right priorities at every moment of time for the team, and yourself, to work on.
Choosing the wrong priorities can result in serious consequences. For example, developing the wrong product feature can lead to missed opportunities that could be more valuable than the cost of development. It can also lead to a drop in customer satisfaction, lifetime value, and market share, which can impact not only the company’s financial health but can also put the entire business at risk. Managing uncertainty is, therefore, a crucial skill that every product manager should possess. Effective risk management should operate within available resources while also considering alternative opportunities that can help the product and the company to succeed.
Managing uncertainties includes 4 major steps: monitoring, identification, assessment, and response. The process begins with monitoring.
Product managers can apply the following techniques to first identify the risk areas: outline the major dependencies, conduct research, monitor continuously, and validate the data.
These could be technological, cross-team dependencies, dependencies from someone’s decision, market conditions, or competitor releases. Start by writing a list of dependencies to check. For product features within one product module, this can be used as a template to fill out while working on every product feature. Consider creating two lists: incoming versus outgoing dependencies.
1) Incoming dependencies: the new feature may depend on specific operating systems requirements, such as certain versions of Windows or MacOS, which may impact its release schedule; hardware, third-party software, or APIs, such as payment processing or mapping services, which may impact its release schedules, or other internal software components, such as databases or web servers, as well as on other feature releases.
2) Outgoing dependencies: the release of a new feature may result in a series of changes in another module of the product, requiring another team to work on ensuring that their functionality is adhering to the new update. As a consequence, this may necessitate the updating of documentation, including user manuals or API reference guides, as well as providing training to both internal staff and external customers. Furthermore, it may be necessary to update customer support processes or resources, such as FAQs or helpdesk documentation. These changes may impact the release schedule and require updates to marketing materials or campaigns, such as website content or email campaigns.
As a product manager, you should also be aware of the best product solutions on the market. This includes knowing your competitors and thoughtfully exploring other products to add value to your product or for potential collaborations. Testing product substitutes, even if they are offline-only offerings, and complementary products can provide fresh ideas and insights into risk areas. Complementary software refers to software products that work well together and provide additional value to customers. For example, Slack and Atlassian products (such as Jira) are two complementary software products that work well together because users can easily collaborate on projects in Jira, while also communicating with their team in Slack. Getting alternative opinions from unbiased team members or market experts can also help to identify potential risks and opportunities.
In order to identify emerging needs and trends, it is important to regularly conduct customer interviews to gather feedback on existing products. Customer research, centered around users’ pain points, can be a game-changer for the company, as it may provide insights into demanded features, UX improvements, new integration, or workflows needed to help the company stay competitive.
Looking for emerging trends and technologies that could potentially disrupt the market or create new opportunities is another way to identify risk areas. Keeping a watchful eye on industry news and attending relevant conferences and events can help to stay up-to-date and informed on emerging trends and technologies.
Given that a product manager never operates in isolation, it is critical to establish a communication culture that facilitates the prompt identification of risk areas.
Transparency is key, as data is gold when it comes to making an informed decision. Make sure the information is circulated in a timely manner and delays won’t lead to uncertainties or information asymmetry within your team and the company.
Foster a culture of prompt risk reporting across teams. Dedicated channels can be established for teams to voice their concerns. Additionally, including risk reporting in daily and weekly agendas can aid in achieving this goal.
Nurture a product mindset outside of the product management team. Ensuring that everyone on the team is thinking about customers and the product can help to develop an alignment around the product. If the engineering team has this understanding, product managers will have more allies on their product journey, helping them to build a better product.
Collaborate with your engineering team to equip them and yourself with as much information as possible on every stage of the feature development lifecycle. Before the implementation product managers can prepare a high-level product requirements document (PRD), request high-level estimation, and ask the team to add a contingency score.
Check data quality
Another crucial aspect of identifying risk areas is to check if data meets quality criteria. Data must meet key requirements such as accuracy, validity, relevance, completeness, consistency, timeliness, accessibility, security, and scalability. This is particularly important when working with product analytics. Without proper data, product managers may make decisions based on incomplete or inaccurate information, leading to increased risks and potentially negative outcomes.
To ensure effective risk management, risk monitoring should be incorporated into a product manager’s routine as an ongoing process.
Product managers should create a list of triggering events and estimate the timeline for the effects to be noticeable once risk areas have been identified. Using a timeline and heatmap with significant events can aid in estimating the impact timeline.
To begin the assessment process, compile a list of events that could lead to both positive and negative outcomes. Examine each event separately and create a model that predicts the outcome if the event does not occur. It’s recommended to develop three models: an optimistic one where all events are successful, a realistic one where some events fail, and a negative one where none of the events succeed.
As an example, think about your high-level estimates of feature delivery from your development team. The best scenario might be four weeks. If someone from the team gets ill, it may take five weeks. If two people get ill, it may take six weeks. Keeping in mind the contingency rate, which is compounded by various events potentially happening gives you a window for making more realistic projections.
Make projections based on alternative scenarios. Making projections based on alternative scenarios and estimating and comparing possible outcomes can help not only to identify other risk areas but also to find opportunities.
Once the impact of the risk is estimated, product managers should list those risks in severity and timeline order, with the risk with higher severity and quicker to happening at the top of the list.
To effectively address risks, it’s important to follow a framework that includes the following pillars: trigger, action, role, resources, deadline, and outcome.
Trigger: The trigger is the event or condition that identifies the risk. This can come from a variety of sources such as customer feedback, market changes, or internal team discussions.
Action: Once a trigger has been identified, it’s important to take action to address the risk. This can involve changing priorities or roadmaps, communicating with customers and stakeholders, restructuring teams or departments, automating processes or adding technologies, or other actions depending on the scope and origin of the risk.
For example, if customer feedback indicates that a certain feature is causing frustration or confusion, a product manager might take action by working with the development team to redesign or remove the feature, or by communicating more effectively with customers to clarify its purpose and use.
Role: Roles in the risk mitigation process can be assigned by applying RACI (or RASCI) responsibilities matrix: responsible, accountable, consulted, and informed.
- Responsible: Identifying who is responsible for taking action is an important step in addressing risks. This can involve assigning specific tasks or responsibilities to members of the product team, development team, or other stakeholders. For example, a product manager might assign responsibility for addressing a specific risk to a product owner or development team lead, with support from other team members as needed.
- Accountable: Along with identifying who is responsible for taking action, it’s important to identify who is accountable for the outcome of those actions. This can involve assigning accountability to the product manager, development manager, or other stakeholders depending on the nature of the risk and its potential impact on the product or company.
- Consulted: It may be necessary to consult with outside experts or other stakeholders to fully assess risk and develop an appropriate mitigation strategy. As a product manager, seeking input from subject matter experts, such as the legal department, can aid in developing compliance features and ensuring that the product meets regulatory requirements.
- Informed: Finally, keeping all relevant stakeholders informed throughout the risk mitigation process is critical. In cases of anticipated feature delivery delays, the customer support department and sales teams should be notified to enable them to build proper communication with customers. Effective communication with stakeholders plays a pivotal role in building trust and confidence in the risk management process.
Resources: Adequate resources are essential for effectively addressing risks. This can involve allocating time, budget, or personnel to address the risk, or leveraging existing resources within the product team, development team, or company.
For example, if a risk involves a significant change to the product roadmap or feature set, the product manager may need to allocate additional development resources or budget to ensure that the change can be implemented effectively.
Deadline: Setting a deadline for addressing the risk is an important step in ensuring that action is taken in a timely manner. This can involve setting a specific date or timeframe for completing specific tasks or actions related to the risk.
For example, if a risk involves a potential security vulnerability, the product manager may set a deadline for the development team to implement security patches or other measures to address the risk.
Outcome: Finally, it’s important to track and measure the outcome of actions taken to address the risk. This can involve monitoring customer feedback, tracking key product metrics, or conducting retrospectives to assess the effectiveness of risk management strategies.
For example, if a risk involves a potential decrease in customer satisfaction due to a specific product feature, the product manager may track customer feedback and KPIs related to customer satisfaction to assess the effectiveness of changes made to the feature.
To conclude, by following this framework, product managers can effectively monitor, identify, assess, and respond to risk to ensure the success of their products.
At the core of successful product management lies the ability to make informed decisions based on sound analysis of risks and opportunities. One key aspect of this is the ability to quickly identify areas of uncertainty and apply an effective risk management framework to address them. By being prepared to pivot and adjust course as needed, and by keeping a close eye on market conditions and emerging trends, product managers can ensure that their products remain relevant and successful over the long term. By doing so, product managers can ensure that their teams are working on the right priorities and that they are able to deliver value to customers and achieve business goals.
Ultimately, the key to managing uncertainty as product managers is to remain flexible and adaptable in the face of changing circumstances. By following the steps outlined in this article, they can increase their chances of success and build great products that meet the needs of customers and drive business growth and other performance indicators.
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