What makes effective decision making so challenging for product managers? "Product people - Product managers, product designers, UX designers, UX researchers, Business analysts, developers, makers & entrepreneurs October 10 2016 True Product Culture, Product Management Role, Product Planning, Mind the Product Mind the Product Ltd 1207 Product Management 4.828

What makes effective decision making so challenging for product managers?

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How can a product manager make effective decisions about the direction of their product? How do they adequately weigh up all the variables to select the best solution from the available options?  And how do they make sure that any investment will adequately consider future movements of both the market and the competition?

The pressure is on to get it right

Why should product managers be under any more pressure to make sound decisions than finance managers or sales and marketing teams? It’s a question of responsibility:-

  • Firstly, product managers should look to own the success of their products, including the commercial and customer satisfaction performance. While marketing and sales teams are stakeholders and involved in achieving the targets, it’s the product manager who is absolutely committed to delivering the revenue, profit and satisfaction targets.
  • Second, the product manager’s delivery requirements will usually be the big development items in an organisation’s technology roadmap. As such, the majority of the organisation’s development, roll-out and training effort will be spent implementing activities directed by the product manager.
  • Thirdly, it’s the product manager who should watch for strategic movements in the market and among competitors, and who should attempt to keep one step ahead.

So in this light, every terrible decision that businesses have made can ultimately be handed to the product manager – the New Coke launch; Blackberry and Nokia missing the development of the mobile market; Yellow Pages being so slow to pick up on digital marketing.

The theory’s great, but…

But there are many sources of advice on decision making. I think the Wikipedia entry on decision making, for example, is impressive, and it lays out a broad range of options. A previous manager of mine used to quote Kurt Lewin’s statement “there’s nothing so practical as good theory”, but this is of little comfort when faced with problem with no obvious solution.  I hope I’m not the only product manager who’s been working on a critical business turn-around product only to find that focus groups have explicitly stated it’s not good enough for them to want to change their current service.

So why is decision making so challenging? It seems to me that the problems for a product manager come from three main areas:

  • Incomplete understanding of market or competitors. Making a decision without knowing the impact on our core customer segments (B2C) or our biggest customers (B2B) means we will be at risk of delivering something that is perhaps irrelevant or irritating.
  • Unreasonable costs and timeframes to deliver. Why does technical implementation force us to write requirements and decide a proposition and pricing six to nine months before we’re going to launch? It’s inevitable that the market and customer needs will change in this time and that system development teams won’t want or be able to handle changes easily.
  • Inability to see the future. I’m not sure there’s much I can add to this one.

There’s an additional challenge that deserves special mention – that of attempting to meet unrealistic expectations. Whether these expectations are about functionality, timescale or cost, it’s always challenging to ensure that what is launched is as good as the original concept appeared to be. I’d argue that this expectation setting is always within a product manager’s gift to control, and is the most powerful element in determining success.

Expectation management is so important because the product manager must decide the compromise on the functionality / cost / time equation, while ensuring the product/market fit remains strong. Such compromise decisions arise from new information from the market, suppliers, development teams or product testing, and happen throughout a project.

The judgement call about a major change in product features will determine whether the internal and external audiences need to be updated. While it may be painful to revisit all the stakeholders to explain a change about product delivery, functionality or cost, this is the only way to ensure the business stays committed to the product.

It’s also a valuable opportunity to ensure that you are still on track to launch a successful product that meets your customers’ needs; whilst it is a difficult decision, the product manager must be able to understand when the product no longer achieves the core outcome targeted and, as a result, facilitate a decision as to whether to kill the initiative.

Selling “ahead of the curve”

More challenging is to ensure that the rest of the organisation sets internal and external expectations that align with the product reality. It’s almost inevitable in a B2B environment that sales teams will look to ‘extend’ what your solution can do in order to close the sale.  This can be avoided by getting the product manager involved in customer prospect conversations and using these conversations as opportunities to validate the product’s direction. When this isn’t possible, it’s critical that sales teams are given factual and accurate views of what the product will and won’t do and that they are held to account if they deviate from this.

But there are always scenarios where business leaders will choose position over content; a recent example for me is where press have been informed we’re launching a product before we’ve even proven the solution works. I’ve also had the interesting situation where the CEO of the organisation has announced the pricing of a product (“it’ll be absolutely free for our existing customers”) at our all-hands company meeting, in front of 2,000 people.  It wouldn’t have been so galling if I hadn’t had spent hours preparing the pricing recommendation I was due to make the following week.

It’s about collaboration, not going it alone

So how do product managers make good decisions? Well, after all this build up, I’m afraid you may find that the answer is rather mundane:  it’s just like making a decision anywhere else.

Unless you’re the owner / manager of your own start-up, successful decision making is all about collaboration and ensuring the right audience has input into decisions. And even if you’re launching your own business, you need a ‘board of advisors’ who can guide you whether the approach you are taking is correct.

The ultimate decision makers who direct the product are dependent on the business. And your job as a product manager is to absolutely drive them to make the right strategic decision for the business.

One of my past roles involved me fighting tooth and nail within a large multinational service business to expand and massively upgrade its SME product, both to augment the customer experience but also to close out the competition. Despite everything I tried, and the evidence supporting my decision going to the board, the leadership team chose not to pursue it.  That business is now losing approximately 7% year-on-year share to more nimble, flexible businesses that realised the margins were attractive and customers weren’t being serviced effectively.

Could I have done anything more as part of the decision making process? I’m convinced the answer is no.  Whether I liked the outcome is a different matter.

One thought on “What makes effective decision making so challenging for product managers?

  1. > I’m convinced the answer is no
    So, did you just give up on persuading management knowing that their decision was wrong?

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