I’ve previously written about the need for Product Managers to actively manage their product performance and financials. At this year’s Product Camp I ran a session on developing product dashboards. The focus of my presentation is re-visited below.
Many product initiatives have failed due to lack of underpinning evidence-based analysis and reporting. In order to actively manage performance you must measure, analyse and report on performance.
For many the question of what to measure and what aspects of product performance to report on can, at times, be overwhelming.
There are many different views on what should be measured and reported; from those who advocate “the single magic number”, to product dashboards that resemble something out of a NASA space mission.
I fall somewhere in the middle. I’m not a fan of the single magic number theory.
Product Portfolio reporting needs to measure a range of core Key Performance Indicators (KPIs) or OKRs to derive meaningful and actionable insights. Only measuring a single metric means you risk not identifying other core value drivers within your portfolio.
A key part of the product manager’s role is to surface and report performance findings and recommendations to Executive and Board management. Whether you work in a company, not-for-profit or start up, you have stakeholders to whom you are accountable to reassure and evidence that, as a whole, product performance is tracking to plan and delivering value – value to your customers; shareholders; investors.
That doesn’t always mean profit. Depending on your business model and stage of business maturity, a measure of performance may even be loss making. For example, I have had product lines within my portfolio which were deliberate loss leaders. At a given time in the business, the decision was made to sell and launch certain products below cost. This may have been in an effort to penetrate new markets, grow market share or with a view to up-selling to other profitable product lines down stream.
Some common reporting metrics include:
- Revenue (including revenue per product line/per segment or customer)
- Costs (in insurance this would include claim payments). Within cost, you may also want to break this down by channel and look at the cost to acquire, cost to serve and cost to retain. This can be very useful in determining where to allocate scarce resources and marketing/BD expenditure.
- Margin performance across your whole product portfolio and within each product line/series
- Sales volume: value by product, channel and location, including prospects and sales conversion
- Customer retention and satisfaction. Where are you retaining and losing customers? Is your future customer retention at risk?
Whatever you decide to include within your product dashboard, you need to balance the scope of what you measure against your key objectives and ability to action and deliver insights. Just as the single magic number approach can risk missing important metrics, equally a ‘smorgasbord’ approach to your dashboard can simply serve to distract and overwhelm the business.
Critically you need to measure the right things.
“Not everything that can be counted counts, and not everything that counts can be counted..” – William B Cameron*
*In an earlier version of this post I incorrectly attributed this quote to Albert Einstein. Thank you to Josjua J Arnold for the correction
Spending some time thinking about the what your dashboard is trying to achieve and the business value it will deliver is also important:
- Scope – is it broad or focused on a specific part of the product portfolio?
- Operational versus strategic
- Time horizon: Looking back, real time, snapshot, predictive (current month; YTD; Month LY; YTDLY; actual performance against forecast/plan)
Whatever you decide to measure, the metrics you choose to track and report on should be SMART – Specific; Measurable; Achievable; Relevant; Timely
Using the SMART framework will help you ‘join the dots’ and make connections across different elements of your product portfolio. In making connections you can identify interventions you can undertake to make the most of opportunities or address issues within your portfolio.
You can’t afford to overlook good design.Use customer led design theory in the development of your dashboard. If you need to include reams of narrative to explain particular metrics then it is probably an indication that the metric you have chosen needs to be better defined or is too complicated.
As with any presentation, you need to think about your audience:
- Who is the report intended for?
- How high level or detailed does it need to be, given your audience?
- Can visual communication aids such as graphs, traffic lights and charts be more effective in communicating key information?
- What decisions do they make? What questions do they need answered to help them make those decisions?
- How proficient are they in understanding and measuring key performance indicators/metrics?
- How much time do they have to review the dashboard?
Think also about the way in which your audience is likely to consume your product dashboard and any associated reporting. By this I mean, are they likely to consume the report electronically, or via paper based reporting? Will they be able to view your report in colour or do you need to design your report to be able to be read in black and white? It’s not dissimilar to designing software and needing to understand the inter-operability environment in which it will be most commonly used.
I once had a boss who was colour blind. I had very enthusiastically developed a dashboard report, based on RAG (Red/Amber/Green) traffic light reporting. Very informative for me but unreadable for him. My solution?, I added status wording below each RAG indicator. A good lesson for me in making sure I knew my core audience!
Some design resources which I find helpful:
Your product dashboard and reporting is not static. It will evolve and iterate over time. As business needs or market conditions change, your dashboard needs to reflect the changing priorities of the business.
As with all prototypes and products, actively seek feedback from your key stakeholders. Do they find it useful? What areas of the dashboard do they most regularly refer to? Any suggestions they may have?
Use that feedback to keep iterating and developing your dashboard
The insights you gain from your dashboard should be a primary tool in the ongoing prioritisation and management of your product portfolio. Gut and intuition have a part to play (and something we develop over time) but having a well defined dashboard will help you amplify opportunities, and intervene early when issues emerge.