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If only i’d had a tardis; why you shouldn't rely on time travel to manage your product financials

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Amanda Ralph
Amanda Ralph

The document discusses the importance for product managers to understand product financials and metrics in order to optimize business and customer value. It emphasizes that product managers need to be able to predict demand, measure performance, and create value for both customers and the business. Key responsibilities include understanding customer needs, developing a business case, measuring performance metrics like revenue, costs, and margins, and using tools like a product dashboard to track and communicate progress. Understanding financials gives product managers credibility with stakeholders and allows them to effectively advocate for their product strategy.

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IF ONLY I’D HAD A TARDIS: WHY YOU SHOULDN’T RELY ON TIME TRAVEL TO MANAGE YOUR PRODUCT FINANCIALS Amanda Ralph Head of Product – Kinetic Super 22 August 2015
#prodmgmt @ralphytown @pcampmelb
A core role of the product manager is VALUE CREATION – value to the customer; value to the business
You must be able to predict (forecast), measure and create value
AS PRODUCT MANAGER YOU NEED TO: • Know and understand your customer: understand the customer need – the job to be done • Identify the market opportunity and the business drivers • Translate those needs into product strategy and requirements • Develop a business case that defines the expected costs and return on investment • Test, learn, iterate and take your proposition to market
BUT IT IS NOT JUST A CASE OF ‘BUILD AND SHIP’
YOU NEED TO MEASURE PERFORMANCE
UNDERSTAND YOUR FINANCIALS • They will help you identify where the opportunity exists to realise benefits and deliver optimal value… at scale • And to know where problems and threats to your product performance exist….
YOU NEED TO MEASURE PERFORMANCE SO YOU CAN OPTIMISE BUSINESS AND CUSTOMER VALUE
WHAT TO MEASURE?
DEFINING YOUR BUSINESS METRICS • They must be measurable – you need to be able to track them back to business/value driver • They must align to your product and business objectives • They must be actionable – i.e. you have to be able to do something about them; to intervene and make an impact
They will be a combination of numerical business values (within your P & L) as well as more intuitive ‘gut feel’ indicators
• Revenue • Costs – cost to acquire; cost to serve; cost to retain • Management expenses (your business overheads) • Margin – gross and net • Volumes – number of customers/’widgets’ acquired, lost • Market share • Actual versus Forecast – OVER TIME • Measure of channel effectiveness • Customer satisfaction
Together, these form your product dashboard
Source: www.medibank.com.au CORE FINANCIALS
Source: www.medibank.com.au CORE AND MARKET DATA …
Source: http://www.slideshare.net/saeed_w_khan/product-management-metrics-be-the-product-ceo?next_slideshow=1 SAMPLE DASHBOARD – STATUS AND KEY INSIGHTS
Your dashboard should enable you to understand performance at a ‘snapshot’ and then to drill down in more detail within each measure.
It should be easy to communicate and quickly highlight opportunities and trouble spots
TOOLS OF THE ‘TRADE’ FOR A PRODUCT MANAGER
Product Canvas by Shardul Mehta (The street smart Product Manager) http://streetsmartproductmanager.com/product- canvas/ Great for identifying on a single page your product strategy and the elements of your proposition that you need to deliver to solve for the job to be done – including core business value and financials PRODUCT CANVAS
Useful once you have identified the job(s) to be done to focus on core drivers of value across different dimensions of the business – these can then become central to business case and defining measures of success and should be reflected in your product dashboard. VALUE DRIVER TREES
A FINAL WORD ON WHY YOU SHOULD KNOW YOUR FINANCIALS…
LOOK FAMILIAR?
AS PRODUCT MANAGER YOU NEED TO HAVE EXCEPTIONAL INFLUENCING SKILLS: • You need to be able to build trust and confidence in your product strategy • The business needs to get a sense of the degree of business risk and business value that your strategy will deliver • And they need to be able to understand ‘what success looks like’
In larger corporate environments, you will need to be able to navigate and deliver your product vision confidently to: • Investment committees • CFOs • Actuaries • The Board • The Executive Committee • And any other governance ‘clearing houses’ that your company requires
If you are a start up, you will need to be able to convince: • Funding partners – investors; crowd sourcing • Grant committees • And any other governance ‘clearing houses’ that your start up requires
YOU NEED TO BE THE CONSUMMATE DIPLOMAT – A WELL INFORMED AND KNOWLEDGEABLE ONE
KNOWING YOUR FINANCIALS WILL BUY YOU STAKEHOLDER ‘CAPITAL’ AND CREDIBILITY
WHICH MEANS YOU CAN KEEP DOING WHAT YOU LOVE – DEVELOPING AND MANAGING LEADING PRODUCT PROPOSITIONS
THANK YOU! aralph@kineticsuper.com.au +61 429 512 566 au.linkedin.com/in/ralphamanda @ralphytown

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If only i’d had a tardis; why you shouldn't rely on time travel to manage your product financials

  • 1. IF ONLY I’D HAD A TARDIS: WHY YOU SHOULDN’T RELY ON TIME TRAVEL TO MANAGE YOUR PRODUCT FINANCIALS Amanda Ralph Head of Product – Kinetic Super 22 August 2015
  • 3. A core role of the product manager is VALUE CREATION – value to the customer; value to the business
  • 4. You must be able to predict (forecast), measure and create value
  • 5. AS PRODUCT MANAGER YOU NEED TO: • Know and understand your customer: understand the customer need – the job to be done • Identify the market opportunity and the business drivers • Translate those needs into product strategy and requirements • Develop a business case that defines the expected costs and return on investment • Test, learn, iterate and take your proposition to market
  • 6. BUT IT IS NOT JUST A CASE OF ‘BUILD AND SHIP’
  • 7. YOU NEED TO MEASURE PERFORMANCE
  • 8. UNDERSTAND YOUR FINANCIALS • They will help you identify where the opportunity exists to realise benefits and deliver optimal value… at scale • And to know where problems and threats to your product performance exist….
  • 9. YOU NEED TO MEASURE PERFORMANCE SO YOU CAN OPTIMISE BUSINESS AND CUSTOMER VALUE
  • 11. DEFINING YOUR BUSINESS METRICS • They must be measurable – you need to be able to track them back to business/value driver • They must align to your product and business objectives • They must be actionable – i.e. you have to be able to do something about them; to intervene and make an impact
  • 12. They will be a combination of numerical business values (within your P & L) as well as more intuitive ‘gut feel’ indicators
  • 13. • Revenue • Costs – cost to acquire; cost to serve; cost to retain • Management expenses (your business overheads) • Margin – gross and net • Volumes – number of customers/’widgets’ acquired, lost • Market share • Actual versus Forecast – OVER TIME • Measure of channel effectiveness • Customer satisfaction
  • 14. Together, these form your product dashboard
  • 18. Your dashboard should enable you to understand performance at a ‘snapshot’ and then to drill down in more detail within each measure.
  • 19. It should be easy to communicate and quickly highlight opportunities and trouble spots
  • 20. TOOLS OF THE ‘TRADE’ FOR A PRODUCT MANAGER
  • 21. Product Canvas by Shardul Mehta (The street smart Product Manager) http://streetsmartproductmanager.com/product- canvas/ Great for identifying on a single page your product strategy and the elements of your proposition that you need to deliver to solve for the job to be done – including core business value and financials PRODUCT CANVAS
  • 22. Useful once you have identified the job(s) to be done to focus on core drivers of value across different dimensions of the business – these can then become central to business case and defining measures of success and should be reflected in your product dashboard. VALUE DRIVER TREES
  • 23. A FINAL WORD ON WHY YOU SHOULD KNOW YOUR FINANCIALS…
  • 25. AS PRODUCT MANAGER YOU NEED TO HAVE EXCEPTIONAL INFLUENCING SKILLS: • You need to be able to build trust and confidence in your product strategy • The business needs to get a sense of the degree of business risk and business value that your strategy will deliver • And they need to be able to understand ‘what success looks like’
  • 26. In larger corporate environments, you will need to be able to navigate and deliver your product vision confidently to: • Investment committees • CFOs • Actuaries • The Board • The Executive Committee • And any other governance ‘clearing houses’ that your company requires
  • 27. If you are a start up, you will need to be able to convince: • Funding partners – investors; crowd sourcing • Grant committees • And any other governance ‘clearing houses’ that your start up requires
  • 28. YOU NEED TO BE THE CONSUMMATE DIPLOMAT – A WELL INFORMED AND KNOWLEDGEABLE ONE
  • 29. KNOWING YOUR FINANCIALS WILL BUY YOU STAKEHOLDER ‘CAPITAL’ AND CREDIBILITY
  • 30. WHICH MEANS YOU CAN KEEP DOING WHAT YOU LOVE – DEVELOPING AND MANAGING LEADING PRODUCT PROPOSITIONS
  • 31. THANK YOU! aralph@kineticsuper.com.au +61 429 512 566 au.linkedin.com/in/ralphamanda @ralphytown