Decision Making in Product Managment

Lead Bullets, an old post from Ben Horowitz, is a strong reminder about the hard decisions product managers face. His company was square in Microsoft’s targets, so he furiously sought out a silver bullet (or two) that would enable them to retain their competitiveness. In the end, Ben’s colleague had to set him straight.

Ben, those silver bullets that you and Mike are looking for are fine and good, but our web server is five times slower. There is no silver bullet that’s going to fix that. No, we are going to have to use a lot of lead bullets.

This set Ben along the path of making the decisions necessary to focus his development team. While many of Ben’s decisions were fairly straightforward, others are not. As others have noted, good decision making as a product manager is absolutely essential.

The more important the decision, the more important the analysis. We have many tools and methods available to use to help during this period, but it’s still important to remember the analysis is only as good as the person working on it. Below are high-level thoughts on how to approach your decisions, regardless of the tool involved.

  1. Stay informed. It goes without saying that you should always stay up-to-date with industry trends and customer wants/needs. Time spent here not only pays off during planning phases, but also during fire drills. Being educated keeps you focused on solving the right problems.
  2. Check your assumptions. Bad decisions many times come from faulty assumptions. Take the time to re-visit what you think you know.  Also, make sure you’re humble enough to recognize that there may be facts critical to a decision missing. The need for self-reflection  grows directly with the importance of the decision.
  3. Develop alternatives. There is typically no one right answer. Make sure you have options to effectively compare and contrast. If you’re unable to create any, seek out others that may hold differing view points.

Other tips, tools, and templates are listed below. The list is far from comprehensive, so your suggestions to the list are welcome.

Links on Decision Making

Books on Decision Making

  • Thinking, Fast and Slow: Thorough explanation of the author’s System 1 and System 2 beliefs and how these forms of thought work with and against each other. Great for learning about “how” we think.
  • The Goal: A Process of Ongoing Improvement: A classic, written in narrative form, about seeking to identify and exploit the constraints in your business.
  • Mastermind: How to Think Like Sherlock Holmes: It has many of the same concepts found elsewhere, but using Sherlock Holmes as the point of focus made this an enjoyable read for me.
  • Six Thinking Hats: It can be a bit touchy-feely for some, but still provides a usable framework for collecting data, organizing it, and making decisions.

This post originally appeared on The Product Management Digest.

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Tools: The SWOT Analysis

The SWOT analysis is one of the most common tools used by a product manager to audit the strengths, weaknesses, opportunities, and threats facing their product. While a SWOT analysis may lack the depth of other tools, it can become a crucial first step in linking together a product strategy to real market conditions. The shorter period of time needed to complete the analysis and its collaborative nature also make it a great practice for teams seeking a common understanding.

Elements of SWOT

Not very surprisingly, SWOT is an acronym for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are intended to be internally-focused sections of the analysis, while opportunities and threats are more external and market focused.

  • Strengths: These refer to internal abilities, both tangible and intangible, that provide a distinct benefit in the marketplace. Strengths can be found all areas of the organization, e.g. marketing, finance, customer support.
  • Weaknesses: On the other hand, organizational or product traits that hold back your success can be listed here. This is not a location to list personal complaints, but rather to highlight areas that can be addressed.
  • Opportunities: This list highlights environmental factors that a firm can benefit from if acted upon within a selected timeframe. Some examples of this could be a changing demographic or regulatory change that an existing product line is well-positioned to take advantage of.
  • Threats: These are changes to the external environment that hold the potential to cause harm to a firm or product line. These factors are typically not directly controllable and must be managed as risks.

Typically, the final results of a SWOT analysis is presented as a single square with four quadrants or as four columns. See below for an example of the four quadrants.

SWOT template example

Things to Remember

While arguments can be made for focusing on internal factors first, it’s recommend to start with the external portions of a SWOT analysis. This will force the product manager to first identify and define market conditions before attempting to isolate relevant strengths and weaknesses.

A SWOT is not meant to be a long list of every item uncovered during the analysis. To minimize list bloat, it’s useful to focus on observations that repeatedly arise during the investigation. It can also help to shorten the time frame to be as close to the present as possible so as to minimize over-stating threats far in the future versus those that are more immediate.

If possible, use a small team to do the analysis. SWOTs can become extremely subjective if done by only one person. Input from other functional areas will help to offset biases, as well as highlight areas that may be missed by some team members.

Don’t make one pass through the investigation and call it complete. It helps to go through each section multiple times as new information is discovered. A strength could easily highlight a new opportunity and vice-versa.

The results of a SWOT is not the end of the process. A traditional SWOT will not define relative priority of each item within a quadrant, nor the relative importance of items across quadrants. Similarly, it can also be difficult to convey differences between existing opportunities and threats versus future ones. It’s important then to use the results as a staging ground for further study.

Learning More

Beginning an analysis using a simple SWOT can be an effective method for starting the right conversations on the future of firms and product lines. If you’d like to learn more about SWOT and how Box Parker can help, please contact us for a free consultation.

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The Importance of Product Management

It’s simple, a company will not survive unless earns profitably from the products and services it offers. From this obvious, yet fundamental statement comes the next question: how does a company create compelling products and services?

The importance of this question cannot be understated and many companies have attempted to address it through the use of product managers within their organization. A role that has become so important, that one blogger recently stated that the product manager is the 4th most important role behind the CEO, other C-level positions, and general managers. More surprisingly, he placed this role above product development and sales.

Why is this?

It is not meant as a criticism of other departments or their contributions, but rather a growing need within organizations to provide a focal point to guide stakeholders like marketing, sales, and development towards answering:

1. Who truly is our customer?
2. How does the customer actually buy?
3. What product or service actually fulfills the “job to be done” in their life?
4. Can we profitably create the product or service the customer when the customer needs it?

By employing the right product management principles within a company, these questions (and others) can be systematically investigated and answered. The product manager’s responsibility then is to help their teams have a holistic understanding that aligns around their customer needs. Once done, determining what to build, where to sell, and how much to charge begin to get much clearer, thus providing that much needed first step towards market success.

If you’re interested in learning more about our product management services, contact Box Parker here.

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