Product By Numbers.
There are many great articles written on product management these days, along with new ways of thinking — lean start up, discovery-lead, design-thinking, devops to name a few. Most of these focus on directing development towards market or user needs and continuously iterating. Being intimate with your market and users is a given if you want to stay relevant. However, if you want to stay solvent, you must know your numbers, and this is often ignored.
Whether you are pitching to your finance director, your board or your Venture Capitalist, everyone expects the customer story to captivate and the numbers to convince. Being fluent in finance-speak gives you an automatic credibility with those purse holders. This was driven home to me recently when my team kept failing to convince my organisation’s pricing board of our proposed pricing strategy. I spoke to the stakeholders and the team and the root cause turned out not to be a bad argument, but that we were making it in the wrong way. I booked myself and my entire team onto finance training and using this new knowledge we were able to get our approach approved with little additional effort.
As with any change in approach I encountered some resistance from my team — at first they were concerned I was trying to turn them into accountants. Whilst a noble profession, my team prefer designing the beans rather than counting them. Covid also presented a problem. We had tried to arrange this in person before the lockdown but had to fall back on online session. You may be questioning, isn’t it cruel and unusual to make product people sit through four ½ days of remote number gazing? Luckily the subject is not as dry as it seams and the training was excellent.
We used a company call Finance Talking (www.financetalking.co.uk) and they were able to combine multimedia descriptions, practical hands-on sessions, breakouts and breaks in a way that kept it lively and interesting. There are several companies offering this type of training and you can tailor it to your needs — Finance Talking made sure they covered the subjects we asked them to and used the numbers in our annual reports to keep it relevant. It was well worth it as my team immediately related to the scenarios and took away relevant practical tools and tips.
They explained global economic trends and how these drive investment decisions. How we can dissect P&Ls and balance sheets to get under the covers of what is going on. We focussed on our organisation’s P&L and how some of our product decisions impacted this, how profit is impacted by increasing price vs increased volumes. How costs and expenditure are linked. How increasing confidence in measures such as Net Present Value, Discounted Cash Flows and Internal Rates of Return can massively change the financial equation. With these tools my team are now able to respond to precision questioning from finance professionals and hold their nerve when getting business approval for new product development or portfolio decisions.
The best product managers combine solid business acumen, strong communications skills and technical vision. Too often ideas do not get support because the business case just does not stack up. Pricing strategies flounder as the wider P&L context is not quite understood. Being conversant in finance speak is another great tool to improve senior-stakeholder management. Product Managers can often get stuck down at the feature specification level and context switching to your board’s agenda can be dizzying. Being finance-literate helps you to understand senior stakeholder perspectives and speak their language. Getting their support for your product strategy is critical. Without it, your business is at risk.
