A Comprehensive Survey of Product Management: Measuring Added Value and Maximizing Efficiency

A Comprehensive Survey of Product Management: Measuring Added Value and Maximizing Efficiency

Product management is a multifaceted role that requires a combination of skills and expertise. In a comprehensive survey conducted across various industries, three key aspects of product management were identified as the most frequently valued: communication, execution, and product sense. On the other hand, design/UX, empathy, and raw intelligence were found to be the least frequently valued qualities.

This survey also shed light on the influence of product managers within their respective companies. It was observed that PMs have more influence than other functions in only 70% of the companies surveyed, compared to the 80% benchmark. The spectrum of influence varied widely, ranging from companies like Zynga, where PMs hold significant power, to Apple, where PMs have the least influence.

To truly understand the value of a product, it is essential to measure its effectiveness and added value in comparison to alternatives. The effectiveness of a product is highly dependent on the context and the specific task it aims to solve. One must consider that the perception of value is not always rational, and subjective factors play a significant role.

To measure the added value of a product, two key steps can be followed. Firstly, determine the variables that define the effectiveness of solving the "job-to-be-done." These variables could include factors such as usability, convenience, and reliability. Secondly, compare the available solutions based on these variables. It is crucial to understand the weight and importance of each factor for users, even if they are measured in different units.

For example, let's consider the efficiency of online payment providers. We can assess the commission rate of the service and the payment throughput as key variables. By comparing these variables, we can determine if a new payment provider creates added value in comparison to an existing one. This comparison not only helps in understanding user behavior but also provides insights into market dynamics and the competitive landscape.

Amazon serves as a prime example of a company that consistently creates added value for its customers. Through strategic initiatives such as the Prime subscription and the launch of Fulfilled by Amazon (FBA), the company has managed to increase efficiency and reduce costs. The Prime subscription, launched in 2004, not only reduced costs for subscribers but also improved delivery time. This led to an increase in demand and a decrease in the share of fixed costs, allowing Amazon to further reduce prices.

Similarly, the introduction of FBA enhanced the reliability and speed of delivery, further increasing demand and lowering prices. Amazon's unparalleled efficiency in solving the problems of end-users has positioned it far ahead of its competitors. As noted by Michael Porter, the goal is not to be the best in the industry but to offer a unique product tailored to the specific task and context of a particular segment. This metric effectively characterizes the effectiveness of the "job."

But how can we measure this effectiveness? One approach is to analyze actual product usage data, such as the time spent in the app, profiles viewed, and messages sent. By assessing the effort required for a user to achieve a desired outcome, such as getting a date or engaging in an active chat, one can gauge the added value provided by the product. Another method is to conduct regular studies where a group of individuals invests the same effort in your product and a competing product, followed by a comparison of the results, such as the number of active chats or dates.

Ultimately, people choose a new product because it improves their lives in some way. Therefore, the core focus of product work should be on increasing the added value. To achieve this, it is crucial to follow a two-step process. Firstly, determine the variables that characterize the effectiveness of solving the task at hand. Secondly, compare the available products based on these variables. This approach enables product managers to continuously assess and enhance their product's value proposition.

In conclusion, product management requires a deep understanding of user needs, effective communication, and flawless execution. By measuring the added value of a product and comparing it to alternatives, product managers can gain invaluable insights into user behavior and market dynamics. To maximize the impact of product management, it is essential to prioritize the variables that define effectiveness and continuously strive to enhance the product's value proposition.

Actionable Advice:

1. Prioritize effective communication and flawless execution as these are the most frequently valued qualities in product management. This will help build trust and confidence among stakeholders.
2. Invest in understanding the variables that define the effectiveness of your product in solving the job-to-be-done. Regularly assess and compare your product to alternatives to identify areas for improvement.
3. Use data-driven approaches to measure the added value of your product. Analyze actual product usage data and conduct comparative studies to gain insights into user preferences and market dynamics.