Measure What You Manage
A bad product release is a good reminder of the importance of making teams accountable for happy customers. I found that out the hard way when 1,400 calls were backlogged at the customer support help desk within a week of a product release.
A typical call backlog was 75-100 calls, so we knew something was seriously wrong. But the head of development didn’t believe it was a problem with the release.
Instead of escalating into finger pointing, I asked him to have his developers listen in on customer calls for two hours. When they did, they were blown away by the pain we were causing. The product was fixed within a week.
This experience really tightened our integration with development. As an organization, it illuminated how disconnected from our clients the product we were putting into the marketplace had become. That realization led us to change how we measured product management and used customer support information.
For product management, it drove us to require onsite visits as an integral and ongoing part of product management’s job. They had to provide monthly indicators of being in the market, with a quota of nine call reports for onsite visits each quarter. If they traveled, I didn’t approve their expenses until they filed that report.
For customer support, we continued to look at all the usual suspect information to measure customer support in our monthly dashboard report: number of calls, response time, how fast issues were resolved and average hold time. It was probably one of the most measured parts of the business, but we had been missing the anecdotal information and how to integrate that into our business.
We realized how critical it is to give our entire organization touchpoints out into the market. The developers took a level of ownership in that product that they never would have taken had they not heard what those customer service people were having to deal with every single day.
We required everybody in product management, development and marketing to sit in on customer support calls for one hour per month. That connected the market with all functional areas of the business.
Before this, the customer-support team felt beat up, since nobody calls to tell them when the product’s working really great. All of a sudden, their role as the focal point where customers called into the business was given the value it deserved. Suddenly, everyone started to feel ownership in our overall corporate strategy.
The onsite visits and the time in customer support ensured we were in line with market needs, but we also needed to ensure we were on track with the strategic direction of the business.
For example, the division president said our goal was $65 million in revenue, with a 60/40 split between our existing customer base and new sales. I then cascaded those goals down to my 100-person product management, marketing and customer operations teams.
I defined how much of that $65 million each of our product lines and the product managers would be responsible for. From there, they knew what we had to accomplish in terms of dollars and which features the products needed to get that business. I expected them to demonstrate what contributions their individual products were going to make to help achieve our financial goals and the tactical activities they were going to employ to get us there.
The key artifacts that drove their accountability were a roadmap and a business plan. Depending on the business, they had to have a 12 to 18 month vision. (Anything beyond 18 months, and I knew they were just making stuff up.) They had to keep updating these on a quarterly basis.
From a product profitability perspective, rather than net margin, my product managers were accountable on gross margin—since product managers usually can’t have a direct impact on fixed expenses, such as the cost of building space or utility bills. I expected them to be aware of both, though. As a department, we had gross-margin goals, and each product manager was responsible for renegotiating contracts to get better rates on things like third-party software to help us get there.
In short, we took the $65 million financial expectation for the team and translated that down to each individual employee’s ability to contribute to making that goal happen.
Goals should be aligned to the corporate strategy.There has to be a direct correlation between the product management’s product and the contribution it’s making to the company. Nothing drives me more crazy than a company that says they’re going to increase revenues by 10 percent, without correlating it down to the product level and individual accountabilities. You have to understand where that 10 percent is coming from and what specific actions you are taking to get that 10 percent.
By being aware of goals, you end up with results that you can measure.
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