Great product leaders have a keen vision about how to drive business outcomes to the next level. Unfortunately, they are often tied down negotiating with engineering, coaching their team and other tasks—so their message never gets heard. Plus, they get mandates to make their organization ‘product-first,’ but don’t have the time or resources.
The worst part?
The value product leaders bring to the table gets lost in the shuffle. They drive revenue, accelerate throughput, and drive the product conversation. In essence, they deserve a seat at the C-Suite table. So how do they get there?
The Product Equation: product KPI that really counts
An executive-level product leader looks past innovative aspects of their product to demonstrate actual business success metrics. So what is a true core product KPI?
Some might say it’s product-market fit, but according to Moatti, this isn’t really an endpoint you reach which is then followed by growth mode. Feedback, requests, new customers, and other factors affect product-market fit as it moves through different stages.
Perhaps the best product KPI is what SC calls “The Product Equation”:
Revenue = number of Customers (aka Acquisition) * number of Transactions/Customer (aka Engagement) * Revenue/Transaction (aka Monetization)
A great product drives all three metrics in the equation, and each metric depends on a specific strategy:
- The number of customers drives a product’s acquisition strategy.
- The number of transactions per customer drives a product’s engagement strategy.
- Revenue per transaction drives a product’s monetization strategy.
Bottom-up trend: what makes a great product leader or manager?
If you measure the success of your product team solely by the Product Equation, you end up with great project managers, not great product managers.
“By definition, a great product manager brings innovation inside a corporation,” says Moatti. “So, they need to do things differently, constantly, otherwise, they stop innovating. It’s critical for product managers to stay sharp, so product leaders must create opportunities for continuous learning at scale for their teams.”
True product leaders mature past managing features and team level issues. More importantly, they move the needle in measurable outcomes that transform business and life at scale.
The difference is hard to quantify with metrics, but it’s material: it’s the difference between a good product and a great product. The best product managers understand that great products make us better human beings. SC frames her vision around three perspectives: Mind, Body, and Spirit.
- Mind – Your product should learn and evolve. Use tools to map your funnel end-to-end and methodologies to optimize conversion. Think outside the funnel with hooks and shortcuts.
- Body – Make it beautiful. Rational beauty is the efficient UX. Subjective beauty is the wow factor. Both are key. Solve problems efficiently in an emotionally pleasing way.
- Spirit – Your product should provide meaning. It’s personalized, but it also respects privacy. Ask for data as soon as possible for mission-critical info and as late as possible for non-mission-critical data.
Top-down trend: the age of product-first organizations
In the past, the product function was typically a sub-function, reporting to engineering or to marketing. Now, it’s becoming a C-Suite function. For technology brands, it’s not unusual to see engineers, designers, and product managers at the C-Suite table, because it’s the nature of their business.
“I see more and more companies say that they want to become a product-first company,” says Moatti. “What it means is that they realized they could turn their product organizations into a competitive advantage.”
However, this trend influences several other industries now. Why? Because as technology visionary Marc Andreessen says, software is eating the world. Companies that do not embrace technology are unlikely to survive.
Brands that want to become “product-first organizations” oftentimes promote their product leaders into the C-Suite. The Chief Product Officer, therefore, has accountability at the highest levels in regards to tech, team, and business influence.
Aligning onward & upward: characteristics of great product leaders
Great product leaders bring these bottom-up and top-down trends together. They deliver a compelling plan to build great product teams that deliver great products and to transform competencies into a sustainable competitive advantage. However, that’s still the exception and not the norm. Why is this?
First, it’s a matter of priorities. Product leaders are consumed by the important and urgent: the #1 challenge they face remains negotiating tactically with engineering, sales, and marketing. They struggle to carve out the time to create a high performing culture.
“I still hear that it’s about conflict management,” says Moatti. “What I’d love to hear instead is that it’s about collaboration and alignment.”
Next, it’s a matter of complexity. There’s no blueprint for what a world-class, product-first organization looks like. The competencies of a product manager vary greatly depending on the product lifecycle stage, the industry, level of seniority, and so on.
Already pressed for time, product leaders are at a loss as to where to begin up-leveling their teams. It doesn’t help that almost 3 out of every 4 product managers have two years or less of product management experience. It’s no wonder that the #1 request from rank and file product managers is mentorship.
Product leaders who want to create fantastic, high performing product teams should start by offering their teams personalized mentorship at scale. That’s the key to the C-Suite.
Products That Count offers product mentorship programs that work at scale for any organization, large or small. It’s completely personalized, and it curates actionable knowledge from some of the most successful product leaders in the world.
If you’re a product leader who wants more for themselves and their teams, or if you want to learn more, please contact us today.
About the speaker
SC Moatti is a technology visionary, entrepreneur and investor. She is the founding partner of Mighty Capital, a Silicon Valley venture capital firm, and Products That Count, one of the largest communities of product managers, leaders and founders in the world. Previously, she built products that billions of people use at Facebook, Nokia and Electronic Arts. She also serves on boards of both public and private companies, including mobile technology giant Opera Software (OPERA:Oslo). An award-winning bestselling author, Moatti frequently gives keynotes on business and technology, and has been featured in The Wall Street Journal, the Harvard Business Review, and on NPR. She lectures at Stanford Graduate School of Business, where she earned her MBA and has a Master of Science in electrical engineering. Andrew Chen, one of Uber's top executives, called SC “a genius at making mobile products people love.” For more information, visit scmoatti.com.