The tech industry has gone a long way over the last decade evolving what we recognise today as modern product management. In our drive to improve practices and deliver outcomes instead of outputs, many organisations have lost sight of some vital fundamentals.
We need to embrace empowered teams and balance them with commercial foundations. Product development is an investment, so don’t ignore the return on investment. I know, it’s not the fashionable side of product management. But an average product development team of a few engineers, a product manager and a designer cost half a million pounds. Unless your organisation is a charity, the problems this team solve must support the business objectives. Remember product development can directly impact the cost of acquisition, churn rates and upsell conversion.
In addition, your product development teams must deliver customer value and software which is a pleasure to use. No one said this was easy! But, it can be simplified into three key areas for you to focus on, which gives you more chances to succeed.
- Product strategy to deliver the business objectives. Your product strategy needs to consider commercial metrics such as cost of acquisition and net revenue retention.
- Your team mindset needs to encourage test and learn approaches. You need cross-functional teams who can innovate. Innovation = sustainable growth.
- Product development teams set up to successfully deliver. They need the right skills, appropriate configuration and processes that support, not hinder.
This weeks topic was inspired by one of my coaching clients. They recently celebrated they had passed the 100% Net Revenue Retention (NRR) milestone. I am seriously happy for them! The next goal is to reach 120%.
If you don’t track NRR, don’t worry. Reaching over 100% means they will grow revenue even without signing new clients. It is the secret sauce to exponential growth.