Strategic Approach to Product KPIs
Product KPIs that matter
“You can’t improve if you don’t measure” — Peter Drucker
Today, in the Product Management space, we often have the problem of plenty.
Products are not struggling, because we don't measure. Rather, the struggle is from too many measurements or measuring wrong things.
The Strategy for Product KPIs is highly influenced by:
The Product and its strategic business objective
The current stage in the Product Life Cycle (PLC)
Relevance with user or customer value and experience
Impact of selected KPI and its measurement on Product Strategy
Additionally, it might be tempting to select multiple (too many) KPIs. However, it has the inherent risk of false indications and spreading the focus too thin.
The below steps help ensure a higher focus on the right KPIs:
Identify the Product's long-term goals and brainstorm on what it means from different aspects such as business, product, customer, user, market, competitor, internal team, partners, etc.
Establish/Identify/Agree on near-term milestones and customer/user needs that create a significant impact toward the long-term goals.
Brainstorm on events and achievements that would give you an indication if you are moving towards short-term and long-term goals or away from them.
List the indicators and measures that will be directly indicative of those events or achievements. Not listing the exhaustive KPI list here as it's a huge, freely available, and evolving list. (Maybe a subject for another blog another day)
Prioritize 1–2 key indicators that are highly correlated with the events and achievements and are reflective of customer value and experience as per the product’s current stage in PLC.
Identify another 2–3 indicators that represent the product’s progress but from a different aspect such as innovation, time to market, etc. to complement the earlier 1–2 key indicators.
This gives a set of 3–5 KPIs to focus on, but the job is just half done yet :)
Use these 3–5 KPIs and create separate hypotheses (and details, the more the merrier) around all of them based on planned/target milestones with intended corrective actions in case of deviations
Warning: The earlier step will not be easy and will need multiple iterations to get to the initial version. Keep an open mindset to revise this as you learn more to keep it SMART (Specific, Measurable, Actionable, Realistic, Timely)
Now is the time to spin the wheel and win! Have a data collection and reporting mechanism to monitor (the higher the data collection and KPI review frequency, the more Agile your product can become; but don’t overdo it) the progress and performance of the work done by your product team and the impact created by your product.
Apply PDCA (Plan — Do — Check — Act) to continue the improvement process and reap the full benefit of the KPI strategy that you have developed for your Product.
This is easier said than done and requires a lot of rigor, persistence, guidance, and trial and error to build the competency to maximize the benefits of applying the optimal Product KPI strategy.
About the Author
Priydarshan Jha (PJ) is a Product Leader with a vivid interest in working with People, Processes, and Platforms to create Product First organizations. He has expertise in Product Consulting, Product Strategy, Product Management, Product Agile Transformations, and coaching. He is passionate about mentoring and coaching learners in the Product and Agile space.
Connect with Priydarshan on LinkedIn and DM for more in-depth discussions!
Disclaimer:
The views and opinions expressed in this blog post are those of the author and do not necessarily reflect the official policy or position of the company they have been associated with. The information contained in this post is for professional learning purposes only and is not intended to be a substitute for professional consultation and advice. The author makes no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability of the content of this post. The author will not be liable for any errors or omissions in this information or any losses, damages, or other liabilities that may arise from its use. It is the reader’s responsibility to verify the accuracy and reliability of any information provided in this post before relying on it for any purpose.