Is it possible to manage P&L as a Product Manager? There are great reasons for product mangers to be focused on profit. And, under the auspices of empowerment, it’s fairly common for executives to ask product managers to think like “Product CEOs.”
While this is a good idea in theory, it’s hard to implement in reality. Decisions affecting profitability are often out of a Product Manager’s hands. According to one recent industry survey, only 15% of Product Managers were held accountable for P&L.
Even if they don’t have actual control over P&L, Product Managers often feel responsible for P&L. If you are in this awkward position, you might want to try using a product scorecard, a key deliverable in a product playbook.
A product scorecard is a good substitute for a P&L because it helps to avoid the trap of focusing solely on development productivity metrics that answer questions like “How many defects?” “How many hours?” “How many stories?” or “How many features?”
A product scorecard is one part of shifting focus to the business of the product:
What are development costs against plan? Revenue against plan?
How many calls to support? Is that more or less than the monthly average? What is the trend?
How many leads from marketing? How many were rejected by sales?
What is your win rate and what are the top reasons by you lose?
What are the trends in Net Promoter Score or other loyalty-related metrics?
To apply this in your own company, ask yourself: What are the business metrics you should have at your fingertips? What questions are your execs asking that you should be able to answer? Be the source of metrics on the business of the product and you’ll fill that awkward space between feeling responsible for profit without actually being able to control the P&L.