Product Leaders Focus on More than Product
There is more to Product Leadership than Product.
When you move into a role leading the Product function at a company in whole or in part, there is a lot more to consider than just building a great product.
You are suddenly guiding how the product is made (Process), managing and mentoring other product managers (People), and ensuring that the company makes money with the product you are building (Profit).
The 3 P’s
You may have heard of the “3 P’s” before.
Roughly, the idea is that every part of a product business can be broken down into People, Process and Product activities. The theory goes, if you optimize and manage each of these areas, you will see business success.
I love constructs like this that give a mental model for how to think about all of the components that go into the complex undertaking of running a business. I’ve found this model to be particularly useful, and not just in my specific Product departments, but for my peers in Success, Engineering, Sales, and Marketing.
I have used the 3 P’s as a core structure for setting Product department goals, and ensuring balance and intentionality across all three.
What are our People, Process, and Product goals for the quarter and year?
What has happened in the last week/month related to People, Process and Product?
I continue to use this structure, with one small change.
One more P
Let’s say you optimize People, Process and Product.
Sounds great. Is the business successful?
What is business success? Achieving the business’ mission, and earning the ability to continue pursuing that mission. That usually means making money (Profit), which is not explicitly mentioned in the original 3P’s.
I don’t believe that Profit adheres to the Field of Dreams principle here - that if you build an org with great People, Process, and Product that the profit will just magically appear. My experience is that to make a business sustainable you need the financials to be explicitly considered, managed, and owned.
So adding one more P we have People, Process, Product, and Profit.
The 4P’s are generally applicable to any department at a product company. So what do they mean in a Product Leadership context?
The 4 P’s For Product Leadership
What do each of these really mean for a Product Leader?
For each P, consider what it means specifically for a product leadership role, what categories of activities it might cover, and what questions you might be answering when working in that area. I’ve provided a baseline definitions below, but keep in mind definitions and ownership will vary by company.
People
People is about investing in humans.
This is all about ensuring that you and the people you manage are successful. I use the word humans because we aren’t talking HR policies here (in recent years ‘People’ has become a synonym for the HR team/function).
Like any manager, you need to mentor, manage, and lead your team. Is your team succeeding? Do you have the right people on your team, are the people on your team growing and learning, do you have the right org design.
Managing a team of people leaders is different from managing other individual contributors. You are leading and managing leaders. This means that another aspect of the People area for product leaders is managing how you and your team are interacting with people outside of your team. Product, when done well, is a highly interactive and collaborative activity.
Categories
Management, mentorship, growth, org design, collaboration, stakeholder management, evangelism, and leadership.
Process
Process is about investing in structures and tools that will make your team effective and efficient at creating great products quickly.
This means operating and optimizing your product process: documenting it, refining it, measuring it, teaching it, rolling it out, and investing in structures and tools that drive high-value outcomes for customers more predictably.
Categories
Product discovery, optimizing your existing product, delivering product, and product development.
Product
Product is about maximizing the value of your product to the market with a vision and strategy that delivers outcomes to your customers and drives business success for your company.
This means deeply understanding your product, the market, your customers, and shaping something that will deliver value to the market quickly.
Categories
Vision, strategy, understanding users, understanding customers, product data literacy, deep understanding of domain, deep understanding of market, deep understanding of business + company, and deep understanding of product operations.
Profit
Profit is about earning the right to continue as a business, and that means making money.
This means finding a way to monetize the product, and to meet the revenue goals you have as a business. It can take the form of everything from jumping on a call with a prospect to close a deal, to working on increasing lead-gen at the top of your funnel, to defining pricing models.
Categories
Pricing, new sales, churn reduction, upgrades, downgrades, market traction, cost management
Where You Spend Your Time
Your time is a valuable resource that you can and should be intentionally managing like any other resource.
Using the 4 P’s as a model, on average, where are you spending your time?
Think about your time as a pie chart. What percentage of your time is spent, in a given month, on each of the P’s?
You might find things that you do regularly that take up > 5% of your time that don’t fit into any of the 4 P’s. Every product leader performs activities that don’t fit under any of the other P’s.
Tax
Spending Time On Things other than the 4P’s is Tax
For the activities that don’t fit under the 4 P’s, I call them taxes. Every hour you spend on those activities is an hour you can’t spend on one of the P’s.
Side note taxes are normal, and probably ok if it is less than 10%. If you are spending 80% of your time on taxes, that is different and something to step back and think hard about.
The Best Place to Spend Your Time
Every product leader has far more to do than they could ever possibly get to.
There is always more you could be doing that would provide obvious benefits. It then becomes paramount that you ruthlessly prioritize your time, so that you spend every hour where it makes the biggest difference.
There is no one right answer.
The truth is that spending an hour on one or the other does not yield the same benefits, and there is an inter-relationship between them. It may feel unpredictable - like one or the other is absolutely critical - until it’s not.
Also, It depends on your business context. What the best ratio is for you will vary at each company, and vary over time at a single company.
As a general rule, I would suggest stack-ranking them as follows, and then spending as much time as possible on the higher-ranked areas as makes sense in your business context.
1. People
2. Process
3. Product
4. Profit
Force Multipliers
Why spend more time further up on the stack?
I believe that in this order, they are cascading force multipliers.
Specifically, spending one hour further up the stack will produce multiplier benefits for every level lower in the stack.
Cascading Force Multipliers
The People Force Multiplier
If you hire and mentor great people, those people will create great process, great product and drive profit. Hands down, this is the most efficient use of your time that will drive the most benefit.
If you are spending time on your people - training, hiring, mentoring - that investment will have a 10x improvement on process.
Said another way, if you spend an hour on people, that hour will eventually drive a 10x improvement on process more than if you had spent that same hour on process.
The Process Force Multiplier
Spending an hour on process is similar. The better you are at creating high-value products quickly, the faster your product will improve.
If you spend time on improving your process, it will eventually yield a 10x improvement on the product over what you would have seen if you spent that time directly improving the product.
The Product Force Multiplier
Spending time on Product is what we all want to do, and what everyone expects us to do. For every hour I spend improving the product, you’ll eventually see a 10x improvement to profit more than if you had spent an hour on profit directly.
Profit
Spending time on Profit is the lowest common denominator. It is critical to bring in revenue, no one would dispute that. However, as a product leader, spending an hour on a call with a single prospect helping to close a deal, is far less impactful to the business, in the long term, than spending that same hour on any of the other areas.
If you chain these multipliers together, you start to see that investing your time further up the stack can be a game changer. Investing an hour on people could have long term benefits to your profits of 1000x more than spending that same hour closing a customer.
1000x?
So spending 1 hour on coaching a Product Manager could yield as much benefit as if I spent 1000 hours supporting sales in closing deals? That sounds crazy. Is it crazy?
It is not crazy. An example:
Let’s say you spend the time it takes to teach a product manager how to do competitive research and consider it in how they solve problems for customers.
They, in turn, find ways to bake competitive research into the product process they and their teams’ use, such that it becomes a permanent part of how they operate.
The result is the release of product capabilities that are intentionally designed to compete better in the market. Sales gets product capabilities they can sell over and over, with better traction driving faster revenue growth because they are more competitive on day 1.
This is great news for an individual release of the product. The better news is that you can expect that every capability released in the future by these teams will be better in the same ways.
This future recurring benefit is where the multipliers come from. The PM (and their teams) know how to make more competitive features. The PM and their team have changed their process to reinforce creating more competitive features, making it more predictable and repeatable. The product has new capabilities that can be sold over and over by sales.
That is much more benefit in the long term. Let’s call it roughly 1000x.
Considering your Business Context
These multipliers are a great general rule of thumb, a starting point.
In reality it is critical to consider your business context in order to determine how to use this model.
Where are you as a company?
What is the state of your company for each the 4Ps?
How much time do you have to improve them?
Here are a few guidelines around the model that will help you assess where it makes sense to spend your time based on your business context.
Law of Diminishing Returns
The Law of Diminishing Returns applies to the 4P’s.
Specifically, spending an extra hour on any one of the P’s will deliver increasing returns at first, eventually shifting to delivering constant returns, and then shifting to diminishing returns.
As you spend more and more hours on a particular level, you will start to reach diminishing returns for each additional hour. The point of diminishing returns will vary based on how much room there is for improvement in each area.
For Example:
Spending all your time on Process, for example, might be great if you have no process today and it is hurting you badly. As you invest more and more time into Process, the room for improvement will be become less and less, and the value of spending time on Process will become less and less. If you keep spending inordinate time on Process, you might hear someone say ‘We are just doing process for process’ sake’. It might be time to pause to reassess how much time is being spent on process, at least until your business context changes.
You are ideally trying to spend enough time on each of the 4P’s to get to ‘good enough’. If you’ve reached that point of ‘good enough’, consider shifting some time to other areas.
Long Term vs. Short Term Returns
When you will see the full benefit from investing time in each area will vary: some will produce short-term benefits, others will produce long-term benefits.
In describing the force multiplier effect, I repeatedly used the word ‘eventually’. This is because
The benefit you receive from spending an hour in each area is time-released over longer periods as you move up the stack.
Spending an hour on Profit today may result in a sale tomorrow. Spending an hour on People today may result in 1000x more impact on Profit in the long term, but it may take 12 , 24, or even 36 months to see that 1000x return.
Depending on your business context, you may be more or less patient about when you need to see returns from your investment of time.
For an earlier-stage company, you don’t usually have the luxury of a lot of time. You may need to demonstrate market traction in the next 3-6mos in order to get your next round of funding. If that is the case, you are probably spending more time lower on the stack.
For a later-stage company with an established product, you may have a larger team with longer term goals and be spending more of your time further up the stack.
For a small company, say 20 employees, you need less process to be effective. You have fewer people, and small blips in profit may have a big impact on your business. You may be spending more time lower on the stack, and your point of diminishing returns for Process may be earlier.
For a large company, say 10,000 employees, you will have a larger product team, more engineering teams, and a need for more process. You will have the ability to delegate work further down the stack to intermediate product leaders. In this case, you are probably spending a lot more time further up the stack.
Business Context Is Always Changing
It’s important to realize that business context does change. The frequency of change, and the magnitude of the change varies based on the company, but change is always there.
When I was at a hyper-growth company, the business context had high-magnitude changes frequently. I would reassess where my time was going at least weekly, and sometimes daily. That is not the norm, but it can happen.
At a mid-size or later stage company with an established product a good rule of thumb is probably checking in on where your time is going about once a month.
Part of that check-in should be planning ahead for what you think you should be spending time on in 1, 3, 6, or 12 months in alignment with how you think your business context may change in that timeframe.
Exceptions + Customization
There are exceptions to this model, of course.
Think of this as a starting point to making sense of where your time goes, and where your time would be best spent.
Consider whether 10x is the right multiplier for you. Consider for each person on your team, their learning velocity and how that impacts when there will be benefits. Consider which processes could deliver the most return if invested in. Consider where you have already reached diminishing returns.
Customize the model to account for what is unique about your business context.
Intentionally Planning Your Time
It is worthwhile to create an intentional plan for how you will spend your time, and then check in on that plan on a cadence.
Planning
There are three simple parts to this plan:
Current: Where are you spending your time.
Planned: Where do you want to be spending your time.
Steps: What steps can you take to reach your goal.
Rinse and repeat on a cadence.
Shifting Where Your Time Is Spent
As you consider what steps you can take to achieve your plan, it may be helpful to consider some basic categories:
Delegation
One of the best ways to affect change is to find someone already at your organization to who you can delegate the work you are currently doing, so you can move to other areas.
The person you delegate to does not have to work for you. You can delegate work to people in sales, or success, or marketing, or other cross-functional roles. Enlist them to the cause, ask them to take on those responsibilities and mentor them like you would someone on your team.
For example, if you are spending too much time managing process, consider who has a passion for process that you could enlist. This could be someone on your product team, the engineering team, the design team, you name it. It is a learning and career opportunity for them, and provides you with space to focus elsewhere.
Training
If you can’t find anyone internally who is capable of doing the work without you, consider spending time training someone so that can take that work, instead of doing it yourself.
What you are doing here is shifting your focus to a People focus - teaching them to fish - and letting them do the work with your help. Eventually, you will be able to reduce your involvement and focus elsewhere.
For example, if your Product team is struggling with strategic decision-making and need your involvement, build a training plan. Let them get at-bats on defining strategy, give them feedback, and work on it together. With time, you will be able to defer more and more to them.
Deferral
Ask yourself, does that work really need to be done right now? What happens if we don’t do it for a month? Can we live with that consequence, in order to gain these other benefits?
I have found that product leaders often assume they must solve a problem now, when they could probably live with it. A quote from a CEO I’ve worked with that I like is, “We’ve been living with this for years. We can live with it for a little while longer”.
Hiring
The obvious choice, and also the hardest, is to hire people into the organization who can take on work you are doing today.
This can be a great option when the skill you need is something that is hard to learn, and/or is in short supply within the organization. You can hire the skills you need into the organization, such that you can delegate the work quickly when the person arrives.
This is also the slowest choice, because hiring takes a lot of time. Before choosing this option, make sure you can actually accept the consequences and opportunity cost of you continuing to do the work. Often times, those costs are not acceptable, and I find that I need a dual track solution, with a short term and a long term component: defer & hire, or delegate & hire.
Summary
You have, and will always have, far too much to do as a Product Leader.
As a result, it is critical for you to spend your time where it will have the most impact. Almost everything you do every day as a Product Leader can be categorized into one of People, Process, Product, and Profit.
You can have dramatically more impact by considering the force-multiplying effect of People, Process, and Product and intentionally investing your time where it makes the most sense.
As a first step, assess where you are today. Determine one area where you could be spending your time more effectively, and generate three steps you can take to shift your time. Check back in on your plan in a few weeks, and reassess.
Because, after all, there is a lot more to Product Leadership than Product.
