There are good product managers, and then there are great product managers. What’s the difference? Both good and great product managers (PMs) are more than competent when it comes to the basics, but our research has shown that the top 1% of product manager goes beyond the basics and also do the following:
Market Validation: As pointed out in The Lean Startup, we move from a PM “knowing” what the market wants to a PM that knows how to determine what the market wants.
Our research has shown that good PMs spend a large percentage of their time internally focused on building a great a product; while the great PMs speed most of their time focused externally on the market and use MVPs (Minimally Viable Products) to test assumption about market needs.
Knowing when to shut down the project: As Yogi Berra famously said: “The future ain’t what it used to be.” Sometimes product development projects do not live up to their initial promise. Knowing when to shut down a project can be an important ingredient to success.
Most new product ideas start out with great expectations, but over a period of time, some start to fade. Worse, this process often happens a bit at a time until one day you realize you have wasted a lot of time, money and energy on a project that should have been killed long ago. You’re the proverbial frog in the boiling pot of water.
Realistic Budgets: In Great Expectations, Charles Dickens famously wrote: “Ask no questions, and you will be told no lies.” Ask your average product development engineer how long something will take, or how much it will cost, and you may get wishful thinking. Sometimes people tell you what you want to hear versus what you need to hear.
In order to make good decisions, you need good information. This is especially true when it comes to new product development. By definition, you are doing something that has not been done before—perfect information about its cost and/development schedule is just not possible.
Processes: Our research has shown that great product managers are more likely to work under a formalized product development processes. The great PMs have clear “gates” that each product must pass through before moving on to the next stage. They are more likely to have well-documented Requirements Documents. They are more likely to use formalized methodologies when making engineering-market trade-offs. They are more effective informally communicating who is, and who is not, their ideal customer.
Knowing the Difference Between Invention and Product Development: It does take a rocket scientist to know that cold fusion would sell like hotcakes; however, any PM tasked with the development of such a product is sure to fail. The development of a technology is not the same as the development of a product. Product development is about taking existing technologies and combining them in a new way that meets a market need. If your project requires the invention of some new technology, you may want to think twice.
Decision Making: By definition, the great PMs made better decisions than the good PMs. Our research showed that great PMs had a better understanding of the decision making processes than the good PMs. Good PMs made a decision largely based on gut and on “how we always have done it.” Great PMs had a deep understanding of decision fallacies and were able to facilitate collaborative decision making that was largely free of these decision errors.