Day 19/30: Embracing business metrics 📊

Business acumen is really another form of cause-and-effect thinking

Photo by Kelly Sikkema from Unsplash.

Business acumen is important to develop and hone. Ultimately, companies whose profit and loss statement (”P&L” for short) relies on providing products or services to their customers need to ensure they're bringing in sufficient revenue so they can continue serving their customer base.

While product management isn’t a pure business role, it definitely warrants business-oriented thinking, starting at a certain level and increasingly so as you go up the ranks.

You don't need to have studied finance, accounting, or economics to start wrapping your head around business metrics. In fact, I started picking up business terminology from Investopedia, as I was starting to learn more about personal finance.

One of the most pragmatic places to start in the workplace is to reach out to your partners in Finance or Pricing—whichever business function that is responsible for monitoring financial performance in your organization. Be curious about their job, and they will likely be more than happy to help you understand which metrics they measure to monitor the company's financial health and how that impacts company-wide or product-specific strategy and planning.

Take notes, draw diagrams, or synthesize the information in whichever way best suits you to do your best to make sense of how your product’s performance impacts the performance of your company’s overall business model, as well as the company’s core revenue streams. Ask your partners on the financial side of the organization and even your stakeholders to sense-check your understanding of these relationships between the products you oversee and business results.

Your ability to connect the dots between product metrics and business metrics will help you to make better informed decisions as to which levers in the product to play with and when. This increases the odds of your product development team delivering a product that retains existing customers and resonates with prospective customers then converts them. This will earn the trust of your manager, their peers, and perhaps even their leaders.

As today’s parting thought, Melissa Perri recently hosted Giff Constable, and I enjoyed their conversation about honing your financial chops as a product professional. Give it a listen.