The document discusses the importance for product managers to understand product financials and metrics in order to optimize business and customer value. It emphasizes that product managers need to be able to predict demand, measure performance, and create value for both customers and the business. Key responsibilities include understanding customer needs, developing a business case, measuring performance metrics like revenue, costs, and margins, and using tools like a product dashboard to track and communicate progress. Understanding financials gives product managers credibility with stakeholders and allows them to effectively advocate for their product strategy.

1. IF ONLY I’D HAD A TARDIS:
WHY YOU SHOULDN’T RELY
ON TIME TRAVEL TO MANAGE
YOUR PRODUCT FINANCIALS
Amanda Ralph
Head of Product – Kinetic Super
22 August 2015

2. #prodmgmt @ralphytown @pcampmelb

3. A core role of the product manager is VALUE CREATION –
value to the customer; value to the business

4. You must be able to predict (forecast), measure and create value

5. AS PRODUCT MANAGER YOU NEED TO:
• Know and understand your customer: understand the
customer need – the job to be done
• Identify the market opportunity and the business drivers
• Translate those needs into product strategy and requirements
• Develop a business case that defines the expected costs and
return on investment
• Test, learn, iterate and take your proposition to market

6. BUT IT IS NOT JUST A CASE OF ‘BUILD AND SHIP’

7. YOU NEED TO MEASURE PERFORMANCE

8. UNDERSTAND YOUR FINANCIALS
• They will help you identify where the
opportunity exists to realise benefits
and deliver optimal value… at scale
• And to know where problems and
threats to your product performance
exist….

9. YOU NEED TO MEASURE PERFORMANCE SO YOU CAN
OPTIMISE BUSINESS AND CUSTOMER VALUE

10. WHAT TO MEASURE?

11. DEFINING YOUR BUSINESS METRICS
• They must be measurable – you need to be able to track them back to
business/value driver
• They must align to your product and business objectives
• They must be actionable – i.e. you have to be able to do something about
them; to intervene and make an impact

12. They will be a combination of numerical business values
(within your P & L) as well as more intuitive ‘gut feel’ indicators

13. • Revenue
• Costs – cost to acquire; cost to serve; cost to retain
• Management expenses (your business overheads)
• Margin – gross and net
• Volumes – number of customers/’widgets’ acquired, lost
• Market share
• Actual versus Forecast – OVER TIME
• Measure of channel effectiveness
• Customer satisfaction

14. Together, these form your product dashboard

15. Source: www.medibank.com.au
CORE FINANCIALS

16. Source: www.medibank.com.au
CORE AND MARKET DATA …

17. Source: http://www.slideshare.net/saeed_w_khan/product-management-metrics-be-the-product-ceo?next_slideshow=1
SAMPLE DASHBOARD – STATUS AND KEY INSIGHTS

18. Your dashboard should enable you to understand performance
at a ‘snapshot’ and then to drill down in more detail within
each measure.

19. It should be easy to communicate and quickly highlight
opportunities and trouble spots

20. TOOLS OF THE ‘TRADE’ FOR A PRODUCT MANAGER

21. Product Canvas by Shardul Mehta (The street
smart Product Manager)
http://streetsmartproductmanager.com/product-
canvas/
Great for identifying on a single
page your product strategy
and the elements of your
proposition that you need to
deliver to solve for the job to
be done – including core
business value and financials
PRODUCT CANVAS

22. Useful once you have identified
the job(s) to be done to focus on
core drivers of value across
different dimensions of the
business – these can then
become central to business case
and defining measures of success
and should be reflected in your
product dashboard.
VALUE DRIVER TREES

23. A FINAL WORD ON WHY YOU SHOULD KNOW YOUR
FINANCIALS…

24. LOOK FAMILIAR?

25. AS PRODUCT MANAGER YOU NEED TO HAVE
EXCEPTIONAL INFLUENCING SKILLS:
• You need to be able to build trust and confidence in your product
strategy
• The business needs to get a sense of the degree of business risk
and business value that your strategy will deliver
• And they need to be able to understand ‘what success looks like’

26. In larger corporate environments, you will need to be able to
navigate and deliver your product vision confidently to:
• Investment committees
• CFOs
• Actuaries
• The Board
• The Executive Committee
• And any other governance ‘clearing houses’ that your
company requires

27. If you are a start up, you will need to be able to
convince:
• Funding partners – investors; crowd sourcing
• Grant committees
• And any other governance ‘clearing houses’ that
your start up requires

28. YOU NEED TO BE THE CONSUMMATE DIPLOMAT –
A WELL INFORMED AND KNOWLEDGEABLE ONE

29. KNOWING YOUR FINANCIALS WILL BUY YOU
STAKEHOLDER ‘CAPITAL’ AND CREDIBILITY

30. WHICH MEANS YOU CAN KEEP DOING WHAT YOU LOVE –
DEVELOPING AND MANAGING LEADING PRODUCT
PROPOSITIONS

31. THANK YOU!
aralph@kineticsuper.com.au
+61 429 512 566
au.linkedin.com/in/ralphamanda
@ralphytown