Top 3 reasons — why product managers should focus exclusively on product goals rather than business goals 🎯

How often you have experienced that the business goals are enforced on the product team so that the organizations’ OKRs are aligned?
It’s the most common scenario & results in hampering the focus of the product team.

What are business goals?

Businesses aim to generate value in terms of financial growth, market growth, etc. Some of the key metrics tracked by businesses are shared below :

  • ⬆️ Market share
  • Gross revenue
  • Gross profit
  • Gross margin
  • ⬇️ COGS ( Cost of goods sold )
  • ⬆️ Customer base
  • Retention rate

Why PMs aren’t the owner of business goals?

Product managers aren’t the owner of these metrics because these metrics aren’t directly correlated to the product strategy. Defining product strategy is an ongoing dynamic task whereas the business goals are frozen as per the AOP ( annual operating plan ). As a result, product managers are devoid of focused strategy & thus can’t optimize on their finite time & resources.

3 reasons why PMs should focus on product goals

Overall product team & the PMs should invest their energy in addressing the product goals.

Reason 1 → Product goals are leading indicators vs business goals are trailing indicators 🪜

For instance, the business goal is to grow the market share. You observe the market share % in the company dashboard & realized that it is past performance. Now all the actions taken based on the market share % will be reactive measures instead of working proactively in ensuring to meet the market share % goal.

The business team decided the market share % goal based on some hypothesis assumed by them. It can be :

  • Reducing the current price point
  • Launching additional features which aren’t available with competitors
  • Acquiring the competitors

All the above hypotheses signals towards switch in user behavior. Let’s understand that.

Reason 2→ Switch in user behavior directly impacts business goals 👥

Change in user behavior qualifies it to be a leading indicator & thus drives the trailing indicators. For instance, let’s call out the key changes in user behavior on the above 3 hypotheses impacting market share:

  • Reducing the current price point → More users are now buying the product
  • Launching additional features which aren’t available with competitors→ Users looking for these features are being onboarded
  • Acquiring the competitors' → Non-overlapping users are going to experience your product for the 1st time

The onus lies in the product team working on enhancing the user experience in making any of the above hypotheses successful and thus delivering on the business goals.

Reason 3→ Product teams own user behavior metrics completely 👨‍⚖️

The product team has full ownership and is empowered to own the user behavior metrics. For instance, in order to drive user retention, the product outcome is uncurtained by other teams’ responsibilities. By deploying a continuous feedback loop with users, PMs can learn about the users’ change in preferences and behavior in real-time and can take corrective action to curb churn rate & thus protecting user retention.

As the product evolves, the user behavior changes should constructively contribute to the desired business goals.

PMs in charge of business goals have to collaborate with their leadership & respective business stakeholders in order to convert business goals into product goals that are within their command.

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Senior Product Manager @AngelOne, ex-@Flipkart, @Cleartrip. Interests: Product, Technology, Strategy, Startups, Fintech & E-commerce!

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Rohit Verma

Rohit Verma

Senior Product Manager @AngelOne, ex-@Flipkart, @Cleartrip. Interests: Product, Technology, Strategy, Startups, Fintech & E-commerce!

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