L. was the COO of a Series C startup. He was brought in as the startup entered hyper-growth and needed someone to help with all of that scaling. L., as one would expect, had a lot of experience in setting systems up, keeping everything running and organized, with proper procedures and dashboards in place. Backed by a rich business background, he took over the sales and marketing departments and started to put them on an operational pace that created stability and transparency.

At this point, L. took over the product department as well, but here he tackled a challenge he wasn’t prepared for. Unlike sales and marketing, who are responsible for very clear, measurable, deliverables (new/retained customers and leads respectively), product managers can’t be measured this way. The outcome of good product management work is not contained in the product department but rather manifested in the performance of many other departments (a product that sells and supports the company growth at the desired pace, a product that customers are happy with, developers who are working on the right things and at a good pace, a contained number of issues in customer success and so on and so forth). When the desired outcome is spread across so many departments, and there is additional work that is needed in each department to achieve them, measuring product managers becomes a very challenging task.

Determined to be able to measure the performance of product managers just like any other department, L. started looking into the actual deliverables of the daily product management work. He set a goal for how many meetings with customers each product manager has each quarter. That’s actually not a bad goal since it would encourage product managers to allocate time for this very important activity. But as L. continued to look at other fronts of the product work, he wanted to address product requirements, and that wasn’t as straightforward. Since at the time there was a lot of tension between product and R&D, one of the measurements that he decided to set for product managers was that requirements wouldn’t change after having been delivered to R&D. L.’s intentions were good: he wanted to set the expectations that product managers should be serious about writing great product requirements, but the measurement he set was way off and contradicted any productive form of agile development. 

While it’s easy to see why L.’s measurements didn’t work, setting good measurements for product managers is always a challenge. To overcome it we need to first understand what is the goal of measuring the performance of product managers.

The Different Goals of Setting Goals

Before you set goals for your product managers, you need to understand why you are doing it. There are a number of reasons to set goals for people in your company, but not all of them can be applied to product managers. 

If you think about L.’s example above, when setting goals for marketing and sales people, for example, the following reasons could apply:

Personal performance evaluation: you have benchmarks for what good performance means for an SDR, for example, and you want to make sure that all of your SDRs meet the standard.

Making sure the company’s operational pace is maintained: if to meet the business goals you know (based on historical data) that you need X leads, you want to give the marketing department X as a goal, and track performance against it on a regular basis to make sure the goal can actually be met.

Giving guidance and direction: generally speaking, when setting goals for people, they will try to meet them. So if you need the team to focus on a certain area – say sales of a new product you are launching – setting it as a goal helps to keep everyone with eyes on this ball.

As you can see, not all of these reasons apply to product managers, primarily because the product deliverables are not the most important part of the product manager’s work. So any attempt to measure product managers on the operational pace of delivering product requirements, for example, is bound to fail. You can measure it, of course, but it won’t give you a good indication of whether or not this person is performing well.

You can set goals that are related to company or business objectives, more on that below, but as a general guideline, you should treat the goals you set for your product managers as means to give them guidance and direction, not measure their performance or even the product’s.

Numbers Are Meant to Give You Ballpark Figures

This creates a lot of confusion since numbers and goals are specific by definition. For example, if the company has a churn problem, you definitely want to set a goal for the product manager (and other departments as well) to reduce churn. You might want to be even more specific – reduce it in a certain segment or at a certain phase in the customer journey, and of course, there is a numeric goal that the entire company needs to aim for. 

But in most cases, these numbers are not set in stone. You want to set goals that are challenging yet achievable, and by definition, it creates a range of options. Last week I talked about the inherent tension between hard numbers and deadlines – typically both cannot be met at the same time. That’s why I like the OKR method – it sets the objective (what we are actually trying to achieve here) as context for the actual results and numbers that we strive to see. 

The rule of thumb is that when assessing whether or not an OKR was met, if you were able to meet 70% of the goal you should consider it done. That’s because it was meant to be directional all along. While you want your team to do the best they can, since their success depends on so many other factors, you can’t put the blame on them if they didn’t succeed.

Of course, if someone doesn’t deliver time and again, after having an open discussion about whether or not these goals are achievable and what it takes to meet them, and you feel that the problem is with this person’s ability to deliver and not with other factors, it’s time for more serious action. But otherwise, leave your product managers’ goals for guidance and focus and not for strict measurement of their performance.

Product Success Has a Softer Side

If you want to help your product managers succeed, you must address the softer side of product management. There are so many soft skills that a product manager needs to master in order to be able to deliver the outcomes you really want from them. When you set goals, make sure at least one of them sets the bar for higher performance in a softer area: working with stakeholders, decision making, clear communication, or anything else you can think of.

Of course, this is less quantifiable than product metrics goals, but it is not less important. Think in advance how will you be able to tell if the person indeed met this goal. From my experience, in most cases, when the time comes to assess whether or not this goal was achieved, you will know. You don’t really need numbers for that.

The softer side of product management by the way is very different from the softer side of product leadership. As a product leader, when you set goals for yourself, make sure to work on the soft skills that matter at your level, not on the ones that were important when you were a product manager. This is one of the areas that we are investing in as part of the CPO Bootcamp – understand and practice the variety of soft skills that a product leader needs to master to make the impact you want to make. 

This rule of following the impact should guide you in everything I mentioned here regarding setting goals. Make sure you set the ones that really matter, not the ones that work for other departments.