Leading Indicators-based Product Management

Carly Fiorina, the former CEO of HP, said in one of her speeches, I paraphrase, “The companies that survive in long term are managed and measured through leading indicators versus lagging indicators. A company’s quarterly results denote a lagging indicator because they represent the past decisions”.

I believe that Carly’s aforementioned quote is a very important principle on how one would manage a team, a company or a product. At work, I lead a large team to develop, maintain and continuously improve a large software-as-a-service product. And everyday, my team and I collectively make a lot of decisions on the product’s direction and day-to-day operations. However at the end of every day, I always think hard as did we make the right decisions that day? Did we make sure that our decisions will work in both short- and long-term? Did we make sure people understood how those decisions will be carried out? Would our customers like the changes made through the decisions? Would our employees accept that change that was associated with our decisions? Would we achieve the product vision?

After understanding Carly’s approach on leading indicators-based management, I have concluded that as far as our decisions incorporate the leading indicators , we will be fine for the most of them. Personally, I always try to approach all product decision discussions with the following leading indicators in my mind.

Follow the Users

This leading indicator has been proven again and again, and the consumerization of the technology is taking this to a new level. If the product features are not continuously developed and enhanced based on the users’ feedback, the product will fail. The SaaS model and the Blogosphere have made the users’ feedback based development very fast and highly effective. Do we really need old user group meetings and conferences? I don’t think so. I believe the Blogosphere can provide instant feedback and SaaS model has enabled instant features deployment and beta testing.

Satisfy the Existing Users

This leading indicator has been proven more than once even at a very large scales. A classic example is AOL. At the start of the Internet, the AOL portal was the main hub of the early Internet users. Today, you go ask school kids about AOL – I can guarantee 95% responses as “what is AOL?” In contrast, the word Google would have the opposite response. So why did AOL lose the brand when it had a head start of almost five years against Google? Simple answer: They didn’t satisfy the users and with a single click, the users switched to the better websites.

Prepare for the Growth

In February 2008, Yahoo! Live was launched the live videos - well ahead of the video industry leader, YouTube, which will release the live video sometime later this year. However, the Yahoo! Live service went down the first day of its go live day and got a bad reputation from the start. What a colossal mistake! Yahoo! simply failed to understand the contemporary users, who don’t have any tolerance for a product failure until they really like the product. Yes, the occasional outages are tolerated, but only after the users like the product, not before they can even get to use it. So, this indicator requires us to always plan the infrastructure for growth. If you cannot sustain a world wide go live, stage it by country. If the country’s population is too much to contain, do a limited invitations-based beta. As an example, though, I cannot confirm this; the Gmail product entered the market through invitation-only approach. I would speculate the creation of a scalable product infrastructure could be one reason behind the invitations-only approach.