Category Archives: Organization

Product Management Metrics (part 2a)

My  conference call on PM Metrics with Tom Grant went quite well yesterday. It was a round table discussion with good points made by several participants.

While we did talk about a number of topics, the metrics discussion dominated the first 1/2 of the call.

One of the questions  — What metrics should be used to measure the effectiveness of Product Managers? — got me thinking a bit.

My answer on the call was that first the focus should be on metrics for the Product Management organization, and then a breakdown from there on metrics for individuals based on objectives and tasks that support the goals of the organization.

To me that seems like a logical approach, because all other organizations in a company, includes sales, marketing, technical support etc. have metrics defined and measured that way.

So what’s the problem?

So why is it so hard to come up with metrics for the Product Management organization? Well,  it goes to the heart of the major issue with hi-tech Product Management today.

And that is that most companies don’t look at Product Management as a holistic function within the company, but rather as a set of individuals or small teams working on a variety of product related tasks.

Look around and see how the focus of Product Management is different in different companies.

Look at how widely the reporting and organizational structures are for Product Management. It is part of Marketing in some companies, part of Engineering in others, a standalone department in others.

Look at the ongoing debates related to when Product Management roles should be defined and introduced in a company.

If you’ve worked in or have been exposed to Product Management in different companies, compare and contrast the tool sets (or lack of them) used by Product Management organizations versus the tools used by other departments to do their jobs.

And if people don’t look at Product Management and it’s objectives in any holistic and standard way, how can they set about defining and measuring key metrics for the Product Management organization?

Metrics should focus on measuring intended outcomes

For Sales organizations, the key metrics  (product sales/bookings etc.) are directly tied to the intended outcome of the function: generating sales and revenue.  There are numerous secondary metrics that are tracked such as  sales breakdown by product/product family, by deal size, by geography, by new vs. existing customer etc.

And don’t forget all the sales funnel metrics that are used to track progress and success, such as average time to close, win/loss ratio etc. The important metrics are clearly tied to the intended outcomes of the activity of the sales organization.

For marketers it’s a bit more complicated because there are different roles in marketing and different intended outcomes. The two primary outcomes that can be applied to marketing are related to lead generation and market/industry awareness.

And from there numerous metrics can be identified related to number of leads, cost per lead, lead quality, lead to prospect conversion ratio etc.

Metrics for awareness are numerous, but basic metrics focus on “mentions” by press, analysts and other influencers in publications, reports, blogs, and via social media such as Facebook and Twitter.

And what of Product Management?

What is the primary objective of Product Management? In a previous article on this blog entitled Product Management Metrics (part 1), I defined the mandate of Product Management as:

To optimize the business at a product, product line or product portfolio level over the product lifecycle.

Don Vendetti of Product Arts, wrote a series of guest posts, entitled Measuring Product Management. In part 3 of his series, he provided his definition of the Product Management mandate:

To deliver measurable business results through product solutions that meet both market needs and company goals.

I like Don’s definition.  Both definitions share the same spirit about business focus,  but Don’s phrasing is clearer and more explicit than mine. But I do think that mention of the product lifecycle is needed because that has a huge impact on the objectives and the required focus of Product Management.

Don’s use of the words “measurable business results” is crucial to this discussion.

So what are those business results? Well it depends on the business and the company goals. 🙂

Those goals depend on the many things. Some companies care about revenue. Others care about market share. Others care about profitability. Others only care about getting acquired. And those goals can change with time.

Some choose to be technology focused, while others are sales, marketing or market focused. Some companies have a single product, while others have portfolios of products.

Depending on the company’s goals, size and level of maturity, the market conditions, it’s financial status and it’s overall strategy, Product Management’s objectives will change and so the metrics to measure Product Management will also change.

I’ll stop here, but I’ll pick up this discussion in an upcoming, and long overdue post that will be entitled Product Management Metrics (part 3).

Make sure you read Part 1 and Part 2. 🙂

Saeed

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Crowdsourcing ideas for Canada’s future

Yesterday, I posted Canada’s Innovation Gap (part 3) where I discussed some ideas for solving the lack of innovation that exists in Canada.

This weekend, the Liberal Party of Canada is hosting a conference in Montreal focusing on Canada’s future.  The conference is called Canada at 150: Rising to the Challenge. It’s a non-partisan conference bringing people from different industries,  political views and areas of Canada together to discuss 5 key challenges related to the nation. Those challenges are:

  • Jobs Today and Tomorrow: the Productive Society of 2017
  • Real life issues for Canadian families: How do we care?
  • Energy, Environment, economy: Growth and Responsibility in 2017
  • The Creative and Competitive economy
  • A strong presence in the world of 2017: Commerce, values, and relationships

What’s great about this is the relatively open process they’ve used to get the participation from all parts of the country. Clearly with an agenda like this, the topic of innovation was discussed.

The following panel discussion, along with Q&A is well worth watching. Some really frank and honest comments are made.

(click on the image or click here to go to the video. NOTE: The first minute or so is in French and then it moves into an English discussion. )

A great comment from the early part of the discussion came from panelist Roger Martin, Dean of the Rotman School of Management, University of Toronto.  He gives his definition of innovation and invention.

Innovation does not equal invention.  Invention is producer driven. Someone says, I want to have some kind of gadget. And they dream it up in their lab or basement or garage. And it may not be of interest to anyone else. That’s invention.

Innovation is driven from the user or the consumer side…it’s about improving the experience of the end user or consumer.

Note the point that innovation is driven from the user or consumer perspective. It doesn’t mean they drive the innovation, but that their needs must be central to the innovation process.

Later on, when answering a question about the role of taxpayers and the government in helping spur innovation, Martin says quite bluntly:

I made the distinction earlier about invention and innovation. The problem for Canada and it’s been this way for a long time is we don’t have an innovation policy in Canada. Unless you call benign neglect a policy. We have an invention policy and in fact all of our money goes for invention and that’s the gross error.

I love this statement as it’s so straight forward and unapologetic. We need more people like Martin to speak out this way.

I strongly recommend listening to the full discussion. They discuss value of design in new product development, the reasons for lack of commercial success for Canadian “invention”, the sad state of the VC industry in Canada and much more. It’s very honest and in many places quite astute, and I feel, long overdue.

Saeed

Questions for Product Managers

It started with an interview on Red Canary, talking to Product Management leaders in Toronto, including Alan Armstrong, Stephen Pollack, Lee Garrison and Roy Pereira.

Interestingly enough, I know all of these people personally. I have worked with  Lee & Alan, worked for Stephen, and know Roy through very close common contacts.

In the interview, they each answered the following six questions:

  1. Tell us about the best product you’ve ever encountered? Why do you like it?
  2. How do you know a great product manager when you meet one?
  3. What’s your favorite interview question?
  4. When is the best time for a start-up to hire a product manager?
  5. What has been the defining moment in your career?
  6. Mistakes. What was your biggest?

Steve Johnson took up the challenge and posted his answers to those questions on his blog, and most recently Scott Sehlhorst did the same.

I thought it was time to join the discussion myself.  So here are my answers to those same six questions.

Tell us about the best product you’ve ever encountered? Why do you like it?

I’m a big fan of any product that “just works” or surprises/delights me in some way. I don’t have a “best” product, but here are a few that I really like and use regularly.

  • The Blackberry – It does what it promises,efficiently and in a very compact form factor. It’s not perfect, but it’s really good, and it can take a beating like no other device I’ve seen. I’ve dropped my Blackberry many times and it is no worse for wear. To quote an old advertising phrase — “it takes a licking and keeps on ticking”.
  • Dyson vacuum cleaner — I’ve blogged about Dyson previously, but after 3 years, the thing still sucks more than any other vacuum and leaves it’s competition in the dust. Sorry couldn’t resist. 🙂 What really amazes me about it is that their customer service is also really great. A small part broke on the bottom of the machine. I called the toll-free number clearly visible on the cleaner itself. The person on the phone quickly confirmed which part was broken and they shipped me a replacement free of charge a couple of days later. The cleaner was clearly designed for this kind of diagnosis and service. Awesome.
  • The Honda Civic — We’re a Honda family so I don’t have experience with other brands of cars, but then why would I need to? I love the Civic because it just works. I’m terrible when it comes to maintenance and oil changes etc. but even with minimal attention it gets me where I need to go.  It’s both totally reliable and easily affordable. That’s what I want in a car.

How do you know a great product manager when you meet one?

If a product manager adheres to all of these rules, then they must be great! 🙂  Certainly product managers need to be smart, analytic, understand technology and markets, and be great communicators and leaders.

But if there is one thing that I think really defines a great product manager, it’s the ability to “connect the dots” in seemingly unrelated or conflicting contexts.  Perhaps another way to say this is product managers need a strong mixture of creativity, curiosity and intuition.

Steve Johnson answered this question with the line:

A great product manager sees patterns.

Scott wrote:

Great product managers are polymaths, with several areas of deep expertise and skill.

While written differently, these are similar answers and tie in well with the ability to connect dots.

A lot of times product managers need to find solutions to problems that are highly constrained — usually WRT budgets, resources or time. Finding solutions that satisfy business, technical and market requirements, and being able to sell those solutions to executives or other doubting Thomases are hallmarks of a great product manager.

What’s your favorite interview question?

The one I like to ask potential product managers is:

What one word best describes Product Management?

I’ve asked that question on the blog. Here are the results.

It’s always interesting to observe interviewees struggle with the question as it usually catches them off guard. And of course, once they come with an answer, the obvious follow up question is “Why?”

When is the best time for a start-up to hire a product manager?

This is a great question and core to how our industry understands and values Product Management.  I’m clearly biased here, but I have to agree with Stephen Pollack’s response:

Thirty days before you start the company.

This answer also lines up perfectly with what Bill Campbell of Intuit said about Product Management.

Too many people don’t actually realize the full scope of the Product Management role. It’s not just about product requirements, even at the very earliest stages of a company. I’ve seen too many founders of companies create offerings (I won’t call them products), that didn’t completely address market problems, that weren’t differentiated from competitors, or  that didn’t target specific market segments and problem domains.

And what happened then? They brought in “a product manager” to help address the issues. Sorry, way too late. Why spend another year and potentially millions of dollars to fix problems that you could have addressed right at the start?

What has been the defining moment in your career?

I’d say it was leading the Product Management efforts of the flagship product of a public company in Silicon Valley. The release was described by the CTO as “the biggest, most ambitious release in company history.”

That effort consumed my focus  for almost 2 years, and I learned so much during that period. I’ve shared some of it publicly.

I ran a large beta program during that release and used that experience to write this article on betas.

I gained a greater understanding of how to optimize cross-team communication.

I also gained some insights into leadership, particularly when dealing with people across departments, geographies and areas of focus.

Mistakes. What was your biggest?

I’ve certainly made my share.  My biggest was probably not understanding (for far too long) the impact personal motivations and politics played in Product Management. I’ve written that for product managers,  “Every activity is part of a sale.

Virtually everything we do in Product Management relates to influencing others to support our goals. In most companies, Engineering won’t simply do what the PM asks.  Darn. 🙂  And certainly in larger organizations, with significant constraints, misaligned objectives and even compensation conflicts, people will focus on what is of benefit to them. They will optimize locally (i.e. what’s best for them or their team).

A lot of what Product Management is about to get teams to optimize globally (i.e. what’s best for the product or the business), sometimes at the cost of local optimization. This is where selling becomes important. The sale is in getting other teams to agree to do what you need, and to get that, you have to understand their motivations, drivers, goals and objectives. Once I understood that, life became much easier for me as a product manager.

Saeed

P.S. I’d love to see the Cranky PM’s answers to these questions.

The Origins of Product Management (part 2)

NOTE: Part 1 can be found here.

The high technology industry, and in particular, the software industry is much younger than the Consumer Packaged Goods industry. And the role of brand or product management in high-tech and software is even younger still.

Certainly one of the earliest software companies to apply “brand management” principles to software products was Intuit. Intuit was founded in 1981 by Scott Cook, who was a former P&G “brand man” himself.

In developing Quicken, Intuit’s first product, Cook wanted to create finance software that home users who were NOT financial experts could use.  Cook knew he had to differentiate himself in the market. There were already a number of home finance/checkbook balancing software products available, but most of them were difficult to use for the average person.

Cook wanted someone like his wife, an intelligent woman but not necessarily a finance or computer expert, to be able to easily perform the calculations she needed. To do this, Intuit went so far as to emulate the look and layout of the traditional physical checkbook, within the limitations of the monochrome 80×25 character text screens of the time.

This type of innovation, and focus on customer needs, led Scott and his team to create one of the most successful and enduring consumer software packages of all time.

The book Inside Intuit, gives some great insights into the early days of the software company and describes many of the challenges they faced, but also many of the innovations they made. One unique innovation, at the time, was their “Follow me home” program.

In the 1980s, ease of use was not something you would associate with personal computers, particularly those running DOS or Windows. The technology was still relatively new and a lot of software vendors were simply focused on getting software out the door, let alone focusing on usability. But Intuit was not one of those companies.

They realized that the only way they could truly understand how their customers used their software, was to observe those customers in their actual usage environment. i.e. the home. So Intuit created the “Follow me home” program where they would get permission from Intuit customers to send a company representative to the customer’s home and watch the customer install and use the product on their home PC.

Note task 3.1 (field studies) in McElroy’s memo.

These field studies, called ethnography in the social sciences, are only now becoming common in technology companies. Intuit gleaned many insights from the Follow me Home  program which led them to continue to enhance their product and create what can only be described as an incredibly loyal customer base.

In fact, Intuit’s customer base was so loyal that when Microsoft tried to lure them away by offering free copies of its rival Money product, very few customers took that offer.

Today, aside from their successful products, Intuit is well known in the software industry for a very strong Product Management discipline. I’ve previously blogged about Bill Campbell’s (Intuit’s Chairman of the Board) views on Product Management. Certainly, Intuit had a pivotal role in the development of technology product management but others helped shape the profession as well. I’ll get into one other very influential person in part 3.

Saeed

Related Articles:

Guest Post: Measuring Product Management (part 3)

This is part 3 of a series of guest posts by Don Vendetti. Don is the founder of Product Arts, a product management consulting company in Seattle.

NOTE: If you’d like to write a guest post, contact us and let us know about your idea.

——-

In part 1 and part 2 respectively, I discussed the answers I received from company executives on the following questions.

  1. What is the value that product management brings to your company?
  2. How would you measure success for the group and individuals? i.e. on what metrics would you reward them?

In this part, I’ll look at the following question.

Question #3:  Is Product Management Effective, in Your Experience?

The dominant answer here was a resounding SOMETIMES.    I’ll let some comments speak for themselves.

(VP Eng) “Never adequately. It’s a tall order and they are often placed in the organization where they cannot succeed or with unenlightened leadership. If they are in sales they become too deal / feature / near term focused. If they are in engineering they become too development / feature / development focused. If they are in marketing they become too abstract and disconnected. Ideally they are in line of business management reporting directly to an SBU Manager or GM. Where they have done best it was where the corporate imperatives were obvious, and they were well connected and led.”

(VP Ops) “Currently, our model defines product management in terms of marketing activities, so the value is less than optimal.”

(GM) “Yes, the good ones. As always, if their direction is good, and they have goals that make sense, and they are managed, they can usually meet or exceed their goals.”

(VP Eng) “Both successful & unsuccessful.   Needs to have an environment for success – expectations, aligned groups, business goals.  PM needs to stay outwardly focused.   Needs to bring customer into the company.”

(Program Mgmt/Former VP Mkt) “For Agile shops, the product owner role is critical and delivers great value to the business and to dev teams — the product cannot be built without one.  For more waterfall oriented shops, it can be tricky.  I find that product managers that seek to translate market requirements (from marketing/ customer facing teams) into product specs for engineering program managers will often deliver dubious value.  It is best if the product manager is closer to either the customer (e.g. product marketing manager), or to the developers (e.g. program manager) to avoid being an odd-man out. “

Summary

Let’s compare where we ended up as the primary value of Product Management with the Mandate previously posted on this site:

The Product Management Mandate These Results
To optimize the business at a product, product line or product portfolio level over the product lifecycle. To deliver measurable business results through product solutions that meet both market needs and company goals.

They are both in the same ballpark with regards to business and products, but there is definitely a divergence beyond that, with the Mandate missing the key element of MARKET NEEDS.

It is a primary expectation of company executives that product management is a bridge between the internal functions and understanding the market needs and this got lost in the Mandate.

Where we still don’t have clear guidelines are the actual measurements to use, but we do have a general direction in which we need to head.   It is imperative for product management to be able to tie their activities to measurable business results to be perceived as adding value for executives.

These do not have to be tied directly to revenue or profit, but there is ideally some way to tie to leading indicators of them – usage, penetration, retention, quality, cost, etc.

If the feature sets you’re prioritizing or the activities you’re doing do not somehow support an improvement in these indicators, it’s time to rethink what you’re doing… pronto.   It also important that you communicate where you’re impacting business level results so that the execs are aware of it.

I have also personally found that the “intangibles” carry a much higher weight than emerged from these exec comments.   Be assured that even if there is no formal process for measuring how you are perceived in the organization, you are constantly being assessed for leadership skills and ability to collaborate and facilitate internally and externally.   These will ultimately steer your career progression.

Lastly, it’s clear from the final comments that product management success is strongly correlated to a supportive organization with clearly defined roles, objectives and mission.   If you find yourself in a company without these, it’s time to exercise some leadership to help create them or to perhaps move on to greener pastures.    It’s really not that much fun to continue to struggle where personal success is unlikely.

Don

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Related Posts

Measuring Product Management (part 1)
Measuring Product Management (part 2)
Measuring Product Management (part 3)

Guest Post: Measuring Product Management (part 2)

This is part 2 of a series of guest posts by Don Vendetti. Don is the founder of Product Arts, a product management consulting company in Seattle.

NOTE: If you’d like to write a guest post, contact us and let us know about your idea.

——

In part 1, I described my conversations with some industry executives on the question:

What is Product Management’s overall value to your company?

The answers were quite interesting. In this part, I’ll look at the following question:

Question #2:  How would you measure success for the group and individuals?

This question generated a few different discussions and in many instances I got the response “they SHOULD be measured on…”, which indicated their expectations and reality are different.

That being said, most respondents were strongly on the side of tying rewards to business results.    These included:

  • (#1 by a wide margin) Meeting product business plans and forecasts for revenue and profitability
  • Achieving key business objectives for the specific period, including meeting delivery milestones for releases and launches
  • Achieving key market metrics – adoption and usage, penetration and market share, customer satisfaction and retention

Only a few mentioned the difficulty of looking at current business results only, such as revenue, while needing the product manager to be focused on producing future business results.

One also recognized there may be multiple product managers on a large product, with revenue difficult to associate to each.

These advocated a more blended set of measurements that included specific assigned metrics or deliverables within a specific period.

Product quality was mentioned a few times, and included measurements such as returned product, trouble tickets submitted, major bugs found and SLA performance.

There were also some who raised the need to include some “intangibles”, specifically around how well the individuals were perceived in the organization.

This included satisfaction ratings of internal stakeholders based on timely and effective support of other functional groups, how well they performed at driving product delivery and resolution of issues, how well they collaborated with others, and in providing general leadership.

To capture the intangibles, a few companies performed peer reviews or 360 degree reviews on a regular basis.

A few highlighted that the metrics used for a B2B company versus a B2C were somewhat different.

In the B2B company, responsiveness and effectiveness in supporting a direct sales team for major accounts was a key need.

In a B2C company, there may be less on-demand support of the sales channel, and a higher emphasis on marketing and usage metrics.   (As with everything else, this is probably highly variable from company to company, but may be worth a whole separate article.)

Specific comments included:

(CEO) “I am sure every company is different, but revenue, customer retention, customer satisfaction, net promoter score, and market share (are the measures of success).”

(VP Biz Dev/PM) “We measure and reward based on a combination of product performance in market and other metrics related to on-time delivery for new products, quality metrics, and other qualitative measures based on the PM’s role in providing timely and effective support to marketing, sales, and other functions.”

(CEO) “The success metric has to be on net contribution.  Given the lifecycle stage of the product, it may even be managing losses during the formative stages, but ultimately, the only goal of any product is to make money.  The market is the best indicator of success. If quality is down, sales will be off or returns high. If the product doesn’t meet needs, there will be no sales.  If the product is a poor value against the competition… you get the idea.”

Take-Away

The key take-away from this section is the expectation level of the senior executives on product management being measured against business results.  These other executives are heavily dependent on product management for making the right product choices to ensure business success, and they believe product managers should be tied to company results, just as the execs are.

With business results emerging as the top priority, I would reorder and rework my previous value list to be:

  • Delivers measurable business results through product solutions that meet both market needs and company goals.
  • This is accomplished through:
    • Creating a shared awareness of the customer and market needs to the internal functions
    • Shaping the product solution and delivery plan
    • Facilitating and supporting cross-functional and external activities required to achieve the planned objectives

So how well does Product Management do at meeting expectations? I’ll get to that in part 3.

Don

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Related Posts

Measuring Product Management (part 1)
Measuring Product Management (part 2)
Measuring Product Management (part 3)

Guest Post: Measuring Product Management (part 1)

This is part 1 of a series of guest posts by Don Vendetti. Don is the founder of Product Arts, a product management consulting company in Seattle.

NOTE: If you’d like to write a guest post, contact us and let us know about your idea.

——

Measuring Product Management – The Executive Viewpoint

There have been plenty of discussions about how to measure and demonstrate the value of Product Management within companies.    From posts on this site:

and from a recent roundtable at the October Seattle ProductCamp, there’s an obvious challenge for the profession.

I decided to follow the prescribed Product Management protocol – I went out and talked to my customers.

Here’s the feedback from some senior executives running technology companies.

My list of execs is comprised of 12 individuals from my contact list, most of whom I’ve worked with at some point and are now scattered around in varying roles.   All have been on the senior executive staff of at least one company.

Most are in the Seattle area, some are CEO/COOs, some are technical heads, some are marketing heads and several have worn multiple hats – business development, engineering, marketing, general manager, program management.   Some have been product managers at some point or managed it as a function.

Company size varied from multi-billion dollar enterprises to startups still trying to get off the ground.

I contacted them through email initially with 3 questions:

  1. What is the value that product management brings to your company or to your department?
  2. How would you measure success for the group and individuals, i.e. on what metrics would you reward them?
  3. (Bonus question) Have you found product management to be effective in meeting the goals, in your experience.

On some of the responses, I probed further through email or met with them in person to discuss.   Some responses were intriguing.

Question 1.  What is product management’s overall value to your company?

There was a strong agreement of the strategic value expected from product management, and that fell into a few categories:

  • Bringing an understanding of the customer and the market into the company
  • Creating a vision, direction, and focus for the product internally and externally
  • Defining product/business plans to meet company strategy and objectives
  • Evangelizing the market needs and product solutions internally

At a tactical level, the front-runners were:

  • Managing product features, product requirements, competitive analysis, prioritization and roadmaps
  • Working with and supporting other functional groups – development, sales, support, marketing

Some comments included:

(VP Eng) “Product Management needs to be the voice of the customer AND the business and they need to advocate for both.”

(VP Biz Dev/PM) “Product management provides a key linkage between our end customers, the field sales and support organizations that support them, our engineering and QA teams responsible for product innovation and delivery, and our executive team from an overall company and product strategy perspective.”

(COO) “Overall product direction and roadmap, clearinghouse for requirements, driver of product delivery.”

(VP Eng) “Right brain, big picture, strategy, positioning, how to win in the market.  Bring customer view into company.  Outline the product needed.   Evangelize the product internally.”

(VP Corp Dev) “Ability to distill corporate goals and objectives and customer / market needs into products (services / solutions) that are built and sold at positive margins!  That includes not just having the bright ideas, but the organizational savvy to make them real.”

Some interesting comments came from multiple respondents involved in Agile. They indicated the value of product management is even higher in that environment.  Working as the Product Owners with Development seems to raise their visibility as an integral piece of the machine.

(VP Eng) “In the modern world of Agile the product management role is even more critical. They are often embedded in a SCRUM team as a product owner or business owner. These highly cross-functional teams can move quickly and demand that the role is in touch with the business and on-demand available to the team – in early iterations for prototyping and market validation, in mid iterations for feature build-out and in late iterations for sustaining and ongoing investments.”

Take-Away

If I rephrase some of the key expectations from above, here is what I come up for the primary value product management brings to a company:

  • Creates a shared awareness of the customer and market needs to the internal functions
  • Drives product solutions that meet both market  needs and company goals
  • Facilitates and supports cross-functional and external activities required to achieve the planned objectives

So if this is what is valued, then what is actually measured?    I’ll get to that in part 2.

Don

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Related Posts

Measuring Product Management (part 1)
Measuring Product Management (part 2)
Measuring Product Management (part 3)