Begin with baby-steps. Understanding income statements and balance sheets will provide you with an immense amount of knowledge on the workings of a company which will help you in creating a budget plan for the product. Understanding the How’s of finance will help you run on the ground for a longer period with the strategic, business and logical thinking. For your reference, many MNCs have their financial statements accessible to the public on media sites such as Yahoo!
2. Predict the ROI
If you have a new product, efficiently articulating the features to your stakeholders is essential. Financial reading will enhance your strategic thinking for the viability of your product idea and the key revenues for ROI as they will want to grasp your assumptions about the market opportunity. Financial analysis when done right, can serve you as the roadmap for execution.
Understanding from a User, Marketing and Technical perspective is vital; business understanding will ensure a smoother launch. A product usually begins from a business need. It further demands market and user research to validate the product idea and then funding for its development. The Product Managers will need business planning to engage with marketing, sales, UX, and development teams. This can be achieved only through a set budget and sufficient knowledge of your market space.
A Product Manager is aware knows his competitors in the market and has an in-depth knowledge of the services and features their product offers. It includes understanding their target audience, key differentiators, and profit in their business and product models. A prepared Product Manager will be able to grasp the situation and make a place for his/her product on the market. Knowledge of the financial data of capable competitors will provide a better picture to make valuable decisions about your product roadmap.
How valuable is your Product to your company? The brutal truth is that we are always likely to think that our product is bagging the company’s intention. On the other hand, we are only competing with other services and products. The key is to understand what percentage of revenue is your product creating directly or indirectly to your company? The more the profit, the more influence you will gain in your organisation.
The only way you can achieve is to expand your financial competency and become a Business-Savvy Product Manager.
Good Product Managers are tech-savvy with great soft skills, but great Product Managers are Business- savvy. Business expertise is one of the 4 pillars of Product Leadership and a common approach to master it is through an MBA, but not everyone has the time and funds to go through one. As valuable as they are, they are half-baked with the story of management. To get the complete baked dessert, one needs experience and mentor-ship to work in the real world.
I would say that Design Thinking is very important for product managers and it helps in many places. For example, even in a traditional product management, there is a lot of customer interactions. But, Design Thinking can help in deriving patterns and deeper insights from those interactions, go to the root cause of why they asked for something, find the right problem, and hence the right solution to the problem.
Become the Product Leader You’d want to follow