When & How to Listen to your Board of Directors on Product Plans

Board-of-directors-HD_LWJointly blogged by Laurent Gharda & Wayne Greene

Laurent is the CEO and founder of LinMin

Much is discussed in the Product Manager blog space around listening to your customers and driving your product direction to the most valuable features and capabilities for your customers. Sounds like eating cheesy nachos and a ballpark frank smothered with the fixings at Fenway Park or AT&T Park; no one will argue with this. Perhaps a colleague with a few years of experience outside of college will comment that we need to look at the needs and wants of existing customers, but what about the customers we don’t have yet—the prospects? In fact we have seen many great products turn into mediocre feature-bloated behemoths that everyone in the existing customer base had loved. But what happens when your GM asks why your new customer logo counts are dropping each quarter, and you have your answer: the market has moved on and you are still harvesting usage from your existing customers. Start looking for a job, you will soon be let go.

This Does Happen in the Real World

Here is a topic that does not get much discussion and is indeed a sensitive one. Let’s say you do when you get into the office early one day at 7:30AM with your Starbucks in hand and the energy to attack a new area of your to do list. What do you do when your CEO or another member of the Board of Directors walks into your office, puts his arm around your shoulder, sits down, and says that they have a great idea for a new feature, capability, module, or a new adjacent product. Being that seasoned PM who is a great listener and who can think on his feet, you begin to realize (and perhaps have the deer in the headlights look) that you were just placed into a highly charged, political and difficult to control position of the PM who is being given advice he can’t easily file under low-priority long-term features.

When You Can (or Can’t) File This Away for Review in The Next Century

Yes, sometimes you really can “add it to the list” for later, and sometimes you’d better not… Let’s discuss both the When and How of listening to the big shots from mahogany row. This blog is really more than just the art of listening, but more about managing the whole experience of perhaps one of the most challenging experiences you will have as a PM.

A Primer on Boards of Directors, From the PM’s POV

As a good Product Manager, you know your audience (customers, management, sales, analysts, pundits etc.). Now you need to add your Board of Directors to your constituency. As with any other member of your audience, board members come in all shapes and sizes, and understanding their motivations (and skill sets) will enable you as Product Manager to grok what board-presented product plans/ideas to “manage out” (filter out what you can, elegantly), and what to “own” (hone in on what you agree you must do, and take a leadership role).

Key players include:

  • CEO: your CEO is your most trusted board member. The CEO knows the board dynamics and personalities, and protects company resources (you!) from wild goose chases. The CEO also will reinforce when a product idea is to be pursued or its initiator placated. And while the CEO signs your paycheck, his/her fellow board members employ the CEO, so your CEO knows the lay of the land: the company’s and the CEO’s successes are tightly meshed, so trust your CEO!
  • Founder/co-founder and friends thereof board members: these are generally “friendlies” who typically know the market and your company extremely well. The odds are if they bring up an idea, it’s usually worthy of serious consideration and typical analysis (TAM, SWAT, ROI, time to revenue, etc.) and they deserve a formal PM review and a summary presented by the CEO (or by you) at the next board meeting.
  • Investor board members (as in VCs or strategic partners/investors). Here’s where it can get a little crazy, depending on the stage of your company (pre-product, early revenue, market contender, market leader, etc.) and its number of financing rounds. Good ideas and strong egos interact, sometimes too often!
    • In early stages of a company’s external funding, it’s not unusual for one or two VCs to own the majority of the board seats, often with more than one board member from the same investor/VC. We have seen boards where one VC tries to outshine another (market knowledge, who knows whom, past successful exits, etc.) for bragging rights at their next weekly partner meeting. The CEO must skillfully and respectfully manage these dynamics, but must also listen to product suggestions carefully, as these board members are skilled, intelligent and dedicated individuals. Still, at the end of the day, it comes down to plowing forward, nose to the grindstone, getting products out the door and customer wins, so new product suggestions will typically be squelched in order to “stay the course, shortest path to revenue”. Luckily these peacock contests, when they happen, occur in the first few board meetings, then things settle down.
    • As successive investment rounds occur, the board composition will shift, with newer investors getting additional seats, and earlier board members fading away as investment representation shifts. The newcomers will have done extensive research before investing in your later-stage company, but they will not benefit from the institutional knowledge and war stories from having attended numerous early board meetings. There may be an opportunity for some one-on-one time and exposure between PM and new board members, at the CEO’s discretion.

How to Listen to your Board of Directors on Product Plans

While this blog is titled “When and How to Listen to your Board of Directors on Product Plans”, let’s face it, the “when” is “always”: you can’t not listen! It’s the “how” that will guide your determination as to how to classify, rank and/or dispose of suggested product plans coming from the board.

There is no “one size fits all” answer as to “when to hold and when to fold” a board’s product suggestions, but since you know your product, market, teams and constraints the best, we thought we’d enumerate some scenarios from our own backgrounds that you might want to keep your ears open for…

When You’d Better Listen to your Board’s Product Ideas

  • The CEO just had a board meeting and had to fall on his sword because of revenue shortfall
  • Your product is being publicly criticized (social media, a key customer at a conference, etc.)
  • Your product has slipped and Engineering wants to de-feature to get anything out the door, and the board got wind of this
  • You know the sales guys are unhappy and may be talking to someone on the board
  • An internal battle over some issue at the company just got board level visibility (go to market, exit plan, tech stack, or a new push from a new competitor)
  • A customer advisory board occurred and a prominent customer called out the product line for some issue, whether it be a missing feature or a horrible customer experience during upgrade

How to Gently Dispose of Your Board’s Product Ideas

Sometimes, a new product idea that sounded great in a board meeting just won’t stand on its own two legs the next day, and as Product Manager, after due consideration and perhaps consultation with colleagues, you need to bury it, without making anyone lose face.

In such cases, data and time are on your side:

  • Find out from the CEO what actually happened and was said in the board meeting
  • Who initiated the discussion?
  • In the CEO’s opinion, is this really something PM should pursue or gently bury?
  • Ask the CEOs permission to meet with the idea initiator on the board to “learn more” (always remember that many investors spend hours each day reading about companies, trends and markets, and meet countless companies seeking capital investment, so they may well know a lot you might not)
  • Prepare a straw-man proposal with potential revenue, timelines, development costs, and especially lost opportunity costs (where else these potentially diverted precious resources could have been applied), and get the buy-in from your CEO, so it can be presented for interment at the next board meeting
  • Bounce the idea off of your top 5 trusted customer contacts
  • Bring it up at your Highly Performing Product Leadership Team Meeting
  • And just maybe, if the data stacks up, it could be a good idea after all!

And then there is the time the board member enlists your help in product management to help influence and sway the direction of the technology stack in the company. It could be the choice of the tech stack of the UI framework. It could be your back-end being JAVA or .NET based. It could be whether your product should support on-premise deployment or only SaaS based deployment. This scenario is one that could significantly help your strategy and product direction. When a board member (who has the technical chops in your estimation to help drive an outcome in a philosophical or religious battle within the company) arrives in your office and wants to help resolve an ongoing strategy disconnect, you definitely take him up. You might have a prominent engineering or product leader who is “not getting on board” or who has a logical but dubious explanation why that option is the more expensive and slower option. In these situations, you have no choice but to broker the conversation and lend your expertise to the story. Even if the board member and you can’t sway the conversation, it is useful dialogue with the team and a good way to gain an ally on the board.

Parting Shot

We know product managers who are terrified of board member interactions. We also have PM buddies who love these interactions and are attracted to the rarefied air of these interactions. Whatever camp you are in, these interactions definitely help you build your chops as a product manager. We once had a manager who described some people who sat in their living rooms and watched the war on the TV, and others who had actually been to war and returned strong because of it. You definitely want to be in the latter category, and having these board of director interactions will definitely help you earn your chops as an experienced PM.

Stay tuned for more joint blogs from the dynamic duo of Wayne and Laurent….

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