Driving Commercial Success in Product Management: Insights from Gold Hue

In today's rapidly evolving tech landscape, product managers are facing increasing pressure to demonstrate the business value and ROI of their work. Gone are the days of simply focusing on shipping features - now PMs need to understand how their efforts directly impact revenue, retention, and other key business metrics.

To explore this shift towards more commercially-minded product leadership, I spoke with Tara Goldman and McKenzie Hughes, co-founders of Gold Hue. Their company helps product leaders "shine" by defining, measuring and optimizing the ROI of product and engineering efforts.

The New Age of Product Management

According to Tara and McKenzie, we've entered a "new age of product" where the demands on product teams have fundamentally changed:

"We were all in tech at the point in probably 2014-2016 - it was like the high time, tons of VC money, zero interest rates, all the great things. Everybody was building stuff, breaking it at the same time, innovating like crazy," McKenzie explained. "The times, they have changed. We've sort of entered this new age of product where...the demands are essentially: What is product and engineering doing? They're very expensive teams - how are they making impact? How are they showing ROI?"

Tara added that in the past, product teams operated in more of a "vacuum," focused on craft and prioritization frameworks without truly understanding the commercial side of the business. Now there's increasing pressure to tie product work directly to revenue goals and business outcomes.

Why Product Teams Struggle with Commercial Thinking

So why do many product managers and teams struggle to adopt this more commercially-minded approach? A few key reasons emerged:

Incentives and Goals Drive Behavior

"At the end of the day, when you are incentivized towards a goal, your behavior will align to that goal," Tara explained. If product teams are primarily measured on delivery and output metrics, there's little motivation to understand the broader business context.

Lack of Business Acumen in PM Training

McKenzie noted that most product management training and resources focus heavily on craft and frameworks, with little emphasis on business and financial acumen until much later in one's career.

Organizational Silos

Many companies still operate in functional silos, making it difficult for product teams to gain visibility into sales, finance, and other commercial aspects of the business.

Fear of Failure

In the current economic climate, there's often fear and anxiety trickling down from leadership. This can make teams risk-averse and more likely to focus on "safe" output metrics rather than taking bigger swings.

Becoming a More Commercial Product Leader

So how can product managers and leaders start to bridge this gap and become more commercially-minded? Tara and McKenzie shared several strategies:

Understand What Matters Most to the Business

"You need to go into the organization and sort of understand what matters the most to that company," Tara advised. "What are their core KPIs that the business needs to drive?"

This means looking beyond product-specific metrics to understand the key business outcomes the company is focused on - whether that's growth, retention, efficiency, or something else.

Tie Product Work to Business Metrics

Once you understand the core business metrics, work to connect your product efforts directly to those outcomes. McKenzie gave the example of tying platform improvements to sales win rates:

"My partner is a pre-sales engineer. All day she's filling out RFPs from enterprise-level customers of like, you know, what is your uptime? What does your security look like? All these very platform-specific things. And I'm like, if you do not have these things, then you are not closing that deal."

Focus on a Small Set of Impactful Metrics

Rather than trying to measure everything, focus on a small set of metrics that tie clearly to business outcomes. "Pick these metrics, we're going to review them every week, and we're going to have a 30-60-90 day period where we monitor," McKenzie recommended. "If these metrics are not good, change them. But just get started and see if it backs the lagging indicators of retention and revenue."

Think in Terms of ROI and Payback Period

When proposing new initiatives, frame them in terms of ROI and payback period. "It's not just the $5 million idea, but when is the payback?" Tara noted. "How much time is it going to take us to get there? When do we actually break even? When do we make money?"

Build Cross-Functional Relationships

Make an effort to build relationships across the organization, especially with teams like sales, finance, and customer success. "Go talk to someone on your FP&A team in your finance organization...and just ask questions," Tara suggested. "Ask how do we make money? What are our biggest costs? What do we care about?"

Bring in Cross-Functional Perspectives

For product leaders, consider bringing in speakers from other parts of the organization to share their perspective with the product team. This can help build broader business understanding across the entire product org.

Develop Financial Intelligence

Tara recommended seeking out resources to build your financial acumen, whether that's through books, courses, or simply talking to finance team members. Understanding core business financials is crucial for product leaders.

Look Beyond Product Management Content

McKenzie advised expanding your learning beyond just product management content: "Try to listen to podcasts that have nothing to do with product management...Listen to sales leaders, CSOs, all that kind of stuff."

Overcoming Challenges in Commercial Product Leadership

While adopting a more commercial mindset is crucial, it does come with some challenges:

Balancing Short-Term and Long-Term Thinking

There can be tension between short-term revenue goals and longer-term product investments. It's important to find ways to stage-gate larger initiatives and prove value incrementally.

Quantifying Indirect Impact

Not everything that's valuable is easily measurable. Product leaders need to find ways to articulate the value of things like improved user experience or technical debt reduction.

Overcoming Organizational Inertia

Shifting to a more commercially-minded product org often requires broader organizational and cultural changes. This can be challenging, especially in larger or more established companies.

Building Trust and Psychological Safety

To truly empower teams to think commercially and take smart risks, organizations need to build trust and psychological safety. This is especially crucial in the current economic climate.

The Future of Commercial Product Leadership

Looking ahead, the need for commercially-minded product leadership is only likely to increase. As AI and other technologies make it easier to ship product quickly, the differentiator will increasingly be in making smart, business-aligned product decisions.

By developing their commercial acumen and tying their work directly to business outcomes, product leaders can position themselves and their teams for greater impact and success. It's no longer enough to just build great products - today's product leaders need to be true drivers of business value.

For those looking to level up their commercial product leadership skills, Tara and McKenzie recommend seeking out diverse perspectives, building cross-functional relationships, and focusing on developing core business and financial acumen. With the right mindset and skills, product leaders can drive tremendous value for their organizations in this new age of product management.

Article created from: https://www.youtube.com/watch?v=MDj6TYQz5HQ