What's your process for figuring out what metrics to hold product management accountable for?

This is a hard one as I am sure there are a ton of layers to unpack here. Whenever there is a question around metrics, I would first look to the customer and understand what customer pain points your product area is solving for. Then see how those needs and your business goals align, and how your specific area can help solve for that. If it is a matter of stakeholder management that is a different story, but engineering, product and design should really have shared KPIs.

Usually I would begin with understanding

1. What are the key customer pain points that I am trying to solve for your customer? Those are my metrics in 9 out of 10 cases
2. Why is my product team funded? What problems am I solving for the business? 

Once I have the initial list, just like all things product management I PRIORITIZE. What matters the most vs what is not as important. 

Now for every item in the list its also crucial to think through what are the counter metrics. A crude example would be, I want to have more paying customers but a counter metric will be revenue from these paying customers. Lets say, I discount my product enough that sky rockets the number of paying customers, a good check and balance would be the total revenue we are getting from these customers. 

Here is a rough process I would follow but it really varies a lot depending upon each business:

• Understand Company Objectives and Goals
• Have a clear Product Vision and Strategy that aligns with these goals/objectives
• Create higher level OKR's that can map to KPI's
• Determine the top KPI's the company is interested in driving/moving. Examples are: Business Performance KPIs: Customer counts, Customer / user acquisition, Retention Rate, Churn Rate, Revenue etc.
• Make a prioritized list of these KPI's you can measure. Example Revenue would map to MRR and so on
• Pick top 1-2 KPI's that you will meaningfully impact
• Ensure they are measurable in the given timeframe
• The roadmaps that PM's own should be aligned to these OKR's and KPI's
• Report on progress regularly

A good framework I use follows the product adoption lifecyle curve:

• At Introduction (think MVP) the main objective is establishing product-market fit.
• At Growth you need to shift objectives to focus on maximize growth & share. If you're not profitable at this stage, focus on getting to profitability.
• At Maturity, maximize profit and aim to extend the lifetime of the product through diffentiation or adjacent products/segments.
• At Decline your focus is to remain profitable and transition cusotmers to what is next.

Once we choose a team that defines the path to the success of the team - its important to identofy metrics by groups of Financial KPIs, Product KPIs and Customer Satisfaction KPIs. Each product has its own set or group of metrics that are relevant. The idea is to choose metrics to help improve the Product , help drive decisions.

If you want to create metrics to hold a product team accountable, there are a few things to keep in mind up front:

• If the goal is accountability, the person accountable should feel ownership - so the process should be collaborative with whoever the accountable party will be.

• You can't be accountable for things outside of your control. Any metrics you land on should be within the control (or influence) of the PM/team.

• There are some things that you should keep at the forefront of your mind when choosing your metrics:

  • Time scale - Is this measurable in a timeframe that allows for meaningful iteration?

  • Measurability - Do we have the tools and data to track this reliably?

  • Signal vs noise - Can we isolate the impact of product changes from other variables?

  • Leading vs lagging indicators - Do we have early signals that predict long-term success?

To figure out the right metrics, I follow this process:

1. Start with a "backwards driver" exercise: company objectives and work backward to identify the key contributing user behaviors that drive those outcomes

   • Company goal is $100M ARR → Need 10K paying customers → Requires 30% conversion from free tier → Focus on activation metrics like "% of new users who complete core workflow within 7 days"

2. Map the product team's sphere of influence - what contributing user behaviors can they directly impact through product changes?

   • Team can impact user activation and retention through onboarding improvements, but not initial acquisition costs. So "Cost per Lead" wouldn't be appropriate, but "14-day retention rate" would be.

3. Try your best to define a balanced scorecard across three areas:

   • Usage metrics (ex. Weekly active users, Feature adoption rate)

   • Business metrics (ex. Revenue per user, Upgrade rate)

   • Quality metrics (ex. error rate, bug resolution time)

4. Establish clear measurement windows and review cadence that matches your development cycle

   • Daily metrics review for quality issues, weekly for usage patterns, monthly for business impact, quarterly for strategic metrics.

   • If you can, match release cycles - if you ship biweekly, review impact metrics 2-4 weeks after each release.

Ideally, the goal is to have 2-3 core metrics that tell you if the product team is moving the needle on user and business value, while maintaining quality. Keep in mind, you may find after one cycle, that the metrics are too hard to move meaningfully in a short cycle, or that the metric is too confounded by external factors outside of product's control. If so, its time to review the metric and redo the exercise.

See question: “What are good OKRs for product management?” for a general introduction to the topic.

The Product Management responsibilities vary from one company to another, and from market segments to market segments. So my answer will be very biased to my experience in the interactive content tech industry.

I usually require from my teams that they do not take on the role of Product Owners, but instead behave as the ultimate Product Owners. In the agile methodology, the Product Owner role is responsible for describing the tasks to execute in a sprint, ensure the backlog priorities are aligned to the strategic product goals. When the Product Managers are assigned to this role they usually prioritize team execution above strategic planning and market research, resulting in those two activities to be neglected.

However, the Product Manager is accountable for proactively verifying the Product Owners are able to achieve those tasks, and the Product Manager might need to adjust their activities to focus on execution from time to time to help correct the situation when the Product Owners struggle to stay aligned to the organization goals. That’s what I mean by the “behaving as the ultimate Product Owners”.

As such I usually make Product Managers accountable for the wider Product organization OKRs. This doesn’t mean they are responsible for driving the actions or collecting updates, but are accountable: they report on OKRs progress, interpret the state of the progress in the context of the product and the market, and proactively engage with roles responsible for each OKRs when progress falls behind.

See question: “How do you approach setting crisp KPIs and targets for Engine features and linking them to your topline metrics?” for my step by step process for realistic OKRs.