Product and Finance leaders,
How can/do finance leaders contribute to the product team's success?
Short background: I’m leading the finance department at #Roundforest, a leading B2C product-focused start-up in the eCommerce space. We are on a mission to simplify online shopping. We adopted the “Empowered” product approach coined by Marty Cagan. What does it mean? It means that we define our teams to truly own the product.
Being part of the leadership team at a product-focused company, I am constantly challenged to answer this question. This is what I have learned in the last couple of years:
- Connect to the product vision and strategy. It will be impossible to support the product team's success without understanding their vision and how they plan to achieve it. Live the product, think like a customer, provide feedback, ask questions and understand how it works. Why is it important? I believe that everyone in the company should understand the bigger picture and what they are fighting for in order to achieve their goals and enjoy their work, putting that aside, it will help you execute the following elements more successfully.
- Don’t ask how much it costs, ask what is the expected ROI. Help with building the business case, challenge it and ask them to demonstrate the business value. Having a sharp eye for the economic upside of a new project or product in its early stages is crucial.
- Change your mindset, from reflexive, cause-oriented thinking to active, response-oriented thinking. Take a problem-solver approach. Help them think about, map and analyze the different alternatives (resources wise) to determine which one will have the most impact in achieving their objectives. For example: Build Vs Buy: if the product team doesn’t have the required resources internally, offer the “Buy” option. Ask the following questions:
- Is it a core competency of the company/engineering team? If not, lean toward Buying.
- What is Build Vs Buy cost? If the differences are not significant, lean toward Buying.
- What is the risk of using external resources? If the risk is low, lean toward buying.
- It’s all about the data. Be data-driven. Help with defining the KPIs, make sure they are measurable and track them along the way to evaluate the success and impact of the product/project.
To summarize, be a collaborative partner. Live the product, challenge, ask questions, share your thoughts, help analyze the financials/unit economics, support the execution and help overcome resource limitations. Help them achieve their goals.