More than a decade of grousing about product management

Purposeful Opacity

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Building a secret direct channel creates data inconsistencies, limiting the ability to measure and understand product performance.

Hypothetical scenario today.

Assume that you are a business that sells via a long-established network of partners (or representatives). For 20+ years, this network has been successful, growing your business until it is thriving, stable, and showing the growth of a mature business.

A leader in the organization sees that we are “giving away” a lot of margin to these agents/reps/partners, and want the business to capture more of the dollars.

In a normal world, this happens by building an overt, explicit direct channel, and then either firing, or limiting your indirect channel to transition to direct.

But that is not entirely what has happened.

Instead of building an overt direct channel, in the open, instead they decided to carve out a “special” business, ostensibly in response to requests by customers to deal directly with the company, and thus a small, but growing team was formed to address this demand.

All normal at this point. Sure your indirect channel is peeved, having owned the field for more than two decades but they understand. barely

The Challenge

This direct team starts small, but the intent was always to grow it to take over the indirect business.

But think of it thusly:

  • You need sales people. Feet on the street, who can smile and dial, and book orders.
  • You need demand generation. Sure, you did some high level work, and fed MDF (market development funds) to your channel, but the channel did the nitty gritty advertising, promotion, and lead generation.
  • You need systems to track sales, deliveries, and the financials. You have to deal with taxes, and other messy bits of business that you channel handled for their 35% cut of the sales price

There are more, but you need to be able to sell, to find people who might want to buy, and financial systems to track revenue flows and expenses to calculate your profitability.

It is the last of these three that is getting under the Dude’s skin.

He is a product manager in an org that is in the throes of this transition (not his decision), and he is trying to piece together the financials of this “business” as part of a business review. And it is not pretty.

For the last 15 years, at least, there have been ERPs and BI (Business Intelligence) tools that allow an individual to slice and dice the data, to build pivot tables, to build custom views, and to glean valuable insight.

For this to work, it requires some up front planning of your data schemas, building a set of data that can be mined for context, insight, and to drive decision making.

But, the Dude is finding a half assed pile of three data sources, that are not internally consistent, and lacking a lot of context. The Dude can get an aggregate of the total amount booked. Or the number of units delivered (whole orders). Or the total number of individual line items shipped. But he can’t reconcile these, because he gets different answers from the different data sources.

What is the problem?

The problem is that the Dude needs to know:

  • How many individual units have been delivered in each fiscal quarter by product line, by product within the product line, and individual instances sold of each product, to each region, and in what month of the quarter (timing of delivery is key for his metrics).
  • Like McDonalds used to have on their signs, how many seats of a product have been sold (and consumed, as a sale is not necessarily a consumption – long story), and who they were sold to.

The sit-rep

The Dude has three sets of data. They aren’t self consistent. They don’t match. The metrics he needs are impossible to get with what he has access to.

He asks the “owners” of the data, and he gets multiple answers. Furthermore, he gets redirected to someone else who can help, who directs the Dude to someone else, who …  and finally, the Dude is referred back to the original person. Full circle, and still no answers.

In short, he can’t get to the granularity required to fully understand the performance of the product(s), that drive his decisions on what we need to do next, and this opacity is making him want to smash things.

The Dude needs to objectively measure the performance of the components of this portfolio.


What the Dude suspects

In the BD (before Dude) time, this portfolio was built in secret. They wanted to build a sub-business to compete with the established indirect channel, to prove that they could do it better, cheaper, drive more revenue, and more profit. They were never able to convince leadership to turn off  or to rein in the indirect channel, so this internal skunkworks just kept going, gaining ground (but not a lot) on the biggest indirect partners, pissing the channel off.

However, as it was a barely sanctioned effort, and done somewhat clandestinely, they built their own financial reporting tools, their own data warehouse, their own data schemas, and even their own transaction processing system.

And these special built systems are about as good as you would expect from a hobbyist working on a side gig, or a physicist writing commercial code (n.b. – AWFUL) and the data the Dude needs is not directly available.

So, the Dude is expected to understand the business, to plan for future evolution of the product, to pick what projects should get prioritized, and to plan for success, all with no easily accessible data.

Data, the lubricant of business, is just not here.

What to do…

The Dude is managing. He is calling in favors. He is highlighting to leadership that this is unacceptable, and that a coming ISO audit this summer will be a painful event.

He will do what all product managers manage, to use incomplete data, to model a fractured ecosystem, with imperfect assumptions, and take a measured guess.

Will it be right? Who knows.

Written by

A crusty veteran from the product management trenches. Plenty of salty language, references to cannabis, and a connoisseur of White Russian cocktails

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Written by pmdude