It’s a scenario that would make any product manager sweat: A Skype call with senior executives to review the pricing model for your brand-new product.
In advance of this meeting, I met with dozens of target prospects and several relevant analysts to validate the pricing model. I captured and synthesized competitive pricing information. Then I debated the pros and cons of the proposed pricing model with my supervisor and the senior director of pricing and packaging. Next, we created a presentation designed to provide the executives with enough information to understand the product and its model. Our goal was to get the pricing approved so we could proceed to the next stage of our launch process.
During the actual presentation, various executive voices chimed in over Skype with questions. Overall, they appeared satisfied with my answers.
Until we got to one slide, which made a somewhat bold statement. It underlined who we were not considering as a target buyer for this product.
And one executive’s reaction to that bold slide suddenly launched us away from a pricing conversation and into a go-to-market one. Worse yet, people on the call who could have addressed some of those concerns started piling on questions of their own instead.
The call ended not only with pricing questions to address but also much broader issues to consider. All because a key executive doubted we did enough validation for the concept and target market — let alone the pricing.
Transparency as a strength
Transparency can truly benefit an organization. Breaking down information silos speeds up decision-making, increases the quality of those decisions, and helps hold relevant parties accountable for the decisions they’ve made.
When it comes to employee happiness, various surveys show that management transparency is actually the most important factor. And that desire for transparency factors into a company’s profitability as well. Over 70% of consumers indicate they would be willing to pay more for a product that offers complete transparency.
From a product management perspective, transparency can strengthen your relationship with customers. This is especially true if you share not just your plans with them, but also the benefits of upcoming features and functions. Transparency can also improve your relationships with internal stakeholders by allowing different customer-facing coworkers to bring their insights into the product management process.
Transparency as a weakness
However, transparency does require an organizational mind shift — and changing minds isn’t easy. Moreover, the investment in an ongoing dialogue between management and staff can be difficult to maintain (as recent events at Google have demonstrated).
And transparency can have unintended consequences — which I experienced firsthand in my pricing committee presentation.
In being crystal clear about our product’s intended market, I thought I was being helpful. Instead, I created more problems. I ended up learning three valuable lessons from this experience:
This particular scenario was a pricing conversation. Everything in the presentation should have focused on getting to an agreement on the business model and pricing. While providing background, I introduced what was ultimately extraneous information. I mean, does anyone really need to know who isn’t a prospect? By doing that, I accidentally opened the door to a broader line of questioning which derailed the entire conversation.
Align with key stakeholders beforehand
After doing the background work to validate and invalidate different assumptions, I sought alignment with my supervisor and the senior director responsible for overall pricing and packaging. However, I hadn’t “walked the halls of Congress” to do a pre-read of my key points with the stakeholders in that meeting. If I had, my presentation would likely have been stronger. Also, people other than myself could have answered questions rather than adding new ones.
Establish common ground using numbers
In my presentation, I explicitly addressed what we were doing, why it mattered, and our pricing proposal. But in providing background on the product, I both over-communicated and under-communicated.
In my over-communication, I distracted with minutia that ended up being controversial. At the same time, I under-communicated the amount of background work I’d completed. As a result, some of the executives felt we had more work to do, when in fact, we’d already done it.
To help address that concern, I created a follow-up slide that specifically identified each of those line items and the associated number of conversations, tests, etc. PMs on our team now use that slide template to help quickly create shared understanding.
PM transparency with executives
After that initial Skype call, I felt pretty glum. Still, it was pretty clear what I had to do. I addressed the executives’ concerns by providing quantitative evidence of the process we’d gone through. Together with my supervisor, we walked the halls of Congress ahead of the next meeting to drive alignment on the go-to-market plan. A few weeks later than originally planned, we got the pricing approved and moved onto the next stage.
Transparency with executives is a good product management strategy. However, getting the balance right requires thoughtful execution.