Focus on profit
Not ROI hurdle rate
P&L is key
A Little Background
As someone who used to work for a company that employed ROI hurdle rates to justify products and projects, it’s important — if you’re a product manager, do your best to change that culture.
And if you can’t… when you’re working on your P&L projections for next year, don’t solely focus on meeting a specific number just to secure your funding and get your plans approved.
That mentality leads to plans that have the right numbers — but don’t, ultimately, add up to anything worthwhile.
The numbers are important but so are strategic fit to the company and market fit, among other factors. You need to produce the entire package, not just nice projections.
And remember: Even cultures that justify activity solely based on some random ROI hurdle will eventually look at who actually came to market and what they achieved. Do you really want to be the poster child for financial mediocrity?
How About You?
What’s your experience been like — how do you integrate profit & loss responsibilities into your workflow? What approaches work for you? Which didn’t?