How to be a great product manager during a recession

how to be a great product manager in a recessionWe are in an economic crisis. They happen every so often. In business,  sometimes we call them recessions.

The National Bureau of Economic Research (NBER) Business Cycle Dating Committee, the group entrusted to call the start and end dates of a recession, defines a recession as  “a significant decline in economic activity spread across the economy, lasting more than a few months.”

There have been as many as 47 recessions in the history of the United States. n my career alone, I have witnessed and been professionally involved in five, including the current economic crisis.

  • The Iran/Energy Crisis Recession: (July 1981 – November 1982)
  • The Gulf War Recession: (July 1990 – March 1991)
  • The 9/11 Recession: (March 2001 – November 2001)
  • The Great Recession (December 2007- June 2009)
  • The Great Lockdown (March 2020-?)

On estimate, 20 percent  of your career will be spent in difficult or challenging times. It’s not a question of if, but when. So be prepared.

But how?

Having spent 38 years working and most of it in product management – either as a product manager, leading product management organizations or as a CEO of a company that was ‘the product’– I have some advice for you, dear reader. Just a few quick tips that should serve you well in difficult times from someone who has been in your shoes.

First, remember that in times of economic decline, cash is king. The balance sheet wins over the income statement. It’s about surviving to fight the fight another day. Hold on. Hunker down. Ride it out.

And with this in mind here are important tips for you as a product manager:

It’s about customers, not prospects. It’s a downturn. You need to preserve cash. We are no longer in growth mode, it’s not about competitive differentiation to win new deals; it is about customer retention to keep subscriptions and renewals coming in. Prioritize your roadmap for customers. Not competitors. Not prospects (new customers). You need to deepen the relationships you already have and maintain them. That’s what will keep the lights on. Anything that makes you a continued ‘aspirin’ versus a vitamin in the features roadmap goes to the top of this week’s sprint. Look at the roadmap. Focus on the now. Focus on what keeps your customers renewing.

Tools, tools, tools. OK, you are not buying anything. Nothing new. Period. No money out. However, can you choose a better time than while you are at home to ‘take a peek’? No – this is it. The world WILL come back. Maybe to the ‘new normal’, whatever that might be. But now is the time to prepare yourself. Look at all the product management tools out there. What will allow you to make a product that will give you the edge when you are back in growth mode? Get ready and figure that out now, while you have the time.

M&A. It may sound cruel, but now is the time to take advantage of those that haven’t managed as well as you have.. You are giving yourself a competitive edge, as well as a chance of survival to what will be former competitors or complementary products and their customers.  Often, a competitive company or even a company with a complementary product may not survive a downturn. Such companies may offer you a major tranche of new customers. This is your opportunity to build your offering and/or your customer base at a lower cost. Use your best buy vs. build analysis, and go after those opportunities. You owe it to your product and the company you work for.

Virtual. If your tools, processes and personnel are not effective at functioning in our new virtual normal, now is the time to invest in such tools and processes and any necessary training. Yes, you will find the landscape less satisfying than real, live and in-person communications, but don’t think replacement – think augmentation. Think of many possible situations where you will find the best people to work with outside of your physical location, where tools will help you gain expertise and allow you to work with people who can improve your product and market advantage no matter where they are located or how you interact with them.

Squirrel Patrol. This is a bonus if you are a manager. This may sound cruel but it’s a reality. When I was a young executive during a downturn, my boss, told me it was time to go on “squirrel patrol.” “What’s that?,” I asked. “Well, that’s where we find all the nuts – and let them go.” Don’t kid yourself. Even companies on a stronger footing will use an economic crisis as an excuse to release people. It may be a good time to re-evaluate your team and the people on it. If it’s time to say goodbye to deadwood, do it. Cut costs. Preserve cash. Cruel but reality.

Let me simplify:

  • think cash
  • think customer
  • scenario plan
  • be opportunistic

At the highest level, these are what your company needs from you moving forward as a good product manager during an economic crisis. It’s what every product manager needs to be thinking near term.

 Survive to fight another day. And prepare for that battle now.

 Good luck and be safe.