When we review strategic plans at Redfin, Glenn reminds us that he wants to behave more like an allocator of capital. This means he wants to evaluate different ways Redfin can spend its money, the potential return for those investments, and then decide what will return the most.
That may seem like a cold way to decide what to do and not do. In truth, we consider much more than just return on capital invested when making strategic decisions. We’ll pass on investing in something that doesn’t make a customer’s buying or selling experience meaningfully better, or an agent’s work experience better. But thinking about return on capital is a good balance to avoid getting too attracted to interesting ideas that have a low chance of paying off.
Time is your scarce resource
As a product manager, you inevitably have more to do than there is time in which to do it. You have user research to conduct, designs to review, specs to write, metrics to evaluate, and roadmaps to put together. You have asks from other teams to manage. You have new people to ramp up. You have random issues in production that your team needs guidance on.
For this problem, I like to think of myself not as an allocator of capital, but as an allocator of another scarce resource: time.
Do your due diligence
When faced with a decision about where to spend your time, think about what return you’ll get for that time investment. Ask yourself the following questions:
- Cost: How much time will this take? Is this a high-confidence estimate or could it take much more or less time depending on unknown things?
- Value: How valuable is the thing that gets returned for putting the time in? Why?
- Expertise: Will you be the most effective if you spend time on this? Or, is there someone better suited that can do it faster and/or better?
- Opportunity: What else could you be doing, if you weren’t doing this? Are those things going to return something that’s more valuable?
Saying no is necessary
Investors want to put their money in more things than they are able. They have to say no to some investment options in order to say yes to others.
As an allocator of time, you’ll need to do the same. Saying no to doing something means you get to say yes to something else and give it your full focus. Saying no also may mean you need to find someone else to do it, or get agreement that it can wait.
Make your investments public
Make a list of the main things you’re driving, and where you draw the line below which items remain unfunded.
If your manager or a colleague wants you to invest in something new, share with them your list of where your time is currently allocated, and ask the above questions: what’s the new item’s cost and return, who’s best for it, and is it worth more than current investments?
Having a focused, high-return list of investments of your time is the way you’ll make the most impact as a product manager. As a bonus, it should also help you stay balanced and avoid overwork.