There’s a reason behind every piece of work, or at least there should be. The rule of thumb is to not start anything unless you understand why you’re doing it in the first place.

The work of a product manager is largely about prioritization, with the aim of supporting the success of the company.

A common challenge when being presented with an idea is having no clear answer to why it should be done/implemented. On the surface, it may seem obvious, but the true justification and benefits are in the mind of the person proposing it.

Who hasn't experienced or at least witnessed an idea being explained that’s crystal clear to one person and confusing to another? This is usually caused by a lack of emphasis on the importance of verified data.

The task of a product manager or product team is to understand, justify, and communicate effectively why something is or isn’t being done.

When a company strives to serve its customers better and meet their business requirements in an agile manner, growth is possible. The term "business agility" aims to emphasize the need for agility throughout the value chain, from identifying market and customer needs to product development, sales, production capability, and quality.

Where do product requirements come from?

Requirements can come from many sources:

  • The product strategy
  • Gaps in the market
  • Customers
  • Technical obligations
  • Internal stakeholders
  • Regulatory needs

Product management teams are tasked with prioritizing requirements so that goals are achieved in both the short and long term. Product management must answer why some tasks make it into development while others are moved to the backlog or abandoned entirely.

Understanding your value proposition

Start by writing your value proposition. Your value proposition can be created once you:

  • Can provide a brief description of the need/requirement
  • Know the solution to the problem and its benefits
  • Know who will benefit from it
  • Have established how your solution differs from competitors

At this stage, it will become clear that product ideas and requirements are not commensurable. The needs of internal stakeholders will not necessarily bring tangible benefits to customers.

Creating a value proposition helps others understand why an idea should be implemented.

Calculating business value

Make a simple calculation; establish the benefit that will arise and divide it by the estimated cost it will take to implement. A simple value calculator is a hundred times more effective than a mere opinion. Some opinions and intuitions do turn out to be right, but you can’t predict which ones.

Needs are not measurable, but calculations like the one described above can help you prioritize requirements and provide justifications for why an idea should be implemented.

In practice, such calculations support decisions and force you to think about things in a systematic way. The final prioritization is created iteratively, with sales, product management, and product development being considered. 

If the need is larger, such as a new product or other significant investment, a more thorough business case and calculation should be prepared. A change in the business model may also call for a more robust approach.

Creating business value

Most of us find it difficult to start, let alone accomplish anything, if we don't understand why it needs doing. Few people want to use their ability and energy just to keep warm.

We all want to learn how to be useful, create value, and contribute to success. It’s the duty of the company's management to stop projects that do not serve the success of the business as a whole.

If you aren’t prepared to justify what you’re asking for, don’t expect support from others, and be prepared to give a reason because you will most certainly be asked for one.

Evoking emotions with “why”

It’s important to note that asking someone for a reason behind an idea they’re proposing will evoke an emotion, be it negative or positive.

Some may feel threatened and take it as you questioning their competence or authority. Others will appreciate it because it shows their ideas are being taken seriously; they’ll likely see it as an opportunity to dive deeper into the subject and prove themselves.

In either scenario, asking why makes people reflect on their actions. It encourages introspective and critical thinking, which is beneficial for personal and professional growth.

It all goes back to generating value

Knowing the "why" and communicating it effectively makes it easier for developers and stakeholders to implement change.

In our consulting work, we use the expression "squeeze the why," which means everyone has the right and duty to know the reason behind requests and goals. This is key to the success of any organization.

Sometimes it’s about business requirements, such as improving efficiency, impact, or employee well-being, most often, it’s about customer or market needs. Whatever the inspiration, the "why" should always go back to value generation.

In keeping with the theme of this blog post, find out the what, why, and how of product creation.

Published: October 27, 2023

Software developmentAgileProduct management