The ROI of 280 Group Solutions

for Product Professionals

“Despite product managers’ central roles in software organizations, they are often
neglected from a talent-management perspective.” – McKinsey & Company, The Product
Product
Management Talent
Management Talent Dilemma
Dilemma

At 280 Group, we’ve seen this problem not just in the software industry, but across many
different industries, over many years. If you’re talking with us, you likely already know you
need to improve the effectiveness of your Product Management (PM) team.

In this paper, we outline the various benefits your company can realize from improving your
PM function into two related categories: talent management and company performance.

By engaging with 280 Group to improve the success and career growth of your Product
Managers, you’ll realize multiple benefits in maximizing this precious resource.

Training improves employee performance and ROI

The role of PM encompasses a broad range of responsibilities and requires at least 15

different hard and soft skills. According to McKinsey, “Product managers must easily
change gears and ruthlessly prioritize to support a vast number and range of activities.”

Establishing clear roles and responsibilities, a consistent product lifecycle process (PLC), and
providing skills training helps Product Managers be more effective in executing the wide
variety of activities they must conduct to build successful products. According to
Accenture’s Return on Learning
Learning study, training can yield an impressive 353% ROI through
skills improvement.

What Our Clients Experience

A Big Four consulting firm engaged with 280 Group to help transition from working
with their clients using a project-driven approach to building products to serve
multiple clients. They realized an average increase in PM skills of 33% across all 15
skill dimensions, with performance improvements as high as 65%. For the four key
skill areas where the client wanted to improve most, they realized improvements of
over 40% as a result of our customized training.

© 2021 280 Group LLC. 1

When you have talented employees who lack the skills and knowledge they need to be
successful, training and team optimization leads to more effective outcomes, faster than
hiring.

Consider these benefits:

• You already know the quality of your employees, versus the unknown quality of a
new hire.

• Existing employees already know your business, market, and culture – no ramp time
to learn “how to get things done around here.”

• Existing employees can apply training benefits at work.

• Re-skilling provides a more flexible and resilient workforce. According to a recent

Deloitte executives identified "the ability of their people to adapt, re-skill,
survey by Deloitte,
and assume new roles" as the top item to navigate future disruptions.

• Re-skilling can provide an ROI of 690% vs. losing a Sr. Product Manager and having to
recruit, re-hire, and train them. A study by the Center for American
American Progress
Progress
estimates that the average cost for losing a single employee is 21% of the employee’s
annual salary. According to Indeed as of July, 2021 the average base salary of a Sr.
Product Manager in the U.S. is $131,523. Compare this to the cost of $3,495 to train
that employee with 280 Group’s comprehensive Optimal Product Management
course.

© 2021 280 Group LLC. 2

Companies that have implemented re-skilling efforts are seeing results. According to the
Beyond Hiring:
report “Beyond Hiring: How Companies
Companies Are
Are Re-Skilling
Re-SkillingtotoAddress
AddressTalent
TalentGaps
Gaps,” by
McKinsey, nearly 7 in ten respondents reported that the business impact from their re-
skilling programs has been greater than or equal to the investment in them. What’s more,
48% say the programs are already enhancing bottom-line growth.

Calculate Your ROI

You can calculate your ROI based on the Center for American Progress estimates:

ROI = (Savings from re-skilling – Cost of Res-killing) / Cost of Re-skilling

ROI = (21% X Employee Salary) – (Cost of Re-skilling/employee*) / (Cost of Re-

skilling/employee*)

* Replace with your per employee cost from 280 Group solution

Re-skilling reduces turnover

When a company demonstrates a commitment to improving employees’ skills, employees

see that the company is invested in their future. They become more engaged and
committed to the company, which reduces turnover.

According to McKinsey, only 35% of Product Managers surveyed understand what it would
take to advance in their organizations, and roughly the same number feel sufficiently
coached and mentored. Skills training and team optimization can be particularly effective
for PM organizations looking to increase retention.

Re-skilling enhances company reputation

Having a re-skilling program helps attract top talent. A Gallup

Gallup poll revealed nearly 60% of
millennials said career development opportunities were a deciding factor in applying for
a job.

In McKinsey’s survey, only around 20% of respondents said that their companies have
highly effective programs to identify and retain the best talent.

Committing to providing skills training and team optimization will make your team
stand out.

© 2021 280 Group LLC. 3

Improving the skills, processes and techniques of your PM team boosts company
performance.

Improving efficiency and effectiveness

By establishing a consistent set of product lifecycle practices and techniques, you will build
a team that works the same way and “speaks the same language” across different products
or even divisions. This allows for more efficient and faster activities, whether it be in
researching customer needs, writing requirements, or approving business cases and
roadmaps.

These efficiencies also extend to the teams that work with PM. According to McKinsey
McKinsey,
“Amid the growing importance of data in decision making, an increased customer and
design focus, and the evolution of software development methodologies, the role of the
product manager has evolved to influence every aspect of making a product successful.”

For example, Sales always knows how PM operates regardless of the product, what they
need to understand from customers, how to support prospect engagements, and how their
requests will be considered for future releases. Multiply this across all of a PM’s stakeholders
-- Legal, Finance, Marketing, Customer Support and so on -- and training your product
professionals has an efficiency multiplier across your entire organization.

What Our Clients Experience

One of our clients in the insurance industry worked with 280 Group to develop a
consistent Product Lifecycle Process and trained over 300 of their product
professionals in these best practices. As part of this effort, they created a lightweight
scoping effort to be used between their Product Managers and their IT department.
Once this process was deployed, they experienced a 60% reduction in estimation
time, because of increased efficiency and data-driven approaches to PM and
development team interactions.

Accelerating time-to-market

A consistent set of product lifecycle practices and techniques not only accelerates internal
processes, it leads to an overall faster time-to-market. This allows your product team to
respond more rapidly to changes in market needs or the competitive landscape. It also
enables you to deliver more benefits to your customers more frequently.

© 2021 280 Group LLC. 4

 What Our Clients Experience

One of our clients in the financial services and technology sector was able to
dramatically increase their time-to-market. Before engaging with 280 Group, they
had not released a new product in two years. After revamping their PM and product
delivery processes, they released eight new products over the next two years.

Increasing fidelity of product decisions and reduces waste

According to Pendo’s Feature Adoption

Adoption Report
Report, “80% of features in the average software
product are rarely or never used. Publicly-traded cloud software companies collectively
invested up to $29.5 billion developing these features, dollars that could have been spent on
higher value features and unrealized customer value.”

By empowering your Product Managers with proper customer research tools to build
sound business cases, you can reduce waste and make better product decisions -- faster.

What Our Clients Experience

Our insurance industry client implemented two changes to realize efficiencies: they
created a simple but effective business case template that required real customer
data, and a gate review process that rapidly identified real opportunities to pursue
and opportunities that didn’t make sense. As a result, more product concepts “fail”
at the business case review, which reduces the cost of late-stage product failures.

Calculate Your ROI

Suppose your company was able to reduce the number of failed features it
launches by 30% in a year. How much development expense could you save?

Annual Development costs * 80% = failed feature development costs

Savings by reducing this 30%: Annual Development costs * 80% * 30% = annual
development cost savings.

© 2021 280 Group LLC. 5

Better products increase profitability

Building and launching products that better address customer needs, and making them
available more often increases revenue and profitability.

Respondents to our own Challenges

Challenges in inProduct
ProductManagement
Management survey believe they could
achieve an average increase in profitability of over 34% by optimizing their PM function.

Calculate Your ROI

Select a product or product line where it’s clear that the current PM function could
improve with skills and process improvements.

R = Current Revenue

Annual Profit Increase (A) = R * 34%

ROI = (A – ($3495 * PM Team size)) / ($3495 * PM Team size)

Better products lower costs of support

An often-overlooked benefit to better products is the savings that can be realized in

reduced customer support tickets.

Using Customer Discovery and Product Operations techniques taught in our Digital
Product Management course, one company was able to reduce support calls by
approximately 25% on their top 10 most-asked questions. They provided in-app guides and
training videos triggered by usage data when a customer was performing certain tasks that
had known pain points.

Calculate Your ROI

Calculate how much your company could save in support costs in one year with
PM training that leads to products that reduce support calls by 25%.

SCS (Support Cost Savings) = 25% * # of Support Calls/year * Cost/Support Call

ROI = (SCS – ($3495 * PM Team size)) / ($3495 * PM Team size)

© 2021 280 Group LLC. 6