4. The Primary Responsibility of Product Leadership

One of the most important points I want to emphasize when discussing product leadership is understanding the primary responsibility of a product leader. It’s essential to be transparent about what truly matters in this role, especially for those who are already product leaders or aspire to become one.

Misconceptions About Leadership Responsibilities

Many people might assume that the primary responsibility of a product leader is defining vision and strategy, developing product managers, or managing expectations. While these tasks are certainly part of the role, they are not the main focus.

The Real Focus: Return on Investment (ROI)

The primary responsibility of a product leader is ensuring that the company sees a return on its investment (ROI) in the product development process. As a product leader, you need to understand that everything you do should ultimately contribute to generating value for the company.

The Cost of Product Development

Product development is expensive. A product development team typically consists of engineers, designers, product managers, data analysts, and others—roles that are generally well-compensated. In addition to salaries, there are costs related to tools, infrastructure, and other resources necessary to develop the product.

The CEO, C-level executives, founders, board members, and investors expect that this significant investment will, at some point, generate a return. As a product leader, your primary role is to ensure that the company is getting a solid ROI from its investment in product development.

Example: Lopes Labs

Let’s look at my experience at Lopes, a publicly traded company since 2005 or 2006. In 2019, Lopes conducted a follow-on to raise funds for its digital transformation—a move to compete with emerging proptech companies like Loft and QuintoAndar. The company raised 150 million reais for this initiative, and I joined Lopes in August 2020 to lead this transformation.

As Lopes Labs, the company’s digital unit, began to grow, it became increasingly expensive. The monthly costs for the Labs team—focused on building new portals, apps, CRMs, and other digital products—were rising steadily. By mid-2020, the investment had stabilized, but Lopes’ leadership began asking, “Where is the return on this investment?”

The leadership started holding Lopes Labs accountable for delivering features (like a new portal or app), but this led to a feature factory mentality, where success was measured by the output of features, not the impact on the business.

Shifting the Focus to Business Outcomes

When I joined Lopes, I proposed a shift in mindset. Instead of being measured by the number of features delivered, the Labs team should be held accountable for the business outcomes generated. We created a budget for 2021 with the following goals:

1. Stabilize costs: Ensure that the monthly costs for Lopes Labs remained consistent.
2. Measure revenue: Begin tracking the revenue generated by Lopes Labs to ensure it was contributing to the company’s bottom line.
3. Achieve positive ROI: Ensure that the revenue generated by Lopes Labs exceeded the costs, leading to a positive ROI.

This new approach shifted the focus away from feature delivery to business impact. By the end of 2021, we had achieved 30% more revenue than originally projected, and our costs were slightly above budget by about 3-3.5%. Overall, our results exceeded the projected budget by 73%. This proved that Lopes Labs was delivering value to the business, not just building features for the sake of it.

Tools for Achieving ROI

While vision and strategy, developing product managers, and managing expectations are important aspects of product leadership, they are ultimately tools that help you, as a product leader, deliver ROI. The vision and strategy ensure that your efforts are aligned with business goals, the development of product managers ensures that your team is capable of executing effectively, and managing expectations helps align stakeholders and avoid distractions.

However, all of these efforts should serve the greater goal of delivering a return on the company’s investment in product development.

Conclusion

The primary responsibility of a product leader is to ensure that the company's investment in product development—an expensive endeavor—yields a positive return. Vision and strategy, team development, and expectation management are crucial elements, but they all serve the ultimate purpose of generating value for the business. By keeping the focus on ROI, product leaders can avoid the trap of becoming a "feature factory" and instead drive meaningful business outcomes.