Product Managers hear constantly these days that they need to build "business acumen." For many, that phrase brings to mind endless spreadsheets and complex financial reports, and their first reaction is usually a “no thanks, not for me.”

In my experience as a product leader now running a company, commercial acumen isn't about analysing every single line on a financial statement - it's about being hyper aware of your business outcomes. It’s about understanding the patterns, the core mechanics of how your business makes money.

At its heart, it's answering a few core questions:

1. How does value get created and exchanged in your business?
What are the largest drivers of revenue in the company? If it’s a marketplace, the business may make money at the point of matching two sides successfully, for an ecommerce business the focus may be on volume and average size of transactions, or for a usage based business the value may lie in the continuous use and retention of paid subscriptions. If it’s a more complex business like a bank or large enterprise, it’s worth understanding what product lines contribute to the largest share of revenue.

2. Who is the ideal customer in your business?
Think about both who gets the most value out of your product, and who is therefore the most willing to pay for your service or product. The pricing model of the business should ideally reflect this of course and not be in conflict with it like in the old days where customers were locked into year long licences for example.

3. What are the major cost drivers in the business?
Consider the costs to acquire customers and operate the business. One of the most useful parts to understand are the different channels to acquire customers, and the cost of each channel. Some business might also be running high operational costs to support customers or develop products, for example if hardware or very specialised technology is involved. Again it’s not about a line by line spreadsheet analysis, but being clear about the key drivers in the business here.

I personally learnt a ton about the mechanics of a business by publishing my book The Insights Driven Product Manager. I first saw how different distribution channels, like Amazon versus Gumroad, had a massive impact on my final revenue. I also had to make choices like the quality of paper that in turn would impact the cost to print and the profit I make on each book sale. The next step to figure out was advertising: at one point I doubled my monthly ad spend on Amazon to promote the book, only to realise that sales didn’t double. I ended up scaling down the ads to a manageable amount again - back to where I made more money from sales than I was spending on ads.

This wasn't necessarily rocket science and certainly not about complex financial modelling - it was about understanding the fundamental mechanics of a business. While I knew a lot of these things in principle, there was nothing better than testing this even on a small scale and learning by playing with these different levers of the business. That experience taught me that every choice, from the sales channel to the pricing model, has a direct measurable impact on the health of your business, and I found those principles highly transferable to the day to day in my roles leading digital products.

From Product Manager to Business Owner Mindset

To truly contribute to a company's financial success, you have to shift your mindset outside just the product roadmap. Sometimes the business goals can be achieved by improving your features and your platform, but sometimes the answer might also lie in collaborating more closely with sales or marketing to make it happen. The point is to try think like a business owner, not just a Product Manager, to make better product decisions. This mindset has been central to every role I've held, and it helped me immensely with creating greater impact and collaborating better within companies.

One of the most powerful tools I personally use to align teams is a simple metrics one pager workshop. By getting everyone on the same page about our business goals and how we'll measure success in each contributing department, we ensure that every action, from marketing campaigns to new features, directly supports our collective business health. It’s an effective way to cut through “us versus them” thinking and ensure everyone understands their contribution to the bottom line. If you need help with this, I’ve run workshops on this with my own teams and dozens of external companies and am always happy to chat.

Practical Steps to Build Your Business Acumen

So, how can you start building business acumen as a Product Manager? The good news: you don't need a finance degree. Here is what I always recommend:

• Get Crystal Clear on Your Business: Start by asking the "dumb questions." Talk to your CEO or other leaders about what they report on. Read your company's business updates and look for the key headlines that reveal how the company is performing. The goal isn't to analyse every data point, but to get a sense of the big picture, the major trends and the strategic direction.

• Do a Side Project: This is perhaps the most practical and powerful lesson of all. Take on a project outside of work, whether it's selling a product online, running a small service, or creating a course. You'll be forced to learn about channels, costs, and profit and loss statements in a way no spreadsheet ever could. I personally found it hugely valuable as it’s a hands on way to understand how all the different parts of a business fit together.

• Lose the Mental Blocks: Avoid saying "I'm not good with numbers." You just lack confidence and practise, and that is different. Again, the goal is not to become an absolute spreadsheet wizard either. Instead, challenge yourself to use numbers in conversations and presentations: the more you say them out loud, the more comfortable you'll become. Your expertise isn't tied to your comfort with math, it’s tied to your ability to communicate business value.

Commercial Skills - The Future of Product Management?

Let’s get to the hot topic question: should a Product Manager own the financials?

I like to go back to the origins of Product Management in more traditional businesses like Procter & Gamble where the role of a Product Manager first appeared. The back then called “brand men” (where there any brand women too?) essentially were general managers of their product, owning everything from packaging to product development to distribution. The benefit was clear ownership of different product lines, and that's a model we should aspire to in my opinion.

Of course, this ownership is only possible if the organisational structure supports it. You can't be responsible for something you have no control over. But my short answer to whether Product Managers should own the financials is yes, strong product leaders should have business skills and act as the owner of the product end to end, if the company supports this structure. To me, that's the very essence of being a product leader.

But what if things go wrong? A very smart mentor once said to me: “You're not proving yourself, you're proving that the business has legs.” I think about this sentence a lot. Throughout my years of leading large product teams I’ve learnt that one of the worst things someone can say is "business outcomes are out of my remit." Acknowledging that you care about the wider impact, taking accountability for the things that could influence the business, even if the end results may vary, will always take your career further in my experience.

Want to align product & business metrics?

We run online workshops for product teams at Fortune 500 companies and startups to help product leaders align their metrics and speak the business language. Or, we offer self learning resources, including the Metrics One Pager, if that’s more your thing:
📈 #1 Amazon New Release book The Insights Driven Product Manager
📈 Our self paced video course Master Product &Business Metrics