Product Leadership

Sample questions

Two questions from this practice test, in the same style as the certification exam. Answer before opening the explanation.

1. Question 1

   A legal software company closes the year with 40 million in recurring revenue across three lines: Contracts, with 26 million and 8 per cent growth; Billing, with 10 million and 45 per cent growth; and Compliance, with 4 million and 3 per cent growth. Product capacity is distributed in the same proportion as revenue. The board approves the thesis that the company will win in billing automation over the next three years. Which move turns the thesis into a product decision?

   1. Keep the three lines in the plan and prioritise Billing within each quarter
   2. Freeze new capabilities in Compliance and move that capacity to Billing
   3. Raise the growth target for Billing and preserve the current capacity allocation
   4. Open a manager position for Billing and revisit the allocation next semester
   Show answer and explanation

   Correct answer: B. Freeze new capabilities in Compliance and move that capacity to Billing

   A strategic thesis only exists when something stops being done. Since capacity follows revenue, Compliance takes 10 per cent of the team and grows 3 per cent a year, while Billing takes 25 per cent and grows 45 per cent. Moving the Compliance capacity takes Billing from 25 to 35 per cent, a relative increase of 40 per cent, and it is the only option that actually changes how effort is distributed. Prioritising within the quarter is attractive because it sounds conciliatory and preserves every commitment, but priority without subtraction dissolves in the first week someone asks for something urgent in another line. Raising the target without moving capacity hands the problem to whoever executes: the arithmetic is unchanged, only the pressure grows. Opening a position is a symbolic gesture with effect months away, and postponing the allocation is the most common way of not deciding. Whoever leads a portfolio learns to read allocation as the only honest statement of strategy.

2. Question 2

   A competitor launches an electronic signature module built into its product. The following quarter, the company loses 6 of 52 deals and the module appears as a stated reason in 2 of them. The thesis approved by the board is to win through depth in billing, not through breadth of catalogue. The commercial committee asks for the module to be added to next quarter’s plan. What does the Head of Product do?

   1. Add the module to next quarter’s plan to close the catalogue gap that was raised
   2. Commission a broad competitive study before taking a recommendation to the committee
   3. Refuse the addition and set the review trigger at 2 deals out of 52
   4. Accept a reduced version of the module to serve the committee with less capacity
   Show answer and explanation

   Correct answer: C. Refuse the addition and set the review trigger at 2 deals out of 52

   A competitor move is information, not instruction. The number available says the module showed up in 2 of 52 opportunities, under 4 per cent, and nothing indicates it displaces the thesis of where the company wins. The mature answer refuses with the number on the table and states at what point the refusal would be revisited, which turns a no into a verifiable commitment. Adding the module is attractive because it removes the immediate discomfort of the sales team and because catalogue parity looks like an objective debt, but every parity granted consumes the capacity that sustains the promised depth. Commissioning a broad study sounds prudent and is usually postponement dressed as rigour: the necessary evidence already exists. The reduced version is the most expensive of the four, because it spends capacity without delivering the feature the committee asked for and creates permanent maintenance of something that is not strategy. What separates leadership from execution here is accepting the political cost of saying no with a number and a date.