Today, let discuss best practices.
The best analogy I can attribute to the Product Manager position is that a Product Manager is like a mini-CEO within a company without a lot the administrative responsibility that comes with being CEO. In a start-up or small company, the CEO in fact may be the Product Manager. In a medium size company, the business unit head may be the Product Manager. More than likely Product Managers are reporting to the business unit or division head. As CEO giving up the product management responsibility can be a difficult task for some control-oriented CEOs since this position is at the heart of the success of the company. You might think about it like the head coach of a football team giving up the play calling responsibility. However, to enable growth in a company the role of the Product Manager is critical. This position more than others is critical as the company expands from one product to one product line and then to multiple products and product lines. By definition the Product Manager is responsible for guiding the success defined by revenue and profitability growth of a product. This position can and should be a P+L management position as a subset of the overall P+L of the division or the company. Often this P+L is analyzed as contributed profit to the company or the company assesses some overhead allocation to make the product P+L more realistic. Either way profit and profit growth are key measures of success of the product line. The allocation of overhead makes the product P+L more realistic and it makes a more mature discussion between the Product Manager, Business Unit head and Corporate management.
The Product Manager should have control or access to all the resources necessary to set the product strategy, design the product, fulfill demand, market and sell the product. The organization to create this ability can be a matrix organization or a direct line style depending on the organization philosophy of the company. It also depends on the culture of the company and how things get done. Certain companies will want to centralize manufacturing, R/D or Sales to gain economies of scale. Other companies believe in direct line control of resources. In either case, the Product Manager will lead a cross functional team that brings the skills necessary to develop a successful product and bring it to the marketplace. This team should be responsible for specific decisions on features, releases, forecasting demand, production volumes, pricing, marketing and key customer relationships.
What skills should a Product Manager have? What experiences should they have? First the Product Manager is a manager and should have reasonable management capability and training. However, it is key for the Product Manager to have the ability to understand and conceptualize a product that people will want. One that will have differentiation, value and sustainability. Also, to have experience with the market place to understand the positioning of the product in a way that maximizes the chances of success. In order to do this the person needs a feel and experience for the market and the problem they are trying to solve or the hole they are trying to fill, or the transformation they are trying to create. They need to be passionate about the solution they are proposing and that passion should be infectious across the team. It isn’t to say that gathering data on products and markets isn’t important but that added sixth sense is incredibly important. One of my mentors, Jim Morgan, used to always ask me “Who is your product person?” For some time, I did not fully understand the depth of this question and gave the name of the person who was currently the Product Manager or product marketing manager. It wasn’t until sometime later that I realized he was asking something different. He was asking who is the person that can truly strategize, develop and execute a product roadmap. Understanding that question was a turning point for me. I would say understanding this question is key for every CEO and division manager. Who is your product person? Do you know? Do you know what you are looking for in a product person? Do you have more than one? Product people who can manage a cross functional team are rare, but if you find a person with that talent that is your Product Manager! However, if the Product Managers you have are not a real “product people” then you better have the “product people/person” directly reporting to the Product Manager and they need to have the ear of that Product Manager. Obviously, the Product Manager has a complex management job that has a lot of breadth. But look at the title of this position: It is Product Manager. So, without products you do not need a manager.
Let’s go back to the responsibilities of a Product Manager. Each Product Manager not only has responsibility for the areas defined below but should have defined critical success measures and criteria in each of these categories. Many companies have a Product Life Cycle process that defines the various stages of a product from cradle to grave and the measures of success in each of those stages. Many of those measures are included below. As the product goes through these various stages of life the team may change as the emphasis of the team changes from introduction to milking the end of life of the product. I would emphasize that it is important to keep the R/D or product development members involved in some way throughout the life of the product. Their innate knowledge of the decisions made early on in the life cycle of the process have so much impact even at the later stages of product life. Having said that you can imagine the weekly operations meeting going through each of these focus areas in detail.
- Product Strategy: The fundamentals of the solution the product is providing. The critical understanding of Differentiation, Value and Sustainability. Description of the business model and evolution of the product.
- Product Line Up: Generally, you want to have variations in the product features to allow you to sell up from the base product to the highest featured product.
- Product Pricing and Positioning: Pricing the line up from top to bottom based on the value the market will pay. Software companies do the best job of value pricing since they have no cost basis to work from. Hardware companies could learn a lot from watching pricing and positioning of software companies.
- Product Marketing: How will you reach your target market and describe the product in a way that makes the value proposition more obvious to those customers you are targeting. Effectiveness of creating demand through marketing.
- Production Planning and Fulfillment: What will the build plan be? Balancing inventory vs cost vs customer satisfaction vs obsolescence.
- Product Cost: How to get to the “should cost” of the product? This takes a concerted and coordinated effort between engineering, manufacturing, and procurement. When there is a mismatch between the product cost and the value the market will pay, the Product Manager is in trouble.
- Sales: The cultivation of customer relationships and making the best possible deals for the company.
- After Market/Service: Keeping customers happy and returning is critical for every company. Close contact after the product or service is sold to gauge satisfaction and potentially the sale of upgrades or to deal with returns is a major factor in the long-term success of the product and Product Manager.
The cadence of the Product Management Team will vary through the life cycle as well. Meetings might vary from weekly to daily then back to weekly and bi-weekly. Part of this cadence should be various meetings at various intervals dictated by the stage of the Product Life Cycle. Financial review meetings can happen quarterly. Operations reviews at least monthly if not more often. Progress meetings might be daily for manufacturing and product introduction. The product manager should design this cadence thoughtfully to truly create an execution machine.
In summary, the Product Manager is a unique position within a company. It is where all the elements of creating, designing, making, marketing and selling a product come together. Product Managers create focus and drive to make a specific product a success in the marketplace and thereby creating a successful company.