Product Management in Organizations
Product management is an essential function in a company, innovation needs product management, and the people who do it should have entrepreneurial skills and therefore strong personality. I wrote about it in an earlier text published here.
Not having a product management function at all is not an option. But how do you have to organize it so that you can make the most of the PM skills?
Start-Up Product Manager
A start-up focuses on the idea that led to its creation. One of the founders (at least) is usually also a product manager, or rather, fills the role. You could say that a start-up might even have the initial organizational problem of only having a product manager but no (or hardly) other functions, yet. However, even if so, that is changing quickly. As a start-up grows, problems can emerge that are not uncommon in larger organizations. You don’t do innovation on the side. The known problems are: too much preoccupation with routine tasks, lack of time, but also organizational forms that lag behind the growth of the company. As the “CEO of his product”, a product manager is very busy keeping the wheels running and answering all internal and external inquiries. This is all even more true when the product manager is not just the CEO of the product, but the CEO of the entire company. In the latter case, the product manager / CEO has at least the advantage of holding the strings in hand and quickly remedying the problem himself. An employed product manager must first get along with the resources that are made available to him / her. At that stage, the product management is often turned from a one-person show into a product management team.
Product Manager in companies
I am convinced, a product manager is or should be an entrepreneur in the true sense of the word. The generalist job covers the basic Management functions, which are planning, organizing, leading, coordinating and controlling, however, with a focus on the goal of implementation and execution of projects. Therefore, it would be wise to link product management leadership as closely as possible to top management, or to integrate it directly, because that is where the important decisions are made, and where processes, not only projects, can be decided. In practice, you will find other reporting lines of product management persons or departments with more disadvantages than advantages: If product management reports to sales, or to development, or is part of a marketing department — which then typically focuses on communication — the department’s goal and its culture may have a bigger influence on the outcome of the work than the corporate goal. In such a suboptimal organization, the product manager is assigned hundreds of tasks and is often driven by others rather than being in the driver’s seat himself.
I see some publications about PM´s complaining, the PM being the CEO of the product is a myth. I disagree with this, in fact, it seems to me one of these organizational misalignments causing the effect that PM´s are not in the position they should be.
That’s one of the differences between the product owner role and the product manager role. A product owner is typically working closely with the development team, and the main goal is to translate the product vision into a language that developers can work with, plus, keeping release dates and focus. A product manager leads the business. Certainly, in the mega-sized tech companies, not all product managers are reporting directly to the group-CEO, simply because it wouldn’t be managable, however, the organization must somehow bring the complexity of their offering into sub-organizations, and for those at least I would expect to have the Product Management in a leading role.
Business Result counts, not individual achievements
Those who are for or against a project do not necessarily do so in the interests of the company, but first of all for that part of the work for which their own salary, and especially bonuses, are paid. For example, a logistics manager who gets his bonus for low storage quantities is not a friend of a differentiated portfolio of product variants, because it drives up his warehouse. Some sales employees would like to have a portfolio of any size to be able to satisfy even the most unusual customer requests. In the ideal case, the different efforts complement each other to a company-optimal compromise, as long as there is someone who knows the processes and controls their dynamics. It is a typical management experience, the goal is finding the right actions for the company, and not to make everybody happy in the organization. That is another reason, not to put product management under the direction of one of the lines. Rather put the product- and line managers at least on an equal footing, so that they can help shape corporate goals on an equal footing and on the basis of market knowledge.
Promote a vision
Vision creates innovation. Legitimate doubts and legitimate belief in a project play a major role in the decision-making process. Nothing is easier than talking innovation to death — because doubts and concerns are easier to spread than refute. Especially in very large organisations, the more you move from the early phase of a project idea to its implementation, the more people must be convinced. Maintaining the vision can then be a lot of work, under certain circumstances even colleagues work against it (although their motivation for doing this can be very different). For this reason, too, it is helpful if the product management has as short a line as possible to the upper management level, so that the idea has a chance and keeps it, even if it is exposed to internal resistance. In any case, good, especially proactive, stakeholder management is a part of the realization of the idea that should not be underestimated. Systematic, formally organized reviews are often an effective means of obtaining feedback from a larger group of interested stakeholders and bring them onboard.
Allow space and time for creativity
How one is most likely to come up with ideas for new products? Of course, there are marketing methods and tools, widely described. However, the space for creativity that you should allow yourself should not be underestimated. In very few cases are you creative after a long day at work full of duties and repetitive work, full of meetings and conferences. You can’t set the clock either, in the sense of “Tuesdays from 4pm to 5pm is my creative hour”. Someone would be gifted if, under such circumstances, ground-breaking results were achieved through occasional reflection in off-peak times. Those who have a better grip on their time management have a clear advantage; they are more likely to give the brainstorming high-quality time, because that is what counts. In general, creative work requires phases in which thoughts are allowed to fly freely, which must be given space and time, and an exchange with a peer group. If you institutionalize it, you organize workshops that take place outside of regular operations, for example outside the office building. Something useful can come out of workshops, it depends a lot on how well it is moderated and who takes part in it. If one doesn’t have wings yet, one can’t fly there, in short, the workshop must first pick up the participants from where they are before aiming for a result. A distance from everyday life should be created in order to clear one’s head. Next create a creative atmosphere and only then can you try to approach the result. When the wings have grown, you end up with a variety of useful ideas, and ideally amongst those one really good one at least. You shouldn’t overestimate that, even in a 2–3-day workshop the world won’t necessarily be reinvented. But the beginning has been made, and that is what matters. The following examination of the theses shows whether they are valid. This is the hard work that must follow the creative phase, it could be continued market research or technical feasibility studies, or both.
Ambition as a culture for success
The organized generation of ideas does not necessarily have to be a workshop, in principle, the possible settings are to be optimized as individually as the people who are supposed to work on them. First of all, you need the best people that desire to grow the business. To develop ambitions for more success, to set higher goals, that is the gold that should be mined. And that in turn is — on the one hand — part of the talent that people bring with them, but also the talent of the organization to attract and keep excellent people, and finally, to live it. In their own way, the special talents are also very often strong individualists who do not fit into schemes. How you deal with them as an organization is strongly influenced by the corporate culture. Is team spirit more important than team discipline, or vice versa? How much risk do you allow, are people allowed to make mistakes? Do you value short-term success more than long-term strategy? Can you also hear the quieter tones or is only right who screams the loudest? Are processes that are strictly followed more important than results?
This cultural debate is one of the most exciting, because the culture of a company develops and changes only slowly, it is one of the most difficult management tasks to initiate a necessary cultural change early enough, because it takes patience, culture does not change in one night.
