Product should be leading the business. Is it?

Oct 6

Background

There are many books, articles, and talks available that speak to the importance of a having a strong Product Management ("Product") function and how that can benefit customers and ultimately the business. A lot of the content that is available focuses on the product development process itself, starting from customer contact and idea through to prototyping, planning, building and launch. These are all super critical elements of the job, however I think this leaves out a large part of the role Product can play to keep a company focused and executing effectively.

In my experience a surprising number of people have either not seen a well functioning product organization or have had little to no exposure to one at all. A lot of companies are not operating at “best practice level,” though many understand what it’s supposed to look like. They bring in instructors, send people to seminars, try occasional transformations. The reality is that unless it’s embraced culturally from the CEO down, there are are extremely strong headwinds to organically building a strong Product organization at a company that has operated differently for most of its existence.

More than just improving the way your company innovates and builds products, having a strong Product team will make your entire business run better. This is the part I think a lot of people miss, simply because they've never seen it. They see symptoms, some of which they attribute to Product, others they think are due to problems with other functions, the market, competition, etc. Ultimately this efficiency comes from the ability of a strong product function to define a customer-centric strategy and keep activities aligned across the business to support it.

When I say a "strong Product" function, I mean really three things:

A strong, visible, senior leader for the group with a seat at the table for the most critical decisions in the company
A team of highly skilled product managers, with well-defined responsibilities, who do their job well and earn the respect of their colleagues
A company culture that embraces the leadership role of Product, and trusts the team to lead the way

All three of these things are necessary to have a chance at operating near the "best practice" state that is described in the literature. I've found most companies might have 1 to 1.5 of these checked off.

Rather than only point to best practice and ideal state, where very few companies operate, I want to take a slightly different angle in this article and point to some of the symptoms that arise from having a weak Product function, especially the ones that are less obvious. By highlighting some of the symptoms and their causes, I think you can make a more effective case for why a strong Product function can benefit any business.

Product Management Needs to be an Independent Function

Even among companies where there is a Product function, it still too often seen as “part of Engineering,” and in many cases reports up to a single combined product and engineering executive.

As close as the two functions need to be, being a product manager does not qualify you to be a developer, and the reverse is also true. Product and engineering are different disciplines with different required skill sets. For many valid reasons, it’s not always possible to have fully separate orgs all the way to the top and it's very common to se a C-Suite person that owns both Product and Engineering. These leaders are almost always career engineers, with little to no no formal experience in the Product function. This structure can work, but it is 100% dependent on the person in that role - some rare individuals can do the appropriate mode switching, most default to what they know and favor the engineering mindset which can lead to various failure modes.

The problem of course is that these two functions are equally important, they should be focused on different things, and there is a healthy tension that comes from having them separate. Product owns the “for whom,” “what,” and “why,” and Engineering owns the “how” and “when” When all five of those questions roll up to one person it’s hard for even the most talented execs to remain objective, especially when under pressure to deliver. Apple has continued to split functions over time to ensure experts are always at the top of the most critical areas, even going as far as to split advanced technical fields like A.I. and machine learning out from traditional software engineering. This is an extreme example, but they have found value in having strong functions that are excellent at what they do and the tension and conversation from having them separate all the way to the CEO. Said another way, keeping important functions separate and visible has forced the quality bar to be higher, and in turn they've released better products.

Regardless of the org structure your company chooses, the most important things are that A) a senior product executive exists, at the most one level below the CEO’s direct reports, and B) This person has the access, visibility, and authority to perform the role as described below.

Product Executives Drive Alignment and Reinforce Vision and Company Strategy

Most companies are not lacking for ideas, or potential directions to take the company and the product. Perhaps one of the most important jobs of senior product executives (VP / SVP / CPO) is facilitating the development of a product vision and strategy that is aligned with (and ideally drives) business objectives. The role does not have to be played by the senior product leader, however if one exists it is typically their responsibility.

Having the plan is sadly usually the easy part, sticking with it is the challenge. Even with extremely bright, well intentioned, appropriately-goaled executive teams, there is always an element of entropy that creeps in. A simple model to keep in mind is that "energy and attention do not divide evenly." A company with 100 people working on product X will not deliver products Y and Z, each half the size of X, at the same speed with 50 people on each. Keeping multiple balls in the air comes with overhead, certainly for all management staff. It's fine to have multiple product lines, but you should be trying as hard as possible to keep the product set as small as possible and aligning all activity in the company behind these few things.

Staying focused is probably the biggest challenge for companies of any size. At the places I’ve worked, my clients, and companies I was exposed to via due diligence and partnerships, all suffered from some level of “too much going on that is not core to the business.” The bigger the company, the more employees they have, the longer they’ve been in business, the more all of this tends to compound. It’s common that leaders see the mismatch but avoid the pain of fixing it; usually that means telling people to stop working on something they’ve been on for awhile and go do something else which is never a fun conversation. Perhaps there is still some small stream of revenue coming in that appears larger than the invisible tax it levies on the organization. Either way, there are many “Zombie products” lurking about that are effectively dead in the market but they can't be killed internally. More importantly, the energy and attention of the employees are spread way too thinly across too many things, making the core products suffer unnecessarily.

The senior product executive is like a super magnet - things are either aligned with the strategy and held close or strongly repelled. They also act as a bit of a filter to new ideas that always come up and vet them for strategic fit, opportunity costs to evaluate and pursue, etc. This is not to say a senior product exec is the “VP of No” or that it’s impossible to be nimble and react to new opportunities. The key is in how ideas move from being a suggestion to reality. A senior product leader is constantly trying to keep all of the activities of the business aligned with the vision and strategy, and more importantly actively pursues shutting down work that is not in service of these plans.

Product Teams Reinforce Strategy Throughout the Company

Everyone knows the game of telephone and what happens as a message is passed along and reinterpreted at each step. Communication of a company strategy is no different, and it’s normal for teams and individuals to see certain activities as being “aligned” with the strategy when perhaps they are not. The most common struggle is chasing opportunistic revenue in favor of sticking to strategy with a payoff over the longer term.

If the product team is working well, then every product manager within the company is acting like a clone of the senior product executive, driving alignment of activities at the working level to the company strategy. This is accomplished through a mix of personality, empathy, influence and sometimes just calling things out that don’t look right. Good PMs are usually a little defensive of maintaining focus, clarity, and the resources they’ve got to work with. Part of the Product Manager role is to act as the "white blood cells" of your organization fighting off divergent activities. As they work with all of the other functions of the business they are constantly on the lookout for things that are not in support of their product and the company strategy and driving to a quick decision about whether or not to continue the activity.

Big Disclaimer

I’ve been careful to note at each step that all of these potential benefits hinge on having a strong product team in place, and an organization that is accepting of that role. Not all product managers are awesome, having more of them is not an automatic solution to your problems. However if there is weak or divergent customer understanding among employees, multiple divergent activities, and a sense that you are “stalling out” versus the competition you should do a strong evaluation of the current state of your Product organization.

Need Help Moving Product Into a Leadership Position?

If you’re struggling with product being out of sync with the rest of the business or keeping everyone focused on a cohesive product strategy please feel free to contact me or learn more about how I may be able to help your product team.