Product Management – what investors and others ought to know about this business-critical role in tech companies
The role of Product Management has always been important for growth in successful tech companies, where the Product Managers themselves act as informal leaders across all other functions.
Our, perhaps a bit harsh experience, is that in a rapidly changing market based on tech and innovations you cannot prosper without a well-tuned Product Management doing the dirty work inside. The company without it will fade away.
What is Product Management – What to consider?
Generally, the Product Management function is expected to
- deliver profitable products over long periods of time,
- handle strategic and tactical issues relating to the product,
- be responsible for embedding product success across all silos
and thereby securing the profitability (and growth) of the whole company.
This is also why the primary area where you find a strong Product Management culture is in tech and other fast changing competitive markets.
What is critical in getting it right from the start?
The most critical aspect of the Product Management function, setting it apart from the other functions, is that it stretches across these other functions.
The need to orchestrate and in any way possible influence the entire company is part of the identity of the Product Management function.
This is what successful Product-Led companies have done, creating a strong driving force setting the entire company up for success.
There are a few consequences that should be known:
- To be in charge of the product in reality means a responsibility for how the whole company works, very similar to how the CEO influences the entire company.
- The overall purpose is to ensure a profitable product over very long periods of time, requiring a deep sense of strategy thinking paired with pragmatism in the tactical arena.
- Product Managers MUST understand both “Business” and “Tech” and have a fundamental understanding of what the other functions do, and how they do it.
The above short list is a tall order. Some people might argue that the CEO has this role. However, in our experience the overall responsibility of the CEO means that it is impossible to combine the operational aspects and day-to-day tasks of Product Management with being a CEO. There’s just not time for it.
Why Product Management matters – especially for established tech companies
What is labelled “tech” is by nature the innovations and rapid changes in technology. This creates enormous opportunities for companies exploiting these technologies. Being first and leading the race means money.
The flipside is that tech grows old quickly, market conditions change in an increasing rate. And R&D efforts take time, there is always significant and focused work required over time to become a successful company in the tech area. And, perhaps even more important, to stay successful.
Any tech company must therefore adjust, adapt and change trajectory. Without ending up in endless and energy-consuming course corrections.
The changes require strategic insights and ability to “push” all parts (“silos”) of the company in the right direction in time. Like a herding dog!
Product Management is the necessary iron fist in a velvet glove, working tirelessly inside the company.
Product Management function – there is no blueprint for organizing it, but…
In most cases it is recommended to have the PM function as its own function. Product Management must be able to balance all other functions and their opinions into a great and workable (good) compromise. This means that a too tight coupling to any of the other functions will set them up for worse performance.
This is the reason why the initial phases of a startup company work fine, the founders divide the roles between them, the decision-making is swift and take the whole picture into consideration. Problems often arise with scaling-up and delegating responsibilities. The ability to balance all parts of the company easily gets lost. Unless there is a strong Product Management function that can whip everyone into shape… the herding dog.
Product Management function is business critical in tech companies
Having the right people doing the right job matters. Even more so with Product Management.
The ratio of “Product Managers” to total headcount is tiny, it is obvious that finding the right personality and skills for it is essential. One or a few people must make a big impact. There must be a near-perfect mix in the person.
Does the company you work with have the combined “herding dog/CEO” leading them to product success and profitability? Contact us if you want to explore further.