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When someone calls the product manager CEO of the product, what does that mean? And is it a helpful…
When someone calls the product manager CEO of the product, what does that mean? And is it a helpful analogy? The product manager as CEO of the product sounds powerful and strategic. It brings to mind strong leadership skills, influence and accountability, all key traits of successful product managers.
But when people hear product manager as CEO of the product, many also jump to the conclusion that the product manager is then the product decision-maker, that this person will oversee all the areas of the product, including engineering, sales, marketing, support, etc. And that interpretation can cause confusion in at least three areas.
A major point of dissimilarity between CEOs and product managers is the difference between their authority and influence. CEOs have the ultimate authority. Based on their position, control of resources and ability to reward and punish, they are the company’s final decision-makers. Product managers have little authority. They normally have no budget, no direct reports and few resources. They must rely on persuasion and inspiration to make a positive impact. CEOs manage down; product managers influence across and up. Any power or influence product managers exert is based on their product, market or business expertise.
The second misconception is that “CEO of the product” describes the reality of the product management function at most companies today. Product management covers a broad range of responsibilities and varies dramatically from company to company. While product managers may be CEOs of their product in some places, it isn’t the norm.
The product manager role covers a variety of important duties, including representing the customer in new product development projects, providing expertise in creating sales materials and supporting selling efforts. The visibility and urgency of tactical requests from engineering, marketing communications and sales—plus a lack of priority and support from senior management for inbound research and strategic thinking—can place severe constraints on the product manager’s ability to act as CEO.
In fact, this year’s annual product management and marketing survey from Pragmatic Marketing showed that product managers are typically individual contributors who spend 72 percent of their time on tactical activities. This profile doesn’t reflect the powerful, strategic, decision-making product manager who is CEO of their product.
The third misconception is the exacting focus on the product. The phrase “of the product” places too much emphasis on the product itself, which plays into a narrow view of product management that many people share: that it’s only about the product.
This product centricity is often reinforced by those who enter product management from lateral functions, like engineering and customer support. Their strength—and a major reason they were chosen for the product management role—is their understanding of the technology, functionality and operation of the product. Their weaknesses tend to be on the business side and include market and customer research, marketing communication, finance and business strategy.
So, should we do away with this analogy? No, we should be clear about what it means.
Product managers who are told to act like CEOs should understand that they actually need to think like CEOs. Product managers should focus on identifying and addressing challenges and influencing results, rather than acting as if they have ultimate authority.
CEOs gather information and ideas from many different sources to help them define the path to follow to accomplish the purpose of the business. Similarly, product managers gather information from external sources, functional areas, and customers and process those inputs to make choices and influence activity.
And much like CEOs who have a vision for where their business is going and how to get there, product managers need to have a vision for where their products are going and how to get there. Their objective is to find the best way to describe market requirements in order to create and position a product that will attract the right customers.
Product managers who think like CEOs will become agents of change, establishing a perspective on how to achieve future success. The path forward is not always obvious, so effective product managers will need to find creative ways to change course and accomplish important objectives even as challenges come along.
Product managers must be experts in both market needs and product capability. They must understand evolving technology and how to leverage it in their products. But this expertise is not enough. Just like winning CEOs, successful product managers have the ability to do and say things that motivate others to make changes in the way work gets done. They can influence decisions that change which activity and investments have the highest priority.
Being a powerful communicator is a prerequisite to becoming an effective change agent. Just like CEOs who use personality power to influence change, successful product managers must also find ways to be heard. Effective change agents focus on strategic priorities and emphasize the coordinated tactical efforts across resources that address worthwhile business opportunities that provide the right products to the right customers.
In many companies, the product management role focuses on technical and product concerns that must be addressed during product development. Being an expert on products and technologies, and helping designers define features and performance specifications, is important to the product’s success. But product managers who think like CEOs are also concerned with business issues and how to make and adapt whole product solutions that have the best payback over the full lifecycle.
This business thinking involves positioning the brand in chosen markets, deciding how to manage the product portfolio and designing business plans that make the best use of resources in the value chain. This business orientation improves new-product analysis and planning and efficient matching of design and selling efforts with customer requirements, all of which will increase results and ensure we address problems that are worth solving.
To make this work, the responsibilities and areas of accountability assigned to product managers need to be clear and consistent. Product managers need to think like a CEO to find ways to work on the right products and focus on customers while meeting stakeholder expectations.
Roger Hicks is the principal at Roger Hicks Consulting where he creates winning product strategies and market-driven business models. He has led new business initiatives and product launches involving instrumentation, displays and computing for Tektronix, Planar Systems and Intel. Roger has also managed projects that feature market-changing innovations used by industries ranging from food processing to solar power to LED lighting and more. He co-founded the Be Market Oriented collaborative and has served on the boards of The Indus Entrepreneurs, Product Development and Management Association and Smart Grid Northwest. Contact Roger at firstname.lastname@example.org.
Miki Tokola is a 30-year veteran of high-tech product management and marketing, managing products with revenues totaling over $500 billion and establishing marketing/product management organizations at five companies. His products have been used by people ranging from lumbermen and oyster graders to a Nobel Laureate in physics. A co-founder of ProductCamp Portland, Miki also serves on the board of directors. In addition, he is former president of the Oregon Chapter of the Product Development and Management Association. Contact Miki at email@example.com.