Software Product Management: If You Can't Define It, You're Doing a Bad Job at It
But the companies that know how to harness the talents of skilled product managers reap big rewards, namely successful products, higher revenues, motivated employees and, last but not least, smiling CEOs.
Is it easy to get your product-management act together? The answer is no, but Steve Johnson can tell us how to do it. Johnson is an instructor at Pragmatic Institute, a product-marketing training company in Scottsdale, Ariz., and also webmaster of productmarketing.com, a Web site housing a compendium of free information for technology product managers.
Since 1993, Johnson's mission has been to preach the product manager's gospel. He does it by running seminars and making presentations to software companies throughout the United States, writing articles and giving interviews.
He was kind enough to take some time out of his frenetic schedule to give us a couple of hours to explain the importance of product managers and how software companies are screwing up by not capitalizing on their value and talents.
So, what is a product manager? What are companies doing wrong? How can they get their product-management act together? Johnson answers these basic questions and many more.
An ill-defined job
During the lean and mean recession, product managers found themselves lost within their organizations' sales and marketing departments. 'Companies didn't have a clear grasp of what the job was,' says Johnson. 'In many companies the job was loosely described as anything it takes to make a product successful.'
'Or, the product manager job was an arm of sales support. As organizations grew, product managers often became demo boys or demo girls,' says Johnson. 'Companies had no idea how to get product management and product marketing on the same page.'
The typical company is accidentally market-driven
Rather than creating a product to solve a problem, they're betting on creating a need. Johnson calls that 'possible, but stupid thinking.' Sharper Image exemplifies that kind of thinking.
'Visit a Sharper Image and you'll find a lot of people standing around looking at all this stuff and saying, 'Wow, isn't that neat,'' says Johnson, 'but nobody is buying anything because no one needs the gadgets. The company makes all of its money around Christmas, when customers are buying gifts for family and friends simply because they're cool-looking, not because they meet a need or solve a problem.'
Product management is in limbo, according to Johnson. 'We seem to be in the middle of development, marketing communications and sales channels. The lines between these departments are very unclear for most companies.
'In some companies product management works very closely with or is part of product development. Unfortunately, the closer we get to development, the further we get from the customer and sales channels. We start getting into designing product, doing usability studies, managing beta programs and getting into the technical side of the product, to the detriment of our exposure to the sales cycle.'
More confusing still, in other companies product management is heavily involved in the marketing communications department, Johnson adds. 'Frequently marcom doesn't really know anything about our products. All they know how to do are programs, trade shows and Web sites. They rely on product management for content.'
Marcom complicates the picture
'Often, product management is pulled into being the content provider for marcom, ' says Johnson. 'In the past few years, product managers have been spending a great deal of time supporting the sales effort--going on special calls, explaining the product roadmap and being the technical encyclopedia on the product to the sales force.'
Let's get our jobs straight: How to work with development and marcom
It's very easy to develop bad habits and to micromanage, Johnson warns. 'Just as product management should bring market problems to development to solve, we should bring channel problems to marcom to solve.
'Instead of telling marcom what to do, we need to articulate the problems the channel is encountering and ask marcom to use their brilliance to solve channel problems.
'Do you need a Web page, or does a brochure make more sense? Should we go to this show or that one? These are all questions marcom can answer.'
Marcom will waste your time if you're not careful
A few years ago, Johnson's marcom managers decided that a press tour was in order. He sat down with them to discuss the positioning of Pragmatic Institute's new story.
'The next day, my marketing specialist brought me the presentation she had created from our meeting, ' says Johnson. 'She had about 40 slides plus speaker notes. She knew I planned to talk about adoption of the product category in the general market, so she pulled estimates from Gartner Research to illustrate the point.
'If your marcom people cannot duplicate this feat, you need new marcom people.'
Integrated marketing is a complete campaign, with brochures, mailers, advertising and Web-site updates. 'Effective marcom people bring the entire campaign, with concepts, benchmarks, expected results and target lists, ' Johnson explains. 'They get one approval for the entire campaign instead of one approval per individual piece.'
It can't be stressed enough: 'Marcom is the specialist in communication, and product management is the expert in the market--but not in market communications, ' says Johnson.
How should product managers support sales channels?
Johnson's golden rule: 'Product management helps sales channels; sales engineering helps individual salespeople.' Product managers should create sales tools and marketing programs that assist all salespeople, along with creating new products for the channel to sell, according to Johnson.
'Product management supports sales channels; sales engineering supports individual sales efforts, ' he adds. 'In fact, many companies would be better served hiring fewer product managers and more sales engineers.'
Sales engineers cement technical sales
'Sometimes called 'systems engineers,' 'pre-sales support' or 'field consultants,'' Johnson explains, 'SEs act as the 'technical encyclopedia' during the sale, representing the technical aspects of how the product solves specific customer problems.
'They perform technical presentations for the product. They own the demonstration script for the product. With adequate staffing of trained SEs, product management should not go on sales calls and customer demos.'
Create buyer-user personas
Buyers and users are two different animals, and it's the smart product manager who knows it. 'Our developers are at the far edge of technology adoption, ' says Johnson. 'With product management creating a definition or a biography of users who buy and use our product, we have a clearer view that we, the company, may not truly represent our buyers.
'This is why it's important to have user and buyer personas. For most technology companies, users don't buy the product and buyers don't use the product. The CIO or the IT manager may do the buying and then dump it on the user.
'How many company employees get to choose their laptops? It's more like, 'Welcome aboard, here is your laptop, here is Microsoft Office. We bought it for you on your behalf, and we didn't ask your requirements.
'Microsoft estimates that only 20 percent of the functionality of their products is ever used. It's because of this buyer versus user dynamic.'
Sidebar: Get to know your customers by running customer advisory boards
You can't know enough about your customers, Johnson asserts. It sounds obvious, but you'd be surprised how many companies give lip service to that essential business commandment.
'A proven way to validate that your product direction is in sync with your customers' technology and business plans is by putting together a customer advisory board (CAB), which is a representative group of customers that meets periodically to offer advice on the product and company direction.'
How to put a CAB together
'Schedule meetings twice a year at your company or a nearby hotel so that as many employees can attend as appropriate, ' says Johnson.
'An annual user group meeting is an ideal forum for holding smaller advisory councils, since the customers are already there.
'Three or four vendor employees, led by product management, can facilitate the meeting. Development leads, and product architects are also involved; they'll be amazed at how real people perceive the products.
'Salespeople usually want to be on-hand if their customers are invited. Try to get the company president or general manager to stop by and kick off the building. It makes for a great start.'
Eight tips for planning a CAB agenda
CAB tip #1: Start by introducing company personnel and customers. Ask that the customers not only introduce themselves, but tell a little bit about how they are using your product.
CAB tip #2: Present each adviser's strategic technology plan. Ask each adviser to present three or four slides about where his or her company is headed strategically, perhaps as it relates to your product, including planned shifts in technology, projected changes in employee headcount and any new business initiatives that may have an effect.
CAB tip #3: Discuss current challenges. Before you start talking about your strategy, take the time to listen! What challenges are your customers facing when dealing with your product and company?
CAB tip #4: Present an overview of the product line. Don't assume that your customers know about your current product line. Give a brief overview of the features and benefits of your current products. Customers may learn that you have solutions to their problems.
CAB tip #5: Outline the roadmap of product plans. The objective is to get your customers' feedback on the product plans. Ideally you want to give as much information as possible and include a demonstration of a prototype, if feasible, to maximize the feedback you will get.
CAB tip #6: Open the floor to discussion. A good facilitator can make an open discussion very productive; without a facilitator, this often turns into a complaining session. Have a list of items for discussion, such as features ideas, new products suggestions and new technologies that your customers are using in conjunction with your products.
CAB tip #7: Organize breakout sessions to get feedback in smaller groups. There may be certain discussion areas that are more interesting to some than to others. By using more focused sessions you can get more detailed feedback.
CAB tip #8: Review the main points from the day. Ask what they liked and disliked about the session. Solicit suggestions for improvement.
Warning: Avoid making commitments in a customer advisory meeting. 'This is an input session, not a decision-making body, ' adds Johnson. 'And it's not a good idea to continue to hold additional meetings if you haven't delivered on the design s revealed in past meetings.'
There is no such thing as a typical product manager
Each year, Pragmatic Institute® conducts a survey of product managers, marketing managers and other marketing professionals. Last year the survey was mailed to 5,000 marketing professionals. Here are some of the results, which provide a confusing picture of the average product manager's job:
Product managers work in the following departments:
- 23 percent are in the marketing department
- 15 percent are in the product-management department
- 15 percent are in development or engineering
- 10 percent are in the sales department
- 43 percent report to a director
- 30 percent to a VP
- 27 percent report directly to the CEO
The majority of product managers are researching market needs, writing requirements and monitoring development projects.
- 72 percent research market needs
- 55 percent prepare business cases
- 24 percent perform win/loss analyses
- 85 percent monitor development projects
- 79 percent write requirements
- 50 percent write specifications
How product managers spend their time
- The average product manager receives 65 e-mails a day and sends about 33
- The average product manager spends roughly two days a week in internal meetings (14 meetings per week)
- 30 percent attend 15 meetings or more each week, and 25 percent attend 19 or more meetings
What companies should do
'They must start thinking about product management in a strategic way so it's separate from communications, development and sales, ' answers Johnson. 'Technology companies should start looking at a product horizontally through an organization.'
'To accomplish that, they must get their business acts together. Fifty percent of companies have product plans, according to the Pragmatic Institute survey. It's incredible to think that every other product has a product plan. That means 50 percent of software companies wing it, they do what feels good, or they run their companies as if they were hobbies.'
The envelope, please: Product management defined
'Product management's primary role is to define and quantify products in the market and then deliver the information to development in the form of requirements, ' explains Johnson. 'Then development has a clear problem to solve.
'In my experience, developers and engineers are inherent problem-solvers. Yet marketing, product management and sales executives have become features-speakers. They'll come to a meeting and say, 'Here is the problem in the market: we need the features.'
Or, 'Our competitor has the features; we need them too.' So development builds the product, then it's taken to marcom who tells us it's scalable. And then it's on to the salespeople who must find a way to translate the features into benefits. And they're all spinning wheels and going nowhere because they are missing the root problem.'
Successful startups that get it, understand the marketplace
The good news is that the first product of many start-ups Johnson has encountered is a brilliant idea because it is grounded in the reality of the market. 'Typically, the president has created a product to solve a problem in a real job, ' he says.
But startups that blow it, guess
Conversely, 'many products fail because the president has created something really cool he thinks other people need, ' Johnson adds. But the products languishes or dies, and the company goes nowhere--or folds because the president is making weak assumptions about customer needs or thinks he can create a problem.
Product managers' most important function is strategic rather than tactical
'Organizations that thoroughly understand their market support product management's strategic efforts rather than supporting their tactical tasks, ' says Johnson.
What should the job description of the ideal product manager look like?
'Broadly, product managers must be able to build products from existing ideas and help develop new ideas based on industry experience and contact with customers and prospects, ' says Johnson.
Additionally, they should have some or all of the following qualifications:
Unique blend of business and technical savvy
That's a 'big-picture vision and the drive to make that vision a reality, ' says Johnson. 'Product managers must enjoy spending time in the market talking to customers. They have to understand customers' problems in order to find innovative solutions for the broader market.'
Ability to communicate with all areas of the company
'It means working with an engineering counterpart to define product-release requirements, ' says Johnson, 'and with marketing communications to define the go-to-market strategy and help them understand the product positioning, key results and target customer. Additionally, product managers must be the internal and external evangelists for a company's products, occasionally working with the sales channel and valuable customers.'
What are a product manager's most important responsibilities?
Johnson lists the top four:
- To manage the entire product-line life cycle from strategic planning to tactical activities.
- To specify market requirements for current and future products by conducting market research supported by frequent visits to customers and non-customers.
- To drive a solution set across development teams (primarily development/engineering and marking communications) through market requirements, product contract and positioning.
- To analyze potential partner relationships for the product.
What are the ideal job requirements for a product manager?
- 3-plus years of software-marketing product-management experience
- Understands technology
- Computer-science or engineering degree or work experience a strong plus
Powerful advice and ideas for product managers
Summing up, Johnson winds down with 10 rules for successful product managers to live by. Some stress earlier points; others are more food for thought.
Product managers' rule #1: The best product managers follow the Pragmatic Institute maxim: Your opinion, while interesting, is irrelevant. Always use market facts to decide the best course of action.
Product managers' rule #2: Product management is a not a 'natural' fit for everyone. A good product manager has a technical background with business savvy. Software engineers and programmers, for example, can make a smooth transition to product management because they're starting off with a strong technical background. But technical smarts alone won't cut it.
Product managers' rule #3: In 'Crossing the Chasm, ' Geoff Moore says that product management is a senior, business-oriented role and typically fails because we staff it with junior, technically-oriented people.
Product managers' rule #4: Credibility comes from being able to manage the business of the product. Otherwise, product management gets relegated to a technical support role.
Product managers' rule #5: Product management is about delivering what the market needs. Good product managers spend more time in front of customers and potential customers; they spend less time on sales calls and in their corporate offices.
Product managers' rule #6: Product management is not necessarily about delivering what the customer asks for. The best products solve the customer's problems and no more. A product manager has to observe and understand what the customer needs in order to solve the problem, rather than building the features the customer requests. 'The old guys at Home Depot do this well, ' says Johnson. 'They don't ask you what you want to buy; they ask you to describe your project so that they can tell what you need to buy.'
Product managers' rule #7: Mature companies value product management and enjoy shorter time to market. According to a survey Pragmatic Institute conducted with softwareminds, companies that consider product-management business critical cut their time to market in half. This results from more focus on the product and less last-minute reaction to sales demands du jour.
Product managers' rule #8: Product management usually fails when organized in the development or engineering team. Technical managers do not consider product management a value-add to their teams and relegate them to project management and scheduling.
Product managers' rule #9: Similarly, product management fails in sales departments. Naturally, sales management considers product management a sales resource and allocates 110 percent of its time for supporting salespeople.
Product managers' rule #10: It seems counter-intuitive, but product managers who spend a lot of time supporting salespeople find that they are not valued by their companies. Invariably, the product managers who have been laid off are the ones who are closer to sales.
Copyright © 2004, SoftwareCEO Inc. This article originally appeared at www.SoftwareCEO.com. Reprinted with permission.
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