Product Management are really Super Heros in Disguise!

In my opinion, there are two really hard jobs inside a company. One is being a CEO, and the other being a product manager. A few reasons why I believe this. Both the CEO and Product Managers are expected to be the most flexible acrobatic kind of leaders — adjusting to people’s styles, making sure to communicate with clarity the requirements of what is needed, translating vision into specifics and constantly at the beck and call of many constituents. It’s a wonder someone would take the job. Either one.
As the point of contact between customer needs and engineering realities, a product manager is the linchpin who can make a product into a market success – or doom it to irrelevance. This can determine whether a company lives or dies. Yet, I’m finding that many people don’t really get product management. They often fail to give product managers the support, training, and empowerment they need to succeed. So this blog is dedicated to all of you Product Managers.
This is going to be my effort to put the supercape hero onto Product Managers and certainly share what I think they need to be successful. Note to all product managers: share this with your boss.

Gone are the days also of product managers creating a thing. Some of the existing concepts in the industry today are based on old-school thinking of what constituted a product. Think again of my Dell example. In the 80’s, Porter’s model focused on the competitive edge of a company being done by a silo function: design – manufacture – build – market – sell – deliver. You’ve seen me write about that in the new Value Chain. Product Managers have to be the first to get the product definition vision like this, otherwise the market will move from underneath the company. It was a 2 year cycle, and it was largely about defining an product and then shepherding that product to life.
That’s so not the case anymore. Products are not the thing, solutions are. But I’ll get back to that later. I’ve been thinking a lot about what constitutes market power in today’s era. I think I have a notion that replaces Porter’s model, at least in Technology and the web 2.0 era. [I’ll blog on that soon.]
Why does product management matter?
In a word, globalization. More than ever before, efficient and low-cost companies in other parts of the world, some of them government-subsidized, have access to markets in the first world. Many of these companies specialize in the rapid, low-cost production of generic copies of successful products. A company based in the developed world can’t win just by making a good product at a reasonable price. To survive, western companies must innovate – and they must make sure their innovations are compelling enough that customers will value them, even if they cost more. I would also argue that what needs to get made today is “solutions” and not “products”. That requires inherently a broader aperture to understand the situation clearly.
• One of the most successful products on the market today is the Ipod. When Apple introduced it, the market for MP3 music players was commoditized, and dominated by no-name Asian manufacturers. They were playing a hardware game, and the customer was expected to do a lot of work to assemble the real solution. Apple created the iPod (the hardware) but what made it, it, was its accompanying iTunes music service. Apple’s approach made e-music purchase and playback much easier than it had ever been before, and the market rewarded Apple with an estimated 70%+ share in the US market for mobile music players.
• The solution is also tied to who is using / deploying the solution. When selling dental implants and crowns, the customer isn’t the person getting the implant, it’s the dentist who sells the implant and installs it. For these customers, a major drawback has been the number of visits required to create and install a finished implant. The patient had to come in once for measurement, and then again days or weeks later for installation after the implant or crown had been created. Recently new systems, such as Cerec from Sirona Dental, compressed the process to a single visit. The patient’s implant is measured in the office, fit is tested on a computer, and the finished ceramic implant is milled by an automated machine in the doctor’s office – all while the patient waits. This increases satisfaction for the dentist’s patient, and saves time and expense for the dentist. Sirona’s insight was realizing that the dentist needed an implant production system, not just a medical CAD software program.
• On the consumer side of dentistry, Proctor & Gamble realized that there was increasing interest in tooth whitening as the Baby Boomer generation aged. But conventional tooth whitening meant either a trip to the dentist or the use of uncomfortable home-use trays that could make people gag. P&G combined its expertise in fabric bleach, toothpaste, and thin film technology to create Whitestrips, a product that lets people whiten their teeth by applying a thin bleach-saturated plastic strip to the teeth. Creating this sort of cross-discipline connection is one of the key tasks of product management. The result in P&G’s case was a renaissance in the stale and commoditized tooth care business. Suddenly tooth whitening was easy and convenient, sales took off, and some reports show P&G’s Crest brand displacing Colgate as the market leader.
The markets above for things are simple as tooth cleaning, music, and dental implants are vastly different, but the common thread between these solutions was that the manufacturer had an important insight into the customer’s unmet needs and how they could be answered through solutions. Generating that sort of insight is the essence of product management done right.
How product management fails today
Theoretically, a product manager’s involvement in the development of a product should be concentrated at the beginning and the end of the process. At the beginning, the product manager is responsible for defining the product – who it’s for, what problems it will solve, and how big the opportunity is. At the end of the process, the product manager is responsible for feeding that information to marketing, in a form that they can easily transform into messages and deliverables.
The reality at many companies is that the product manager often gets pulled into the middle of the development process as a problem-solver. When there’s a risk of a schedule slip, a conflict over resources, or a change in the market, the product manager often ends up attending meetings and researching options, which eats into the time available for their core tasks. We’ve worked with companies where the product managers are so overburdened that they can no longer truly lead their products. They can’t do the up-front work necessary to define a winning product strategy, or the back-end work to make sure it’s marketed properly. The result is inevitably mediocre products that don’t hit their sales goals, and product lines that aren’t well differentiated from their competitors.
A critical goal for any company’s product management process should be to avoid this time trap.
Ways to get it right
To get consistent and insightful leadership from product management, a company needs to take several steps. Failure in any one of them can cause the process to fall apart. The steps are:
1. Create a corporate culture in which product management can lead.
2. Support product managers with information and peer groups that can help them succeed.
3. Train product managers to listen properly to three key audiences – customers, competitors, and their own executives.
4. Hire product managers and engineers who can work together.
1. Creating a culture in which product management leads.
In many companies, engineers are the kings and queens of the product development process. They build what interests them, or what they think some imagined customer would want, no matter what input they get from others.
Our favorite example at Rubicon of this thinking was an engineering director who once sent a memo to product management saying, “we’ve finished designing the product, now we need you to write the Market Requirements Document so we can do the launch.” The company where that happened was once a major technology player; it’s now on the verge of bankruptcy.
Sometimes engineering-led companies are successful. If they have brilliant engineers, or if they get lucky, they may manage to hit a sweet spot in the market. But most engineering-driven companies have very inconsistent results. Many of their products will win praise from technophiles but won’t sell in volume. Numerous Asian consumer electronics companies are notorious for this, but they have cost structures that permit them to do “spaghetti development” in which they throw large numbers of products at the market to see what sticks. Western companies, with their higher cost of development, need a much higher success rate.
The ideal culture for success is one in which product development teams acknowledge the leadership of product management. They may argue about features and advocate their own ideas, but in the end the product manager makes the decisions and engineering carries them out. This is actually a two-way deal – product management should decide what needs to be done but let engineering figure out how to do it. A product manager who starts second-guessing pure engineering decisions usually ends up neglecting the work that only a product manager can drive.
2. Getting the right information and peer support.
Product managers’ thinking about the market will be only as good as the information available to them. That sounds obvious, but it’s surprising how many companies make major business decisions based on poor or sparse information.
Companies often depend too heavily on the advice of syndicated industry analysts. The analysts are valuable to get a point of view, but their advice usually reflects the industry consensus, and most of the analysis companies don’t have enough budget to do original quantitative research in all of the markets they cover. That means most of them are relying on the things they hear from others in your industry, plus their own hunches. That’s not a great basis for running a company. If I see one more person quote Gartner or IDC to confirm a market size or a market trend in a Concept Review, I think I’ll have to barf. I’m serious. It’s silly.
It’s especially important to be cautious about industry growth forecasts. It is difficult for anyone to predict the future accurately, but asking an analysis company that doesn’t do quantitative work to make a forecast is especially risky. The track record of most industry forecasts is remarkably bad. For example, in mobile phones the analysts overforecast demand at the start of the decade, and then have significantly underforecast demand in each of the last two years. Even worse, much of the growth has come from developing countries, at lower price points than most of the analysts expected. Companies that invested heavily in making expensive “smart phones” for the developed world, a market that was supposed to explode, have suffered. Mike Mace, who works for me at Rubicon, has written extensively on this topic, at his blog, and he is the key expert who can poke a hole at any bad number. I wish every team had him on their side.
It’s important for a company to do its own original, balanced research as part of the product planning process. In the case of consumer products, or enterprise products deployed broadly, the research should be qualitative and quantiatitve (in other words, focus groups / 1:1 interviews with early adopters, plus a numerical survey). Doing this research yourself has two benefits. First, it ensures the quality of your data. And second, it allows your product managers to test the exact ideas they’re considering. The more specific the research, the more actionable it will be.
The usual reason companies give for not doing this is cost. But skimping on research is a false economy if you’re investing millions of dollars to develop and market a product. For smaller-scale projects, the Internet has made it much less expensive to conduct quick and simple surveys. A typical project by Rubicon costs about $45-60K to do an incredibly complicated set of 20 questions by 4 segments, and find real insights. There’s no excuse for not doing your research.
3. Listening to customers, executives, and competitors.
One of the more common questions we hear about product management is why company A is successful and company B is not. The standard explanation is often that company A somehow does a better job of listening to its customers. But it sounds superficial, and perhaps even a little b-schoolish, to imply that success could be so tied to a single axis.
We like to turn the question around. Rather than asking who listens to customers, the thing to ask is who they listen to, and what they listen for.
There are three primary audiences a product manager needs to listen to:
The customer. It’s critical to know what’s important from the perspective of those buying and using the product. Take lots of notes, but then sit back from all the specific input and ask: What are customer pain points? What are customers doing now to solve the problem? What can you do creatively to solve the problems? Remember that people can go on and on about things they would like to do, but won’t necessarily pay for. The most important task is to figure out what they need, not what they ask for. We like to use these questions when defining new markets:
• What keeps the customer awake at night?
• How could a product (any product) or service solve that problem? What must it do?
• Why could you provide the best solution?
Executives. It’s important for product managers to listen carefully to what members of the company’s executive management team say about the product. Not because they’re in charge (although that’s a good reason), but because a product manager needs to understand the key influences driving the company. What do the execs want to achieve? Is it share, is it growth, is it acquiring a particular customer segment?
Product managers who are listening for these priorities use them to guide product strategy. For example, say top management was interested in creating beachheads in new markets. That would mean pricing a new product high for short-term revenue optimization would be a very bad idea.
The competition. The most successful products answer unmet needs, or answer existing needs in new ways. To make sure a product will be unique, a product manager needs to understand what the competitors are doing and where they could be going. How do the competitors position themselves? Is there any unclaimed space, or a fulcrum where leverage could be applied to move a market? An assessment of the competition should include an analysis of their advertisements, marketing materials, blogs, and community forums. The goal is to understand how they describe themselves, and how others describe them.
Sometimes it helps to plot these findings on a quadrant or perception map. This can make it easier to spot new opportunities not claimed by others.
4. Hiring product leads and engineers who can co-collaborate
We see this problem most often in high-flying companies with growing stock values: they hire the most capable people they can find for every position in the company. This sounds great, but superstars often have the biggest egos, and it can be very difficult to get them to cooperate as a team. (If you’re a sports fan, the best example of this ever was the 2004 Los Angeles Lakers, a team that was packed with superstars but self-destructed in the NBA finals.)
In our experience, companies are most effective when they hire people who are well suited to their roles. It’s usually better to have a “B” player who knows exactly what to do than an “A” player who tries to do everyone else’s job for them.
In the case of product managers, that means hiring people who are good at setting direction, understanding customers, and persuading others. Product management is a classic influencing job in which success is defined by persuading other people to do things. The product manager must be able to get out of the way of implementation – as we mentioned above, a product manager who tries to micro-manage any part of the implementation process will fail.
Product managers also need to be teamed with people who are willing to work with them. Their most important peers are the product development staff. If the product developers are intent on setting their own direction, the product manager is doomed to failure from the start. It’s usually better to hire a good engineer who’ll work with a team than a brilliant engineer who refuses to take direction.
Hit products like the iPod aren’t the result of a single genius being struck by a lightning insight. They can be designed systematically through the right combination of processes and leadership.
Good product management is the key to making that happen. Good product management can make good companies, great. And ultimately they are the key to company success for the long run. Get that cape on, you’re going to need it for how high you’re gonna fly.