Where should product management report?

Each department in your organization needs product and market information to make sound business decisions. Executives need a business plan and a roadmap. Development needs prioritized requirements. Marketing Communications needs messaging that resonates with buyers. Salespeople need to understand how product features address real customer problems. Many executives vie to have product management and marketing professionals in their department, likely because each realizes the need for product and market information. But each department has a different objective and imposes a different focus on the product management role. In short, executives typically focus on the word that follows "vice president" (marketing, development, sales, etc.). Our survey data shows the department that contains the product management and marketing roles changes as revenue increases. Companies with less than $1 million in total revenue often have product management reporting directly to the CEO. As companies grow, the product management role moves from the CEO to its own dedicated department. With the exception of the smallest companies, 40% of organizations have product management reporting either to the CEO or to the head of Product Management, 20% of product managers report to Marketing, and 13% to Development with only slight deviations by company size. [caption id="attachment_11619" align="alignnone" width="505" caption="percentages by company size for where a product management group reports"]percentages by company size for where a product management group reports[/caption] What happens when product managers report to different departments? When compared to a dedicated product management or product marketing department, those in Marketing tend toward go-to-market activities while those in Development focus on the technical. Organizations come in many shapes and sizes, and what works for one company may not work for you. But every product team in your organization--development, marketing, sales, and others--needs product and market knowledge. What Does This Mean to You? A decentralized approach puts knowledge close to the people who need it. However, this can lead to strategy fragmentation, where the message changes by the time it reaches developers and customers. A centralized department has the beauty of a single voice. The information getting to developers, engineers, salespeople, marketers, and customers comes from the same organization. Either way, a world-class product management department must deliver market knowledge to executives in the form of business plans and product roadmaps, to development with market-driven requirements and priorities, to marketing communications as market-focused positioning, and to the sales team with sales tools that resonate with buyers. Simple rule: individuals on your marketing team should not spend more than one day each week supporting any other department. What Should You Do Next? Companies have an unchanging need for market knowledge and product expertise. The question is where should this knowledge reside--in a large centralized department or distributed to others? Put knowledge where it counts. Demand for market data should come from other departments--you want that. But time spent supporting one area comes at a cost to others. Our experience tells us a centralized department that serves other functional areas is the best approach. The collaboration within the team is highest and the likelihood for bias is lowest. Regardless of where your team reports, as a leader you must ensure that team members have clear priorities, because demand for rich product and market knowledge will always outstrip supply.
Steve Johnson

Steve Johnson

Steve Johnson was a founding instructor at Pragmatic Institute, a role he held for more than 15 years before he left to start Under10 Playbook. In his return to Pragmatic Institute, Steve supports the complete learning path for product teams, ensuring they are fully armed for success. 

Over the course of his career, Steve has helped thousands of companies and tens of thousands of product professionals implement product management processes. He has worked in the high-tech arena since 1981, rising through the ranks from product manager to chief marketing officer. Steve has experience in technical, sales and marketing management positions at companies that specialize in both hardware and software. In addition, he is an author, speaker and advisor on product strategy and product management.

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