Early in his career, a company president worked for an organization where product managers did demos and answered product questions. He later moved to a very large European technology company, where the product managers owned the profit and loss, ran a line of business, were responsible for hundreds of millions of dollars in revenue and answered to senior management.
He was surprised by how vastly different the two were and wondered how these could possibly be the same people. They weren’t. There are really two models that are prevalent when we talk about people in product roles. One is the profit-and-loss business leader and strategic player; the other is the product expert that answers the questions and supports the field.
>Often, general management actually wants product teams to be strategic, to plot direction and to own the profit and loss. But it’s difficult to manage the P&L, when they don’t have control of the “P” or the “L.” They don’t own the channel, are not approving transactions, are not the revenue generators and certainly have limited accountability for costs. That’s a difficult position to be in. It’s easier to simply say your product people are walking sets of documentation, but that limits their value.
Clearly, the profit-and-loss business leader role is held with greater regard as part of the leadership group, but how do you get your product team into that role?
One answer might come from looking at the sales force. Why do executives put so much credence into the direction and advice given from the sales force? One would argue that sales has a seat at the table, because that’s where revenue comes from. A look around the business, however, shows that revenue comes from support, consulting and a lot of other places too—yet they don’t have the same kind of impact as our channel organizations.
The reason they have the influence is that they are the ones who:
- have the market data
- face the competition
- hear from prospects and customers
In many organizations, the people that are out there asking questions are exclusively on the sales force. And that market interaction translates to credibility and to insight.
To elevate product teams in the eyes of the business, you have to give them access to that same kind of market interaction. It’s important to get outside of the building to become the expert on what’s going on in the market. By having that market knowledge and expertise, product teams have a currency that is very usable inside the business.
With that credibility and understanding, they can start to talk about business issues—instead of just product issues. They can start to talk about how to do things like grow revenue, increase market share, stave off competition, identify new areas of opportunity and make strategic shifts in technology or target markets—all of the things that are really required at a management level.
When product organizations make that leap from being reactive support organizations to being proactive and empowered by market knowledge, the entire role changes in the company.
For that company president I spoke about, seeing how much value a business-savvy product organization brought to the company, he vowed that he would always empower his product managers to be business contributors, not just support people.
His story struck a note with me about how differently companies treat the product management role. Product organizations do best by moving their focus from being product centric to being market centric and immersing their teams into the market. And product execs play a critical role in making this happen.
We must ensure that our teams have the opportunity, the time and the budget for travel, industry events, research and being engaged in blogs and discussions. And we must incentivize them with metrics that drive compensation and bonuses. Typically, companies give the plaque at the annual meeting to the best sales support resource in the building who helped close the most deals. Where’s the plaque for the person who immersed themselves in the market and brought back the best market information to drive the company forward? Recognition should be based on market interaction, and not just internal support.
Provide that kind of management endorsement, direction and enablement and then measure it, review it and give the people the tools and the knowledge they need for continued growth. Then, hold them accountable.
When I ran a company, I wanted to elevate my product teams beyond doing sales demos. So when my product managers said they were invited by an industry group to sit on an expert panel at their national convention, I thought, “Now we’re getting somewhere.”
When your people are considered experts in the industry like that, you have developed a valuable asset—one that can be leveraged internally for strategic leadership. Giving them the opportunity to get out into the market helps them become those experts.