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.
1. Inflated Authority
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.
2. It Is Not Reality
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 Institute 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.
3. Product-Only Focus
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.
Agents of Change
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.
A Product/Market Pairing
Typically, product managers spend too much time on the product and not enough time on the industry, the market, the customer and the competition. But those who think more broadly about their role recognize that product managers must understand market problems, product solutions and how customers gain value from business offerings. It’s this duality of the product/market pair that product managers should be responsible for, yet too many companies underemphasize this aspect of product management.
Many people in the company are product experts, but being the voice of the market back to the company is where product managers make the strongest contribution. Product managers should be the chief explainers of the product/market pair, both inside and outside the company. Where are the greatest opportunities in the market? How does the company’s offering provide great value to targeted customers and how is it superior to alternatives? Successful product managers answer those questions convincingly and persuasively. The product/market pair approach ensures that customers get what they need and companies can make the best use of investments to generate stakeholder rewards.
Even when product managers act like change agents, have a strong business orientation and motivate others with a compelling product/market pair, they will not succeed unless senior management and the corporate culture support their activities. Too often, there is a major disconnect between the product manager role as defined in the company job description (if one exists), and the day-to-day demands that senior management and other departments place on product managers.
If these directives are reactive, tactical and technical, they contradict the “think like a CEO” approach. Product managers will be torn between representing a strategic, market-oriented mindset and a tactical, product-oriented one. For product managers to have the positive impact we advocate, they must receive adequate time, prioritization and resources.
For example, if the product manager is proposing a market-research project targeted at understanding a new, emerging need in the target market, the VP of engineering is requesting that the product manager work with the UI designer on some interface refinements, and the VP of sales is requesting that the product manager get on a plane to help close a deal, which activity does senior management prioritize? If it isn’t the first one, that product manager is being treated as a technical, product-oriented resource, not as CEO of the product.
So, are product managers CEOs of their product? No, not today. The analogy we’ve shared doesn’t describe the activities and behaviors of most product managers. Their focus remains too narrow and they lack the authority and resources that CEOs have.
Should product managers be CEOs of their products? Yes, but with some explanation. Product managers are not suddenly granted authority to make unilateral strategic decisions and direct others to obey. Instead, they should think like CEOs by becoming change agents and articulating a compelling business vision of the product/market pair.