10 Steps to Implementing

B2B Product Management

The CEO Playbook
by Jim Berardone
This book was written in the spirit of expanding and improving the practice of product management – a body of knowledge for which I am indebted to many people.
Accordingly, the work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License (CC BY-SA 4.0). That means you are free to copy,
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10 Steps to Implementing B2B Product Management: The CEO Playbook

February 2016
Copyright © Jim Berardone.
Book design by Brittney C. Norris, Illustrations by Hugo Teixeira
Foreword
Sooner or later, it happens in just about every growing business:
somebody trusted by the company’s CEO takes him or her aside and
earnestly suggests that it’s time they consider taking on a product
manager and creating a formal Product Management function. It’s a
suggestion that carries important consequences. But few CEOs are
prepared to immediately recognize or prepare for those consequences.
This book is designed to help the CEO understand the advice they’re
getting and figure out how best to respond.

I think I can be of help. Over the years, I’ve helped to inaugurate this
function for a number of employers and clients. I’ve also advised
the CEOs of different sized early-stage and established technology
businesses about why and how to form a Product Management function
in their organizations. It takes more than simply hiring a product manager.

Here’s what I’ve discovered: With very few exceptions, the company’s
founder/CEO had done an excellent job of recognizing a business
opportunity, creating a vision, building a team, raising money, generating
revenue and growing their company. Many of them were quite innovative.
Some were very profitable, enjoying high margins. Others grew
exceptionally fast.

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At the same time, though, there So how can they grow toward the
were others that failed – some future, while maintaining focus on
fast, some hard, some just by the present? How can the CEO step
plodding along. That’s because the You need to devise an back from making product decisions
early successes that CEOs had without the product losing its way?
experienced were due, in large part, approach to product It’s a conundrum. As Ben Horowitz,
to holding steadfast to a vision without a leading Silicon Valley technology
losing sight of the myriad details management as unique investor put it: “The only thing that
and decisions which relate to their will wreck a company faster than a
product – strategy, development, as your company. CEO being highly engaged in the
commercialization, delivery, and so product is the CEO disengaging
on. After all, great execution is all from the product.”
about mastering details – which is
also, as traditional wisdom reminds That’s when it’s time for a CEO to
us, where the devil resides. It is a combination of those hear their inner voice, their board’s
dysfunctions which typically trigger voice, or their friend’s voices urging
At some point, however, things the CEO’s moment of awakening: them to consider hiring a product
would begin to change. The pace of a missed product release date, a manager. That’s also when I get
value-creating innovation slows. The product launch that bombed, the their call to help. But, time and time
CEO’s decisions about products and loss of a big sale opportunity, a again, what I find is that they’re
customers become reflexive and less key customer who switched to a ambiguous about what they need,
informed. The CEO’s door becomes competitor, a technology having why they need it, what a product
a bottleneck to product improvement. reached its limits, etc. These are the manager’s role and responsibilities
The number of projects, products and moments when CEOs recognize the should be, what implications it would
market initiatives started, and then need to scale their business for the have on their executive team, and
later abandoned, multiply. Frustration future. But if the company’s product what impact it would realistically
within the product team becomes and its CEO are inseparable, how have on their bottom line.
palpable. can the CEO scale him or herself?
They can’t.

2
Some take a minimalist view. They strong change management. It’s Apple’s approach or duplicate the
think they only need someone to critical to get all of them right because job descriptions of other companies.
create a product roadmap and keep it can be very expensive to get them You need to devise an approach to
it current. Or they think they need wrong – both in direct costs and Product Management as unique as
someone to write good product opportunity costs as well as in staff your company.
requirements, or get product releases motivation.
out faster, or get the CEO’s favorite That’s why I wrote this book.
product ideas done. But they rarely At the same time, however, it can
understand the magnitude of the be difficult for CEOs to sort through
decision they’re facing, the changes it the noise of conflicting ideas and
involves, or the leadership it requires. advice they get from their teams,
To be successful, the introduction investors, peers, experts, bloggers,
of product managers requires and so on. Particularly when Agile
collateral changes in the way things product owners and UX designers are
are done and who is responsible increasingly thrown into the mix, the
for doing them. In essence, it confusion only multiplies.
requires introducing a formal Product
Management function into the Compounding that confusion is the
company. fact that there’s lots of variation in
the ways Product Management is
From my own experience as well implemented; there is no single way
as the experience of others, here’s to set it up, nor should there be. Every
what’s needed to establish that sort of company’s situation is unique with
Product Management function: First, its own business goals, strategies,
having clearly defined business goals business models and customer
and strategies. Second, establishing value propositions. Accordingly,
clear roles and responsibilities for the every company requires a distinctive
product manager, the product team Product Management solution.
and the CEO. And finally, having You can’t simply copy Google’s or

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Table of Contents
What’s the Point of Product Management? ....................................................... 6
Step 1: Define Your Goals and Strategy ............................................................. 9
Step 2: Pick a Posture ...........................................................................................11
Step 3: Allocate Your Product Development Investments ...............................14
Step 4: Determine Who Decides .......................................................................... 17
Step 5: Establish Where Product Managers Should Report ............................ 22
Step 6: Decide Who Does What ........................................................................... 25
Step 7: Select Your Processes ............................................................................. 31
“The goal of Product
Step 8: Identify Great Product Manager Attributes ........................................ 35 Management is to
Step 9: Installing Your Product Management Function ................................... 41maximize the value
Step 10: Measure Your Progress ......................................................................... 49
created by a product
for its customers,
About the Author .................................................................................................... 52
investors and
employees across
that life cycle.”
What’'s the Point of
Product Management?
People tend to get confused about Product Management touches on
product management. That’s probably essentially everything an organization
because the term is frequently does, starting with the genesis of The goal of Product
used – and often misused – in a an idea and continuing through to
variety of ways. Here’s how I see it: managing the products or services it Management is to
maximize the value
Product Management is a function spawns from cradle to grave. They
which includes all the decisions, can begin even before the company

created by a product for

activities and interactions that is born.
shape a product’s business results
throughout its life cycle. To achieve
this, Product Management touches on
When a company is new, its founders
typically assume responsibility for its customers, investors
a number of company departments,
linking them to one another as well
everything product-related. But as
that company grows, its products and and employees across its
as to external markets, as illustrated
in Figure 1. Product managers are
job specialties proliferate. People
who work in design, engineering,
life cycle.
the professionals who guide that production, marketing, sales, service,
function as it applies to specific goods and business management as well
or services within their company’s as in other roles, each assume
portfolio, although many of the responsibility for different aspects of
decisions and activities involved can the company’s Product Management.
be assigned to individuals within the
affected departments.

6
 Figure 1: Product Management Function

Product Management is a function that cuts across a number of company departments to holistically manage a product’s business.

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With so many contributors, however, of Product Management as there
it’s easy to see why the decisions are companies. We’ll explore this in
they make could be best from greater detail later.
their individual perspectives, but
not necessarily best for all of the
product’s stakeholders. That’s where
product managers come in. Their job
is to transcend the company’s org
chart and manage the business of its
products so that all of its stakeholders
realize maximum value. That’s why
product managers are often called
the CEOs of their products; it involves
creating the right product, building it
right, marketing it right, selling it right,
delivering it right, and supporting it
right while keeping it in synch with the
company’s overarching strategy and
goals.

At the same time, though, the

details of every company’s Product
Management function will vary with
the company’s strategy and products.
So will the tasks of its product
managers. As the company’s strategy
evolves, its Product Management
function changes along with it. As a
result, there are as many variations

8
STE P 1
Define Your Goals & Strategy
Okay. Let’s say you’ve made the stemmed from the lack of clear,
decision to embark on a Product specific product requirements. So
Management voyage. Where do writing clearer requirements for future
you start? There are several key
factors a CEO needs to address
product releases became the product
manager’s mission.
If short-term problem
upfront in order to establish Product
In another case, the CEO, sales solving becomes the
Management companywide.

The first is strategy. Designing

executive, and even some customers
of a well-established company voiced focus of
your Product Management function
has to start with your company’s
concern about its lack of innovations
over the preceding few years. So
implementing your
overarching strategy. Product the CEO hired a product manager to
make sure the right product features
Product Management
Management is not about quick
fixes to current problems. If short- would be continuously prioritized. function, the
term problem solving becomes the
focus of implementing your Product But, in both cases, the Return-On- ultimate impact on your
Management function, the ultimate Investment from the product manager’s
impact on your company’s business compensation was meager. The company’s business will
will be disappointing. Consider these takeaway: when establishing Product
examples: Management, focus on enabling the be disappointing.
execution of company strategy for
In one early-stage, profitable B2B future success — not on quick fixes to
tech company, the CEO and head immediate problems.
of engineering believed their issues
9
Be specific. Overall strategy needs their established target market.
to be the starting point. But broad Those strategic differences carried
corporate strategy statements profound implications for the way they
frequently lack in clarity and detail. needed to implement their Product
That can keep a CEO from making Management functions.
the best decisions when it comes to
implementing Product Management. For any company, the ultimate
So it’s important that business goals, question is: how do you visualize
as well as the strategies used to generating revenue? To what extent
achieve them, are made explicit and will it be from new customers?
understood in detail. For example: Deeper penetration into current
customers? Retention and renewal
Two mid-sized B2B companies — of existing customers? New
one a voice technology company, the applications? New market segments?
other a healthcare device company New products? New categories? New
— each had essentially identical sales channels? Pricing changes?
business goals for revenue, growth,
and margins. But their strategies for
achieving those goals, as well as the
sources of that growth, were actually
quite different. One was seeking
growth in their existing market by
selling more product volume through
expanded distribution and by tying
prices to customer value. The other
was looking to grow by introducing
a stream of product innovations for
existing customers while reaching
out to prospective new ones in

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STEP 2
Pick a Posture
The choices a company makes in prioritizing its product Apple is a classic example. Try to imagine Apple promptly
development — whether driven by individual customers or responding to every user’s request for a special iPhone
from the broader marketplace of prospective customers — feature — even for a customer as big as Walmart. They
is what I call “Opportunity Posture.” don’t. Instead, their posture of focusing on the larger market
can lead to even greater rewards. But it also carries the
The choice of an Opportunity Posture will directly affect how greatest risks. The reality is that many B2B companies have
a company’s Product Management function is implemented. neither the appetite, the resources, nor the marketplace
That includes prioritizing ideas and requests, responding to position to make a persistent market strategy work.
customer requests, and allocating development resources. It
will also define the ways you compete for customers.
Reaction — These are companies which respond to ideas
that come from individual customers. They see them as
I see two broad postures in general use today, although
opportunities and they frequently say “yes” to requests
some B2B companies seek to blend them:
for new features or capabilities. To them, developing new
customer-requested features may take higher priority than
Persistence — Companies with this posture have a ‘stick some others on their product roadmap aimed at broader
with the plan’ focus. They develop their products either to market opportunities.
fill a hole they see in the larger marketplace, or to reshape
that marketplace in some novel way. To do that, they have Contrary to the belief of many product managers, Reaction
to say “no” to unique product or feature requests that come can actually be a very attractive posture. It generates
from individual customers — whether big or small — if those revenue. Customer relationships are strengthened. Insight
requests conflict with their larger vision or strategic product and expertise are developed. And those same developments
roadmap. can sometimes be offered to other customers. When they’re

11
competing against Persisters for a customer, that can give important role in cementing their relationships with those
Reactors a competitive edge. I’ve seen the Reaction posture customers. After a while, however, it became apparent that
in use at a variety of B2B companies. They include the their products were no longer leading the industry. They had
makers of enterprise software such as decision optimization emphasized each customer’s top priorities while neglecting
products and business intelligence solutions, as well as with those of the larger market.
physical, make-to-order products such as materials handling
equipment and electrical enclosures. Blended – Many companies see value in both approaches
and attempt to blend them. That typically involves accepting
A Reaction stance doesn’t depend on the company’s size a limited number of requests from key customers – which
or stage of life. And, compared with Persisters, it comes reduces the risks associated with solely following a
with much lower risk. However it usually carries lower Persistence posture – while helping to secure some of the
rewards. The problem, from my experience, is that many more immediate and predictable rewards available from
CEOs will take these low-risk actions but still expect high the Reaction posture.
rewards. But it almost never works that way. That’s because
the highest priorities of any single customer are typically The ultimate question is: To what extent will you place
different than those of the overall market. Responding to product development opportunities for individual
individual customer opportunities can actually increase the customers above development opportunities for a broader
company’s innovation deficit. In many cases, the benefits of marketplace? What guidelines will you use to find the
their custom work to other customers in the market never right balance?
materialize. And frequently, to get things done quickly,
corners are cut on the product’s underlying foundations.
That leads to future re-work at significant expense.

Consider this example: over many years, one established

The highest priorities of any single
business intelligence software provider jumped at
opportunities to build the high priority features of its biggest
customer are typically different than
customers – and to get paid for them. That became key to
their competitive strategy since the other software providers
those of the overall market.
in the marketplace had declined to do so. That played an
12
Figure 2: Opportunity Posture

13
STEP 3
Allocate Your Product Development Investments
The design of your company’s Product Management resources toward a broad, attractive and potentially
function will be strongly influenced by the ways you lucrative market opportunity. The down side is that
invest your product development dollars. How much their engineering resources would not be available for
of your engineering resources will be allocated toward addressing the priorities of any individual customer,
developing new products? To extending existing no matter how important that customer might be.
products? To maintaining products? To delivering on Because if they did, they might miss the bigger market
customer-specific requests? opportunity. But Persistence is also a risky decision, so
the potential rewards have to be big enough to justify
Think about your investment of engineering resources taking that risk.
the same way you think about investing in mutual funds,
where you have High Growth, Growth and Income, and • At the other extreme are companies that have an
Income-Only investment options. The allocation of your Income-only investment objective and assume a
engineering assets should be driven by your investment Reaction posture – allocating their engineering
objectives and their associated opportunity postures, which resources to opportunities as they arise, customer by
we’ve characterized here as Persistence and Reaction. customer. If the opportunity is with a key customer,
But, as in the case of mutual fund investments, there is or if that customer is willing to pay to have their need
no single choice that’s best for everyone; your own best satisfied, engineering resources would be allocated
choice is driven by the circumstances that apply to your to accomplish it. This approach carries the lowest risk
specific business, and it may be a balanced portfolio. because demand for the desired feature, the resources
required to accomplish it, and the revenue it would
• At one end there are companies that have a generate, are all known in advance for that customer.
High Growth investment objective and assume a The tradeoff is that this approach, while lower in risk,
Persistence posture, allocating all their engineering is also typically lower in reward. That’s because the
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Figure 3: Engineering Investments

New Products. Work on new products for existing

or new markets.

Market Priorities. Work to add value to existing

products, driven by the priorities of the market.

Customer Priorities. Work to respond to a specific

customer priority. The results could be deployed to
the specific customer only or to the broader market.

Maintenance. Work to keep released products

usable, to detect and correct problems, and to
improve performance and maintainability.

Hotfixes. Work to quickly address a problem in a

product for a specific customer situation.

Infrastructure. Work on the technical foundation for

building and delivering new products and product
changes.

15
 company’s engineering assets are not focused on the
broader market’s top priorities.

• Many B2B companies, as previously noted, try to Think about your investment of
engineering resources the same way
balance risk and reward by allocating some of their
engineering assets to market opportunities and others

you think about investing in mutual

to customer-specific opportunities. This Growth
and Income objective, which calls for a blend of the
Persistence and Reaction postures, allows a company
to pursue broader market opportunities, at least to funds, where you have High Growth,
a limited extent, while also responding to customer-
specific opportunities which arise, although there too, Growth and Income, and Income-
only to a limited extent. This approach tempers risks
and promises moderate rewards.
Only investment options.
Changing Company Goals
A company’s objectives and risk/reward profile can morph
products and domain expertise by satisfying the needs of
over time as business conditions change. And, as a
one paying customer at a time. Then later, when the product
company’s investment goals change, so do its opportunity
was ready for a broader market, they shifted their posture
posture and engineering allocations. For example, a startup
from Reaction to Persistence, and their engineering assets
company with a short cash flow runway will typically use the
shifted accordingly.
Reaction posture – responding to the priorities of a single
key customer. However, once the company’s cash flow
has stabilized, they will transition into the pursuit of broader
market priorities by assuming a Persistence posture. In
the past, that was the approach used by companies such
as Oracle, MicroStrategy and Blackboard – companies that
built complex enterprise software solutions. They built their

16
STEP 4
Determine Who Decides
A lot of people are involved in writing a job description and recruiting the product manager’s position into
executing company strategy. It for a new product manager. But when a pass-through post for whatever the
typically results from a series of that new product manager arrives, CEO or product team wants. When
decisions made by a number of along with certain expectations that happens, product managers and
individuals, each with their own about the decisions he or she will be product teams end up frustrated,
responsibilities in the organization. accountable for, those expectations unfulfilled and ineffective. Everyone
In companies with reputations for are almost invariably different from feels disappointed in the meager
strong strategy execution, everyone what the CEO wants and from results of Product Management.
has a clear understanding of who what others in the company are
makes what sorts of decisions. But accustomed to. I keep hearing casual diagnoses
when a CEO introduces product regarding this sort of decision-making
managers along with a formal Product The unhappy result: decision-making paralysis and the circumventions it
Management function, certain slows, frustration mounts, and leads to. They usually go like this:
decision-making rights will need to conflicts intensify. Too much time gets “the CEO or the organization needs
change, and those changes need to spent by too many people on minor to be educated” about the role and
be communicated clearly. decisions. And, in an attempt to avoid responsibilities of product managers.
decision gridlock, insufficient time gets I’ve even had CEOs and SVPs call
That’s where things can break down. spent on the really important issues. me to request training on Product
I frequently see companies that leave Decision timing gets wrapped around Management for everyone in their
this critical step either poorly defined individual executives’ schedules. And, organization. But education isn’t the
or completely unaddressed before in worst-case situations, the CEO solution because education isn’t really
a new product manager begins his parachutes in and overrides product the problem.
or her work. Instead, they jump into managers’ decisions, transforming
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 Tier 1 – Release Optimization
Education isn’t the solution because education Here, the product manager’s primary
isn’t really the problem. The problem is a failure decisions concern release priorities
– what new features should be in
to think through what a product manager should the next product release? What
capabilities are most important to your
truly be held accountable for. customers? To your business? Which
are least important? If one feature
ends up taking more engineering time
The problem is a failure to think the appropriate level of authority to than expected, should you postpone
through what a product manager give a product manager? What skills introducing another feature? Delay
should truly be held accountable for. does he or she need to have? What the product release? Cut-back on
The solution is to decide, and to adaptations need to be made to the the feature’s intended capability? Or
communicate upfront, the decision- decision-rights of other people in the change how the feature is created?
rights of product managers, along with company? These types of decisions typically
consequent changes to the decision- involve making tradeoffs between
rights of everyone else, and to do it Your answers need to be specific. short-term and long-term goals.
before either introducing a Product Too often, CEOs will give an abstract That’s what product managers are
Management function or adding a statement of the product manager’s expected to decide.
product manager. responsibility, but leave out the specific
decisions they’re accountable for. In the Tier 1 model, product managers
Here are a few of the key questions make these decisions release by
that need to be answered before Three levels. I find it useful to think of release, making sure the release
bringing a product manager on three options a CEO has for allocating satisfies market requirements. This
board: What are the essential product decision-rights to product managers. is the narrowest form of decision-
decisions that need to be made? Each Tier can be adapted to fit a rights for product managers;
Where in the organization should company’s specific strategy. they’re responsible for knowing the
these decisions be made? What is
18
customer’s problems, uses and Tier 2 product managers also decide
Tier 2 – Resource and Roadmap
priorities, as well as for using that on the strategic product roadmap
knowledge to create a release plan Optimization as it relates to the company’s
that defines improvements for the business goals, as well as to market
next product release. Other units of In Tier 2, product managers have, in opportunities. They decide the
the company will make decisions addition to their Tier 1 responsibilities, sequence and timing of new product
independently regarding the product’s significantly broader decision-rights. capabilities which apply across
business. For example, Sales They decide how much engineering multiple releases, and when the
may make customer pricing and resource capacity to invest in different product should address new types
discounting decisions; Marketing buckets of product work including of users, new product applications,
could make competitive positioning new products, market-driven product new market segments, and new
and sales enablement decisions; enhancements, customer-specific technologies – all of which need to
R&D might make build and supply opportunities, sustaining development, be captured in the strategic roadmap.
decisions; and the executive team product infrastructure, and hot fixes, They actively prioritize and re-balance
could decide when to introduce a new as shown in Figure 3. investment in development across
product or enter a new market. these buckets while managing
that roadmap. Tier 2 requires
product managers to anticipate the
future needs of their customers, to
understand those needs in depth,

When a CEO introduces product managers along with a

and to recognize the implications
of external developments on the
formal Product Management function, certain decision- product’s marketplace.

making rights will need to change, and those changes

need to be communicated clearly.

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 Figure 4: Product Manager Decision-Rights Pyramid

Optimize the Product’s Business Preformance

- Make cross-functional marketing mix tradeoff decisions
- Create a Product Business Plan

Optimize Product Investments

- Make product development capacity tradeoff decisions
- Create a Strategic Product Roadmap

Optimize a Product Release

- Make feature set implementation tradeoff
decisions
- Create a Product Release Plan

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Tier 3 – Business Optimization Each of these three options provides a distinctive path for a
company’s Product Management function. What they hold
Here, in addition to making the decisions enumerated in in common is that once people have a clear understanding
Tiers 1 and 2, product managers decide how to optimize of decisions their product managers should be making, the
the business and market performance of a product or company ends up with faster decision-making and higher
an entire product line. This is sometimes referred to as quality decisions.
“Strong-Form Product Management” or “Heavyweight
Product Management.” That’s because the product
manager is responsible for the financial and market

Once people have a clear

outcomes of the product as well as for its long-term value
to the business. Unlike product managers operating in

understanding of decisions their product

Tier 1 and Tier 2, Tier 3 managers have cross-functional
decision-rights. They’re required to make, and then
to align, difficult cross-functional tradeoffs involving
the full range of product-related business decisions. managers should be making, the
Among them: marketing strategy, target segments,
pricing, distribution, services, development, suppliers,
company ends up with faster decision
partnerships, competitive positioning, and customer value
propositions. Along with these decision-rights, product
making and higher quality decisions.
managers are authorized to bring everyone together so
they can move quickly to realize market opportunities
while staying ahead of competitors. They become their
companies’ chief integrators, champions and General
Managers for the product’s business. Tier 3 product
managers carry significant corporate responsibility and
require keen business acumen, an entrepreneurial
mindset, and skillful management of stakeholders.

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STEP 5
Establish Where Product Managers Should Report
That’s a question I’m often asked by CEOs and it’s hotly that strategy’s execution. That’s the guiding principle for
debated by business bloggers as well as by product determining where product managers report. And the
managers themselves. It’s also an important question answer could be different for every company.
because the answer can determine whether a company’s
Product Management function will ever be implemented Product Management is designed to produce decisions
effectively. And that, in turn, has a lot to do with the that support the company’s business strategy and, in
product’s ultimate success. Bad things can happen if accordance with its opportunity posture, its engineering
you make the wrong choice: your product will suffer from resource allocation and its decision rights. However, that
uncoordinated decisions. Information flow will be crippled. can involve thousands of decisions. No single person, and
Accountability will be lacking. And decision-making can certainly no individual product manager, can optimize all of
slow to a crawl. them. If they tried, they’ll become a major bottleneck. So
instead, product managers need to focus on those issues
That said, however, there is no ‘single best place’ for which are central to implementing the company’s strategy
product managers to report, at least not one that works for – new product development, market penetration, market
every company. But that hasn’t kept people from trying. entry, etc. Wherever that focus falls will determine where
Over the past 10 years or so, a number of B2B companies the product manager should report. Over time, however, as
have decided that their product managers should report a company’s strategy changes, so could the best place for
to the CEO. That works for some companies, but it is a its product managers to report.
misfit for others. That’s because the most fundamental
principle, which applies to every company, is that the Let me give you a few examples:
best organizational structure is the one that enables its
people to work most efficiently, in line with their company’s • The primary strategy of one mid-size healthcare
distinctive strategy, while ensuring proper oversight of technology company was to grow by penetrating its
22
 existing target markets more deeply. That required • A major strategic initiative for a large manufacturing
making finely-tuned changes to its product design, company involved commercializing a novel material
pricing, promotion, selling and positioning for more technology it had developed. It was a classic case
nuanced segments of their market. The Chief of finding a problem for which their technology could
Marketing Officer had management oversight of the be a solution. To make sure its search for market
strategy. The product manager, who reported to the applications took full advantage of the technology’s
CMO, was tasked with integrating and optimizing these unique capabilities, the product manager reported
commercial decisions. to the VP of corporate R&D. Later, after a few
initial customers validated the technology’s product
• The growth strategy for a well-established software application, the product manager began reporting
company involved investing heavily in developing new instead to the GM of the appropriate business unit,
product lines, including several directed toward new where he was given ownership for growing the
markets. The CEO retained management oversight product’s business.
of this initiative. A new Vice President of Product
Management was hired, reporting to the CEO. She • The CEO of an early-stage professional services
expanded her team of product managers and led company wanted to grow her business by turning its
initiatives to build up the organization’s Product technology, which had initially been developed for
Management function. internal use, into a Software-as-a-Service offering.
The CEO herself provided management oversight.
She hired a VP of Products to report to her. That VP
was charged with developing the product roadmap,
making development resource investment decisions,
There is no ‘single best place’ for managing its implementation and making sure each
product release met customer requirements.
product managers to report, at least not
one that works for every company.
• The two-pronged growth strategy of a major global
equipment maker was to boost the market share and
profit margins of its high-end products in industrialized
countries while introducing new, low-end products into

23
 emerging markets. A VP of Products was hired and
given management oversight of the strategy. Product
managers reported to that VP. They were charged with
managing the revenue growth and profit margins of
their product lines and with introducing new products.

In each case, the product managers played a key role

in optimizing key elements of their companies’ strategy.
To determine where your own product managers should
report, ask yourself: What is my business strategy? Where
does management oversight need to be strongest? Which
executive is accountable for that oversight? What should
the product manager’s primary role be in executing that
strategy?

Product managers need to

focus on those issues which
are central to implementing the
company’s strategy.

24
STEP 6
Decide Who Does What
One mistake companies frequently make in starting up a Since no single recipe for Product Management can be
Product Management function – no matter what industry applied effectively to every company, it’s not unusual to
they’re in – is failing to make Product Management’s roles see CEOs make several attempts to define that function
and responsibilities clear. That lack of clarity can create appropriately. However success requires leadership. You
confusion, waste money, demoralize employees, and do not want to create a situation where the product team
undermine the trust needed for an organization to function has to improvise its own role. The team needs you to be
and for its products to succeed. decisive and take the lead. But you can save yourself a lot
of angst by doing some of the work upfront.
This is partly the result of authentic variations in the ways
product managers’ jobs are defined. People’s expectations Here are a few cautionary tales about companies that
of the role of product managers typically form around their failed to do so:
experience with a previous employer, or from what they’ve
learned about how someone else does it. The Frustrated Engineers
But every company is different, so there’s a better In one early-stage software company, the Engineering
way of thinking about it. Instead of looking outward for VP pushed the CEO/founder to hire a product manager
models, the defining of Product Management’s roles because the CEO would constantly change the product
and responsibilities should start with your company’s requirements, increasing development costs, reducing
own unique strategy. And it shouldn’t just focus on the productivity, and hurting the product quality that the VP’s
individual product manager’s job; it has to extend to the team was delivering. He wanted a product manager
entire product team, as well as to the executives, including to stabilize the requirements before his developers’
you, the CEO. That’s because when Product Management work began in earnest. Nevertheless, the CEO told the
is introduced, it changes everyone else’s roles and company’s talent recruiter to find a seasoned product
responsibilities – including yours.
25
manager whose main job would be to
get his new product idea to market,
not to fix its requirements. Even
though the person they ultimately
When Product Management is
hired had the skills to do both, the
new product manager’s expectations
introduced, it changes everyone else’s roles
were shaped by the CEO, so that’s and responsibilities – including the CEO’s
where she focused her efforts. As
a result, the problem of constantly
shifting requirements was left
unresolved, leaving the Engineering What the product manager didn’t priorities. When the company’s
VP and his team frustrated. know was that the marketing/sales Engineering VP convinced the CEO
managers were already developing to hire a product manager, he did so
You’re Stealing My Job! such a plan and felt as if the product in the hope that the practice of saying
The innovations group of a well- manager was trying to take over their “yes” to every customer request
established device maker was jobs. It took the product manager, would stop. But the newly hired
planning to develop a new product, the marketing managers, and senior product manager met stiff resistance
so it hired a product manager to take management a lot of time and energy from the VP of Sales, so the practice
ownership of its strategy and P&L. to straighten out their roles as a result never changed. In the end, the CEO
However, no one had bothered to tell of these misunderstandings. was persuaded that his new product
the marketing/sales division, which managers were preventing the
was housed in a separate business
The Company that Couldn’t Say ‘No’ company from satisfying its clients as
unit and which had, until that point, they had done for many years. Once
Whenever a customer of a small data the product managers realized that
always been accountable for the analytics solutions company would
company’s product revenue. So they couldn’t actually manage their
ask one of the firm’s sales reps to products, they became frustrated and
when the product manager began create a new software feature, the rep
discussing a go-to-market strategy, not long afterward, left the company
and lead engineer would reflexively with only wasted time, money and ill
the division’s managers were puzzled, commit to developing it without
defensive, even confrontational. will to show for their efforts.
considering the broader market’s
26
The CEO Who Wouldn’t Let Go By ‘role’ I mean a primary set of tasks that will be
assumed by the person assigned to it. To characterize
When a senior product manager joined a rapidly growing those tasks, think in terms of the “hats available to wear.”
industrial automation company, he was excited to become The ones I’ve found most useful are listed in Figure
the leader of their game-changing product. He believed he 5. These are the essential ‘hats’ someone needs to
could set and maintain credible priorities for development wear, along with the primary tasks that individual would
because engineers require a steady focus in order to assume. You might identify other necessary roles, too,
execute effectively; jerking them around only undermines depending upon your company’s particular situation.
execution. Even so, the executive team continued to set
development priorities for even the most minute product Also, keep in mind that the assignment of hats varies
features. Beyond that, the CEO would fly-in on occasion with the decision rights assigned to the product manager.
and re-set the developers’ priorities. The product manager So, for example, if a product manager has decision rights
became seen as just a ‘pass-thru’ agent for the executives, at Tier 3, Business Optimization, they would wear the
effectively stifling his ability to lead the product team. “Business Manager,” “Product Planner” and “Product
Definer” hats. If that product manager had only Tier 1
As a result, the executives didn’t gain any free time, decision rights, Release Optimization, they would wear
and the product manager didn’t add real value to the the “Product Definer” hat.
process. Particularly in light of the product manager’s high
compensation, it became obvious that his position was a
waste of money and talent, so they agreed to part ways.

The Hat Trick

Okay, so how can you keep these and other costly

situations from happening to your business? First, avoid
job titles; titles are a confusing mess, including all product
managers and related jobs. Start by identifying the roles
needed to succeed with your products and Product
Management function.
27
 Business Manager Product Planner Product Definer Experience Developer Builder

Make the right business Set the right strategic Decide the right product Optimize the user Create a solid product
and marketing-mix direction for the release to be built experience
decisions for the product product’s future Associated Job Titles:
Associated Job Titles: Associated Job Titles:
Associated Job Titles: Associated Job Titles: • Engineer
• Product Manager • UX Designer • Product Developer
• CEO • CEO • Technical Product • UI Designer
• General Manager • VP Products Manager • Product Designer
• VP Products • VP Product • Product Owner • Experience Designer
• VP Product Management • Business Analyst
Management • Head of Products
• Director Product • Director Product
Management Management
• Product Manager • Product Manager
• Upstream Marketing
Manager
• Strategic Marketing
Manager
Figure 5. Product Management Hats
28
 Customer Creator Value Captor Facilitator Process Master Human Capital

Market and sell the Make sure the price Get the product Put the right processes, Enable product talent
product right is right delivered as expected practices and to succeed
technologies into place
Associated Job Titles: Associated Job Titles: Associated Job Titles: Associated Job Titles:
Associated Job Titles:
• Product Marketing • Pricing Manager • Project Manager • VP Products
Manager • Product Manager • Program Manager • VP Products • VP Product
• Downstream • VP Products • Scrum Master • VP Product Management
Marketing Manager • Product Management • Head of Products
• Marketing Manager Management • Head of Products • Director of Product
• Market Analyst • VP Marketing • Director of Product Management
• VP Marketing • CEO Management
• CMO • Process Manager
• VP Sales
• Sales Manager

In many organizations, an individual might wear more than one hat. And in others, a single hat is sometimes
worn by more than one person, regardless of their job titles.
29
Getting There from Here

In essence, there are three steps to getting Product

Management jobs right. Each has clarity and
transparency at its core:

1. Determine which responsibilities should go with

each role. Which decisions will the individual(s) in
that role be accountable for? Which deliverables?
Which activities? Create job descriptions
accordingly.

2. Assign job titles to those roles. Which roles belong

to just one job? Which jobs will share a role?
Choose whatever titles work for your organization;
there are no industry standards. Just make sure
every role is filled.

3. Match individual candidates to those jobs and

make sure their roles and responsibilities are
understood throughout the product organization.

30
STEP 7
Select Your Processes
For any business function to succeed, you need a clear
Making Accountability Visible
set of processes that everyone in the organization
When a process and those responsible for its tasks are
understands. By process, I mean a defined set of principles,
known, should the ball get dropped, its source becomes
activities, practices and tools that can ultimately lead to
obvious.
desired outcomes. For a company’s Product Management
function, that outcome is maximizing the value created Coordinating the Work of Different Groups
over a product’s lifecycle for its customers, investors and When people know exactly who depends on their work,
employees. When these processes are well understood their efforts become more focused and timely. They tend to
and consistently applied, there are a number of benefits: stay in touch with one another and become more cohesive.
Helping to Manage Expectations Aligning Execution with Strategy
When a process is well-defined, expectations are clearer The process choices a company makes should be
and people make better work decisions. So, for example, consistent with its business strategy. So, for example,
people who jump at requests from individual customers if a company chooses a Reaction posture, a process
can leverage clearly understood processes to minimize will be needed to respond effectively to customer
external market pressures that could otherwise disrupt requests. If its strategy depends upon introducing new
their work focus. products to unfamiliar markets, it will need a process for
experimentation and validation of ideas.
Focusing Creativity
Processes set the limits and define a field of play, helping
However, companies can go wrong in selecting processes.
to focus efforts. Once that field is set, people can focus on
Here are some of the most common ways of going astray
“playing.” For example, the communication constraint of
that I’ve encountered:
Twitter’s 140-character limit on messages forces people to
focus, often in creative ways.
31
 all goes through the same person, typically a product
Using One Method for All Types of Product Development
manager, using the same process for every step. That
One size doesn’t fit all. But companies frequently use a
creates a bottleneck with dissatisfaction all around. The
single method, like Stage-Gate, Phase Review, Agile,
design of the Product Management function needs to
Lean Startup, Waterfall, or others for every product
factor the process, the facilitator and the goals of each
situation.The problem is that none of these methods are
type of work upfront.
designed for the full spectrum of product development
work which can range from incremental enhancements on Processes Aren’t Designed to Satisfy the Customer
existing products to developing entirely new products with Instead of staying focused on the needs of the paying
new technologies for unfamiliar markets. I’ve seen one customers, a lot of companies turn the telescope around
established company try to use the Lean Startup method and cast their gaze internally. I’ve seen lots of process
– which was created for situations of extreme uncertainty – flowcharts that show how work will get done, who does
to improve their existing products – products they’ve been reviews, who handles exceptions and rejections, who
selling to the same market for years. Applying the wrong schedules meetings, and so on. But they’ve missed
methodology leads to bad experiences when implementing the most important thing: the customer’s expectations
Product Management. and needs. What should that customer expect to get?
When? How? Instead, the company tries to answer these
Using One Process and Facilitator for Different Types questions after designing their process, based on what
of Product Work that process can yield. But those questions should be
Product work typically involves a number of separate
operations: building a new product, enhancing the product,
developing customer requested features, maintaining the
product, hot-fixing defects, and so on. Each operation is
So unless the company’s executives
different. For instance: How does work get initiated? When
should customers receive a response? Who is responsible
are prepared to walk the walk, they
for it? How does work get done? What information needs
to be shared? How do priorities get set? How is the work
shouldn’t bother implementing Product
validated? How does it get released to customers? What
are the associated risks and rewards? Too often, this
Management in the first place.
32
the starting point for the process design. So if there’s of product managers, creating rework and inefficiencies.
a problem with a product, or if a company is acting on But over the last few years, several new software products
individual customer’s request for new features, the designed for product managers have come to market. They
customer needs to know you’re working on it.The process include Accompa, Aha!, OneDesk, ProdPad, ProductPlan,
should be designed to deliver onthose expectations. ProdThink, REQQS, and WizeLine. They join incumbents
including Accept360, Sopheon, and VersionOne. Is one
Detached Executives of them for you? SiriusDecisions researched these
Processes are key to strategy execution, so the new tools and published a thoughtful report called “The
organization’s key executives need to be centrally involved 2015 SiriusDecisions Field Guide to Product Planning,
in their implementation. They don’t need to design all the Prioritization and Roadmapping Applications.” A summary of
process details, but they need to fill a key leadership role. their report is available at www.SiriusDecisions.com
That involves setting goals, expectations, and constraints.
It means making sure the right methods and tools are What’s the Right Process for You?
selected, that excessive process is avoided and the It normally takes several different processes to cover
processes are used effectively. But I’ve seen CEOs and the full scope of an organization’s Product Management
other executives circumvent their own processes to push function. You need to have confidence that the right ones
a new product idea or respond to a favored customer’s are in place to execute your own company’s strategy.
request. The outcome typically has a negative effect on Some processes are designed to produce a single product
the work and morale of everyone else. So unless the release; others apply to managing product operations
company’s executives are prepared to walk the walk, they overall. Used together, they form a holistic system for
shouldn’t bother implementing Product Management in the developing product innovations that create value while
first place. managing the company’s investments.

Inadequate Tools Figure 6 shows a list of processes that companies

Spreadsheets, Word documents and PowerPoint slides need during the early stages of Product Management
are commonly used by product managers. Other software implementation. They’re organized into two groups:
tools have been used as well, but most are specifically Strategy Management and Product Operations
designed for bug tracking, engineering tasks, project Management.
management, product design, or customer relationship
management. As a result, they mostly fail to meet the needs
33
 Figure 6: Processes for Managing Products
Strategy Management

Strategic Product This process creates and adjusts a strategic product roadmap. It defines how the company’s product lines will
Roadmapping evolve over the duration of its business plan. It includes the introduction of new products, new capabilities, entry
into new markets, serving new user personas, new applications and new usage occasions.
Strategic Review Periodic executive team meetings to keep team focused on the strategy and goals. It includes reviewing
progress and making appropriate adjustments to: Strategic product roadmap, Engineering resource allocations,
and Product Management function implementation. These review meetings are typically quarterly.
Product Operations Management

Backlog Management This process captures, evaluates and prioritizes ideas, customer feature requests, and market opportunities. It
results in a pipeline of value opportunities.

Product Release Planning This activity selects specific items from the backlog to include in the next product release.

Discovery This process involves developing a deep understanding of a customer’s current and future needs, motivations
and buying preferences. It includes the product’s users, decision makers, and decision influencers.

Market-Driven Product For companies using a Persistence posture, this process involves a cross-functional team moving new product
Development and Release and feature ideas to market. It includes design, development, testing and release. Gate reviews, learning
validations and milestones can all be used to help manage risks.

Customer-Driven Product For companies that employ a Reaction posture or use a Make-to-order fulfillment process, this process involves
Development and Release a cross-functional team moving a specific customer’s product or feature request from idea to release.

Product Launch This process prepares an organization and its partners to accelerate a product’s sales.

Sustaining Engineering This process involves all the technical work after a product is released to ensure its continued operation, defect
resolution, and maintenance.

34
STEP 8
Identify Great Product Manager Attributes
What qualities do great product managers need? Product Management
Everyone has a different answer. But for your own B2B
company, determining which attributes really matter starts Product managers are expected to have the skills to carry
with deciding the product manager’s role, described earlier. out a variety of tasks. They could include defining the
Some of the resulting qualities will be similar to those of customer problem, setting the product strategy, creating a
product managers in other companies. But there will likely product roadmap, writing product requirements, creating
be important differences, as well. sales tools, and so on. But, not every product manager
is required to do all of these tasks; that’s determined by
Effective product managers are characterized by the the decision-rights and hats they’ve been assigned. So,
qualities shown in Figure 7, the Product Manager for example, do you need someone with more strategic,
Competency Framework. Because there are so many analytical product management abilities? More tactical,
areas in which product managers need to be competent, it downstream expertise? Does the focus need to be on skills
can be a real challenge to fill the job. that enable sales and marketing? Or ones that enable
product development and release? Which skills - managing
existing products or activating new products – are really
Essential Expertise most important?
Every product manager needs a core set of skills. Each
Market
skill is typically honed over the course of a career, but
together they form the building blocks for everything the
Understanding customer problems is at the core of any
product manager will be required to do.
product managers’ expertise. That includes knowing
what the customer is trying to do, who on the customer’s
staff is trying to do it, why they do it, and how they do it
35
today. In what context it is done? How do they
measure success? What are their problems or Figure 7: Product Manager Competency
Framework
issues? Where are the best opportunities to
create value and improve experience? Which
of those are most important to the customer?
Grounded in that understanding, a product
manager can effectively lead the product team.

Acquiring that sort of expertise usually

requires spending time with customers in
their own environment. That’s why a number
of product managers formerly held the jobs
their customers hold today. For example, one
embedded software engineer I know became
a successful product manager for a company
that makes the software development tools
used by his fellow engineers. Another product
manager – this time for pharmacy software
products – started out her own career as a
pharmacist. And a coal mine manager I know
became a great product manager for a mining
equipment product line.

Beyond that, a product manager should

understand customers’ perceptions of various
alternatives, the dynamics of the market, the
value chain, and the customer’s ecosystem.

36
Product Technology to see the business implications of changes in business
drivers, strategies and market events. They need to
Product managers have to really understand their product understand how different decisions impact the financial
and its features – how and why it works, as well as the outcomes of the product and their company’s business.
ways customers use it to solve problems. They need to And they need to base their recommendations and
know how it’s built and how it’s delivered. They also need decisions on sound business criteria.
to see potential customer applications for even newer
technologies. Although a product manager doesn’t actually Relationship Management
have to build the product, they have to appreciate both
the long- and short-term technical tradeoffs involving that The value that product managers create derives from
product as well as the associated impacts on both their who they know and what they know about them. A CEO
customers and their own organization. Choices like that needs product managers who can form partnerships and
come up all the time in product development. A product effectively manage them. When a product manager fails, it
manager can’t just accept an answer from Engineering can usually be traced to poorly formed or badly maintained
without probing into all the options available. When relationships.
they do, they just might discover a misunderstanding
on Engineering’s part, too. That’s why so many new Product managers need to build strong relationships up,
product managers are recruited from the engineering and down, across and outside the organization. The CEO
technology ranks. is in the best position to help make this happen. Those
relationships are essential since product managers never
Business Acumen have direct authority over sales, engineering, operations,
finance, manufacturing, service or other company
Product managers have to have business smarts. functions. When his or her relationships are well-managed,
They’re counted on to make good judgments in business a product manager’s influence is greatest, conflicts are
situations that lead to good results. The greater the product resolved, and teams cohere. Particularly when changes
manager’s decision-rights, the better their business are needed, whether to R&D priorities, sales models,
acumen has to be. At the Tier 3 level – the highest level of demand creation strategies, pricing or services, product
product manager decision-rights – that business acumen managers with Tier 3 decision-rights find these relationship
must be extremely sharp. They need to see the big picture skills especially critical.
and the details from different points of view. They need
37
Personal Traits and constructive feedback to become proficient at it in
business. Articulate communicators are highly prized in
Not everyone is cut out to be a product manager. A product management.
successful product manager has certain character
attributes. Some can be taught and learned, others may be Focus
hard-wired. Here are the most important ones:
Opportunities, issues, ideas and requests for new product
Respect features come up all the time. But resources are always
scarce. So the savings that can result from a decision
Respect is earned over time, and making effective cross- not to implement an unnecessary feature can be huge.
functional decisions requires it. However, gaining respect In Product Management, less is more. The rewards
also requires showing genuine respect to others. go to companies with product managers who have the
conviction, discipline, guts, and CEO support to say ‘no’
Trust when they need to.

Product managers need to be trusted by their associates Holistic Thinking

to do the right thing. They need to be seen as reliable
sources of facts and strength. The reverse also applies; Product success is like a puzzle; the product manager has
they need to trust their colleagues to be effective in their to know which pieces are needed, how they fit together,
own jobs. If a product manager isn’t trusted to be truthful, and to act when others are either missing or fit poorly.
his or her associates will be less inclined to share potential
issues about the product. Problem Solving

Communication There is never a shortage of problems involving products.

Product managers need to make sure those problems are
Almost every aspect of a product manager’s job depends correctly framed, diagnosed, and conveyed. By bringing
on influence rather than authority. Exchanging knowledge together the right people, the right information and the right
and insight with one’s associates requires effective criteria, they make it possible for the team to succeed.
speaking, writing and listening skills. Even though we’ve Great product managers help others make sense out of
been communicating all our lives, it takes years of practice complexity.
38
Empathy Achievement

The ability to put yourself into Most people working They’re driven by results – the result
of reaching a vision, of meeting a
someone else’s shoes is essential. It
helps to build relationships and trust. on products are goal, of making a real difference. It
may not be their own vision, but they
It helps a product manager to gain
valuable insights while learning to
self-motivated, so the have to embrace it and contribute to
it. When they do, their ‘whatever it
understand the needs, problems and
challenges of both customers and
key is not to takes’ attitude will flourish. However,

de-motivate them.
associates. if they don’t believe it’s realistic
or worthwhile anymore, they lose
Adaptability motivation.

Change is constant. Sometimes Passion

essential sources of a product
business goals and market manager’s leadership. However,
circumstances change. One’s It’s a difficult job. It requires lots
most people working on products
own understanding of the market, of energy. To succeed, product
are self-motivated, so the key is
customer, and competition can also managers must love the job, the
not to de-motivate them. That can
change. Product managers need to product and its potential impact.
occur when roadblocks constrain
recognize the implications of change Some will have that passion for the
their performance or when they don’t
and to act quickly when it’s required. product when they start the job, other
have the product manager’s support.
times it takes a while for a product
When the product manager leads,
Leadership manager to acquire it. Once they
others will follow.
grasp the magnitude of what’s really
Lots of people get involved in the Motivation possible, their passion kicks in.
activities that lead to product success.
A product manager’s job is to bring Successful product managers are
them together. Effectively sharing typically motivated by three factors:
a vision, a strategy and goals are
39
Curiosity

A product manager’s success involves gaining insights

Avoiding the Domain
others don’t have, and then acting on them. These insights
come from a quest to understand. Why? Why not? What Expertise Trap
if? Why do you believe we can’t? More than anything, he
or she has to be curious about the possibilities. The ideal product manager would be someone strong on
each of these traits, motivations and areas of expertise.
But, like unicorns, there aren’t too many of them around.
However, CEOs tend to place too much emphasis on the
importance of “domain expertise” – experience within their
own markets and customers. That’s typically a sign of
wanting a quick fix to problems. The fact is that the best
Someone with a strong ROI in a product manager materializes over a longer term.

Product Management
Someone with a strong Product Management background
can acquire market/customer expertise much faster

background can acquire market/

than a person with strong domain expertise can acquire
Product Management expertise. It’s not even close. A
customer expertise much faster skilled product manager knows what he or she needs to
get started. They can tap into the domain expertise that
than a person with strong domain already exists inside your organization. But the reverse
isn’t true: there’s no expertise in Product Management
expertise can acquire already on hand for a domain expert to acquire.

Product Management
expertise. It’s not even close.

40
STEP 9
Installing Your Product Management Function
Installing a successful Product Management function, as implementation of Product Management in his or her
we’ve emphasized throughout, involves a lot more than new organization. They’re told “Tell us what you need.
simply hiring a good product manager. But let’s say you’ve You know best what’s needed to be effective.” Problem
already made the strategic decisions we’ve discussed and is, the function of Product Management cuts across the
that you’re ready to focus on implementation. That will organization, and not all aspects of that function report
involve making a series of tactical decisions, each of which to the product manager. In fact in many cases, nobody
will require change in various areas of your operation. actually reports to the product manager. And, as with any
That can be hard. And if your business has achieved change, there are people who will be slow to adapt and
good results in the past, changing it can be even harder. others who resist change altogether, keeping on doing
So determined leadership is essential to making Product things the way they always have. This can even include
Management an effective and permanent part of your people on the leadership team. Management guru Peter
business. Drucker once said that the leaders he met didn’t need to
learn what to do; they needed to learn what to stop doing.
Among the key questions which will need to be answered: He’s right. It is very difficult to change an organization,
Who will lead those changes? How and when will even for a CEO. So don’t leave it in the hands of a product
these decisions get implemented? How will they be manager; the CEO needs to lead the change.
communicated? What’s required for the changes to
succeed and endure? And how will we know if we’re The entire leadership team actually plays a critical role.
staying on track? Their buy-in is vital for success. Yet for many companies
who are implementing Product Management for the first-
Don’t just leave Product Management implementation time, this buy-in is either missing or fails to be sustained
to a product manager. Here’s a scenario for failure: A long enough to succeed. Senior management must be
newly appointed product manager is directed to lead the seen as sponsoring the change both by developing an
41
implementation plan and actively helping to carry it out.
All your key leaders – marketing, sales, services, design,
engineering, and operations, as well as the CEO and the
head of product management – need to be part of this Don’t just leave Product Management
coalition. In your own case, you may find that other people
who have influence on managing products should be implementation to a product manager.
included, too. These might include a chief scientist, pricing
managers, and project managers. Your job as CEO is to
get the leadership team on board and fully committed.
changes to absorb, issues to resolve, and adjustments
Implementation Planning to make. So don’t try to achieve too much too soon. I’ve
found that a phased-in approach which delivers short-term
Product Management, like any major change, needs to
wins along the way works best.
be planned and directed – even when the product teams
themselves are eager to see change. That’s because when
Implementation can be broken down into five phases:
changes are made, responsibilities can change, becoming
Prepare the Organization, Introduce Product Management,
ambiguous and confusing. Workloads can become
Install Tactical Capability, Install Strategic Capability, and
stressful. And inconsistencies in process adoption can
Reinforce Product Management. Each phase builds on
become sources of frustration. Effective implementation
the work of the previous phases. Figure 8 is a conceptual
requires leadership oversight, frequent communications
diagram of that sequence. Following it can help build
and obstacle removal, as well as training and coaching.
momentum and confidence, while retaining the needed
But, if the implementation is managed well, you’ll get a
focus and attention.
solid return on your product management investment.
Also, the sequence of Phases 3 and 4 can be reversed,
However, just as Rome wasn’t built in a day, neither can a
particularly for companies who are focusing their efforts
Product Management function be implemented overnight.
on creating new product lines and those adding product
There are processes and practices that need to be put
managers at the Tier 2 or Tier 3 levels.
into place. There is terminology and know-how to master.
There are behaviors to adopt, role and responsibility

42
Figure 8: Product Management Implementation Framework

43
Phase 1 – Prepare the Organization Phase 2 – Introduce Product Phase 3 – Install Tactical Capability
Management
The first step is to pave the way for During this phase, the processes,
the organization to move forward. Once a product manager is on board, practices and tools needed for
This includes, in addition to making people in the organization need a improving the company’s current
the key Product Management common understanding of what the products are put into place and applied.
decisions previously discussed: CEO wants the company’s Product They include:
creating an implementation plan; Management function to become.
formulating a communications plan; Share the vision and implementation • Managing the backlog of product
building understanding across plan with employees as well as with improvement requests
the organization of the vision key partners. The organization • Planning releases for future
and business need for Product needs to learn the outlines of its own product improvements
Management, as well as recruiting Product Management function. • Using market data to prioritize
product managers from within and product enhancements
outside the organization. This is also when new reporting • Planning for development and
relationships are implemented and release of customer-specific
Some people have tried to shortcut cross-functional teams are formed. priorities
this phase to achieve greater speed. New roles and responsibilities are • Securing engineering engage
But that speed is just an illusion. communicated. In addition, it’s when ment in maintenance and support
Instead, you’ll get poor results faster the new product manager learns
and face an inevitable re-do sooner. What results from implementing
the product, technology, market and
Planning shows you’re serious about these processes is that everybody’s
business of the product, gathers data,
investing in Product Management. responsibilities become clearer. This
and begins building key relationships.
It helps to develop buy-in, too. is also the point at which you grant the
Those relationships and that business
Thoughtful planning also provides decision-rights which were determined
knowledge will become essential
a basis for reviewing progress and earlier. Job descriptions can be updated
sources of the product manager’s
making adjustments. accordingly. Front-line individuals, as
credibility and capacity to lead in the
well as the leadership team, receive
future.
training in how to use those processes.
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This is also a time when new product managers need Phase 4 – Install Strategic Capability
to accelerate their learning about the product and its
customers, as well as developing relationships with your During Phase 3, you put the tactical capability for
own engineers and product designers. I’ve found the best incrementally improving current products into place.
ways are for the manager to become immersed developing Now you can turn to the longer-term strategic value of
product requirements leading to a few new features, your Product Management function. In this phase, the
to work on resolving an issue with the product, and to approaches for creating and commercializing new products
develop plans for the next product release. Those details – even entirely new product lines – are created and
will lead to a deeper understanding of the product – how deployed. Among them:
it works, how it was built, what its limitations are, and why.
• Product Roadmapping to decide which products to
Product managers also need to get in front of customers to
introduce for which markets and when
learn how, when and why they use the product, the value
• Discovering new customer insights and product
they get from it, and any challenges they face in using it.
opportunities in unfamiliar spaces
Visiting five or six different customers can provide a great
• Product Development, testing, and introduction driven
start.
by market demand
• Product Launch strategies for accelerating the sales
Don’t depend too heavily on your own internal customer
of a new product
experts – sales, professional services, even your
executive team – to relay this knowledge to the product As these processes are defined, new responsibilities will
manager. These sources rarely have all the detail and surface and will need to be assigned. Additional decision-
perspective that product managers and product teams rights may be granted and job descriptions updated
depend on. Instead, when they don’t recognize the need accordingly.
for it, they tend to filter out information or even miss it
altogether. But without direct customer knowledge, the In the previous phase, a product manager was focused
product manager’s ability to lead will be greatly diminished on users. In this phase, product managers can cultivate
and the return on your investment in the Product a broader strategic view of the product’s business and
Management function will be significantly delayed. strengthen their relationships with leaders, both inside
and outside your organization. That can be accomplished
in ways that include leading the product roadmapping
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process, leading a customer discovery project, meeting Set the Timing
with customer decision-makers and industry influencers, or
developing a business plan for a new product. While it’s important to push ahead with resolve, it’s also
important to understand that a 90-Day Plan for putting
Phase 5 – Reinforce Product Management Product Management into place just isn’t realistic for most
organizations. You can’t just copy someone else’s Product
The final phase is seeing whether the desired changes Management function, make a few tweaks, and expect a
have actually taken hold, to identify successes, to take satisfactory result. People’s behavior and know-how have
corrective actions, and to identify opportunities for to change, and that takes time.
improvement. If people aren’t adopting the changes and
instead continue doing things as before, corrective actions I’ve found that companies can usually go through phases
should be taken to reinforce the desired change. The one through five in 30, 60, 90, 180 and 270 days,
leadership team needs to support that reinforcement. respectively. Each phase builds on the foundation created
Then, as wins occur, leaders should recognize and by previous phases. Short-term wins build momentum and
celebrate successes in order to maintain the momentum. confidence. Without reinforcement, it’s awfully easy for
people to give up and go back to the way they did things
This does not need to wait until all the previous phases before. If your company has some of the elements in place
are done; reinforcement can and should occur as each already, you may be able to go a bit faster. But that’s not
implementation phase takes place. It can be part of the typical.
Strategic Review meetings that we discussed earlier in the
‘Select Your Processes’ section. Additionally, one-on-one When you consider the time it takes to build an effective
retrospectives with key stakeholders can help determine Product Management function, you can understand why
whether your goals have been achieved, what’s working, it’s more important for a new product manager to have
what isn’t, and what can be done better. good Product Management skills at the outset than
product-specific market expertise; market knowledge can
be acquired as you’re building up the function; Product
Management knowledge cannot.

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 prosper. Standing still in a competitive marketplace is a
Tips for Success
certain formula for failure.
Communicate, communicate, communicate. For a
Recognize short-term wins. Without reinforcement,
Product Management function to succeed, you have to
people tend to give up and go back to their old ways.
convey an understanding of why it’s needed and then
Celebrating small victories also helps to keep the urgency
cultivate a desire to adopt it. One rule of thumb is that it
level up. These wins could include such things as the
takes people 6 or 7 exposures to a message before its
implementation of a new process, the release of a new
meaning sinks in. Just one meeting or one e-mail isn’t
product, or the introduction of an improved feature using
enough. People need to see, hear, read and absorb it
your new processes.
many times over. Communication builds trust, trust builds
confidence, confidence builds success.
Stick to it. There will bumps in the road; count on it. But
stick to your plan through the bumps as well as when
Communicate consistent messages. Your executive
things seem to be going nicely. Don’t declare victory after
team needs to send a consistent message to achieve good
your first success; you need to see the desired behavior
results. They also need to personally exemplify the desired
repeated consistently before hanging up the Mission
behaviors. That’s how product teams see what’s expected
Accomplished banner.
and know that it’s for real.
Make sure product managers are able to have the
Communicate the vision of the Product Management
conversations they need with the right people.
function. Let’s say you’ve already made the decisions
Sometimes people don’t see the value in what product
and built an implementation plan. Those form the bases
managers do, so they aren’t responsive to them. When
for a vision of the future and the path for getting you
the product manager runs into roadblocks and resistance,
there. Connect the changes you’ve just identified to new
use your influence to help. Facilitate their involvement in
growth possibilities; highlight the current strengths of your
business, strategy and product-technology meetings with
organization, its people and its culture.
other executives as well as with department managers.
Establish sense of urgency. People need to be
motivated; they need to understand that a company has to
constantly move forward and improve if it is to survive and
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 else is visiting their customers, and they complain. As a
Product managers must be able to result, some CEOs wonder whether a visit by a product
manager is really a good idea. Others express concerns
meet and talk with customers, about sharing customer or sales data. Even so, product
managers must be able to meet and talk with customers,
and not just as a tag-along on sales and not just as a tag-along on sales calls. That’s a

calls. That’s a fundamental,

fundamental, non-negotiable requirement.They need to
take an independent look at the history of the customer,
non-negotiable requirement. at product sales, at usage patterns and at win-loss sales
reports. Without that, they can’t do their job well and you’re
just wasting your money.
Remove obstacles to implementation. Old habits,
Be visibly engaged. Executives need to be committed
disagreements, individual needs, lip service to change,
to and actively engaged in the company’s transition to a
personal comfort zones, and the belief that there should
product management function. Any lack of commitment
always be exceptions, are among the obstacles that
will be seen as a sign that the executive really doesn’t
typically confront new product managers, making it difficult
understand or agree with the need for product management.
or impossible to do the work they’ve been hired to do.
Senior executives need to be role models. Employees
Refuse to accept those blocks; they will simply drag out
need to see their executives doing it the way it should be
implementation, delay the results, and create tension in the
done and enforcing this within their own teams. Too often,
workspace. Instead, remove those obstacles. Push back
I’ve seen CEOs and executives continue to act as they
on Sales and Engineering if they insist on getting what
did before, violating new process that were just created,
they want and doing things their way. Don’t let them short-
and continuing to make the decisions they had hired their
circuit the process or bypass the product manager. Make
product managers to make. That’s the quickest route to
clear who owns the decisions and don’t take back the ones
Product Management failure. If people feel as if the product
you’ve delegated to someone else. Everyone, including the
manager isn’t really making certain decisions, or that the
CEO, needs to use the process and trust it.
product manager is an obstacle, they will go around to
executives who don’t embrace the processes and complain
Help Product Managers get to customers and data.
that the product manager really isn’t able to lead.
It always happens: Sales gets concerned when someone
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STEP 10
Measuring Your Success
You’re home now. You’ve made the tough decisions, Other companies measure success using metrics such as
explained them to everyone, hired a product manager and a product’s revenue, profitability, customer satisfaction, or
put your company’s Product Management function into market share. The logic is that if a Product Management
action. But how can you tell if you’ve really got it right? function were working well, it would be reflected in these
How do you measure your progress? metrics. And besides, most of those findings are readily
available since they are usually tracked anyway. However
Some B2B companies use the product manager’s own it is difficult, if not impossible, to tease out the specific
job performance appraisal as a proxy for the Product impact of a company’s Product Management function
Management function itself. If the product manager is solely from those results. Uncontrollable factors in the
performing well, the reasoning goes, then our Product external environment such as demand disruptions, price
Management function must be working well. But, as we realization, and critical resource supplies, as well as
discussed earlier, there are people from a number of internal issues like unforeseen production problems, staff
departments who participate in the Product Management capacity limits, or individual employee performance can all
function. So evaluating the performance of an individual mask the impact of Product Management. Unfortunately,
product manager isn’t appropriate to evaluate the function you can’t run a control group to compare the results.
– even if you have only one product manager. It can Product Management, like annual business planning
also be misleading. I know some CEOs who used this and strategic planning, is simply too hard to evaluate
approach. They wrongly concluded that their product accurately just from business results. And besides, these
managers were the problem when business results didn’t metrics all look backward. Although that doesn’t stop some
meet expectations. Then they thought they had ‘solved’ companies from using them, it’s generally too late by then
their problem by getting a new product manager, but to identify the most important factors and make timely
their results were still mediocre. corrective decisions.

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 Figure 9: Product Manager Behavioral Indicators

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Problem is, neither of these approaches really evaluates by David Roach, published in the Journal of Research in
the performance of Product Management; they’re either Marketing and Entrepreneurship in 2011 (Vol. 13, No. 1,
evaluating the person or the business. To evaluate the pp. 85-104.) A related study, entitled “High-Performance
Product Management function, you need to look into how Product Management: The Impact of Structure, Process,
the organization makes and carries out product-related Competencies, and Role Definition” by Rajesh Tyagi and
decisions. If you’re doing the right things in the right way Mohanbir Sawhney, identified critical success factors in the
and have the right people in the right roles, you’re most Product Management function. It appeared in the Journal
likely to get the best possible results, even when your of Product Innovation Management in 2010 (27:83-96.)
situation changes. But if you find you’re not getting the
right behaviors, you can drill down to find the root causes Essential Organizational Behavior
and take corrective actions. In my experience, it’s these
behaviors that offer the strongest indication of how Product Okay, so what behavioral indicators should you pay
Management actually affects the product’s business attention to? Which actions should be monitored to
performance. make sure your Product Management implementation
will be a success? And which ones are really essential?
Although there’s not a lot academic research about The essential behaviors are shown in Figure 9. When
Product Management in general, one very good study measured, they can each serve as leading indicators and
has been published on the connection between a Product provide you with actionable information.
Management function and the business results: “The
Impact of product management on SME performance,” This checklist can be used to poll key stakeholders at the
end of each phase of your implementation plan. Each
statement can be rated from “strongly agree” to “strongly
To evaluate the Product Management disagree.” The results will let you know where you’re doing
well and where there are opportunities for improvement.
function, you need to look into how the Then you can identify the underlying causes and decide
on corrective actions. Everyone involved should know
organization makes and carries out the behavior expected of them and understand the

product-related decisions.
organization’s use of these metrics. People need to know
if they’re on track, where adjustments need to be made,
and any corrective actions that have been planned.
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When a company adopts Product Management, it sets out on a voyage of discovery and change. It is not an easy journey,
and the experience is, in many ways, different for every organization. But it is one that others have undertaken before you
– one that experienced business leaders have found leads to better outcomes, improved efficiency, and a more cohesive
workplace. As you consider launching that expedition, take strength in the fact that there are resources available to help
navigate your company’s passage, and that the rewards of embarking on the path to Product Management can be very
substantial.

ABOUT
Jim Berardone

For more than 20 years, Jim Berardone’s work, teaching

and leadership has touched essentially every facet of
B2B technology business from early-stage startups
to established multinationals. Much of that work has
focused on developing and bringing innovations to market
through product development, product management
and customer creation. He has played a major role
in the commercialization of more than a dozen new
www.JimBerardone.com
product lines built on software, robotics, data, content
jb@JimBerardone.com
and Internet technologies for users in markets as varied
www.LinkedIn.com/in/JimBerardone
as manufacturing, distribution, engineering, marketing,
@JimBerardone
publishing and e-commerce. His teaching and coaching
work has included numerous consulting assignments, the
formation of a product managers association, and teaching
appointments at Carnegie Mellon University in Pittsburgh.

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