Product management plays an important role whenever we create something new

Many companies have a designated product manager. However, I like to think of product management as an organizational function rather than a role. I believe it's useful to consider product management as a shared responsibility where a named product manager can be the main person ensuring product management happens. As decisions made within this function can significantly impact the entire company's future and viability in many companies the CEOs and senior leaders are also a big part of the company’s product management even without an actual title of a product leader.

Naturally, the type of the business defines how much product management is actually needed. In cases where we maintain an existing product in a very stable market is, product management may not even be required. In such situations, you might employ technical project managers who ensure that the development work proceeds as planned. Sometimes these people are called “product managers”, which causes a lot of confusion in our industry.

However, when a company is building a new business, the importance of product management should be emphasized. Product management should ensure the viability of the new business, develop and test new business models to optimize value, ensure profitability and make sure the product is built on a technically sustainable basis. 

In this blog post, we aim to shed some light on what kind of product management is needed when building a new product business and how you can identify the level of product management in your company. 

What are the consequences of poor product management?

Although product management's form and responsibilities vary, it always exists when we are building or growing a new product business. You still need to decide on what to build, ergo you have product management. So it's not really a question of whether you have product management, but on what level your product management is, and whether it creates real value for our company.

Poor product management

If the level of product management is poor, there's a risk that the development team ends up wasting time and money while focusing on the wrong things. The time spent on product development will not move the product or the business in the right direction, and in the worst case, the value of the investments turns negative.

Average product management

When a company's product management is on an average level, development is based mostly on assumptions. Some of the guesses made may be correct, but unfortunately, many of them are not. These decisions might cause the business to move roughly in the right direction but much slower than desired.

For example, it may be that the MVP of a product is far too broad compared to what would have been required to collect the necessary data about the user experience. Often in these cases, unnecessary features end up in the final product, and unfortunately, each unnecessary feature costs and reduce the value of other features. 

With mediocre product management, it is entirely possible to develop a functional product, keep existing customers satisfied, and maintain a profitable business. However, the kind of success that good product management could bring for a company is rarely achieved.

Companies with mediocre product management usually manage to survive, as long as the market situation stays stable and no innovative competitors emerge with re-thought products or business models. As digital disruption keeps accelerating, it’s usually only a matter of time when the old competitive advantages disappear and it becomes a profitable enough opportunity for digital-first startups to disrupt the mediocre companies in the field.

Good product management

When an organization's product leadership is at a good level, development work is done only to the necessary extent, and it's always business-driven. Product development serves a double role with also validating new business ideas, and when a good idea is found, the company is very effective in scaling it fast.

In addition, good product management generates innovative ideas and creates a better customer understanding that affects all functions of the organization, such as sales, operations, marketing, and strategy.

Good product management ensures that the business has a clear vision and message that works and is well internalized both inside and outside the organization. This will create more value and ensure that unnecessary investments are not made.

10 things that make product management good

There are undoubtedly many ways to do product management well. However, in my experience, the following ten things are usually a sign that your product management organization is a well functioning:

  1. The company has an inspiring vision and purpose. And not only a tagline, but an actual high-fidelity snapshot of what you want to accomplish.
  1. The product has a clear unfair competitive advantage, and the company knows how to communicate it clearly. Everyone knows the key differentiators of the product.
  2. You have a clear product strategy, which is in line with the go-to-market strategy.
  3. Product strategy has a clear narrative, and everyone in the organization knows it. The same narrative is told internally to customers and potential investors.
  4. Product strategy is understood throughout the organization, and it has a clear link to the organization's larger strategy.
  5. The role of product management, its responsibilities, and processes are clear and understood.
  6. Every week customers and users help the team to learn something new. Developers talk to customers directly at least monthly.
  7. You have technology and infrastructure to support experiments and data-driven decision making.
  8. Your product managers have experience in product management, being a product manager, and building a new business in this particular role.
  9. Your product managers work full-time with product management. You don’t e.g. have people serving as product owners while also having another role.

Is it possible to outsource product management?

Product Management is your core competitive advantage and you should always strive for developing this talent in-house.  A competent in-house product manager is always the best solution. Sometimes, however, the situation is that the organization might not have the product leadership skills required for hiring competent in-house product managers/leaders. Instead of making costly hiring mistakes, here, an external consultant can help clarify the current state of product management, product strategy and support the team temporarily to get on track. 

For us at Coventures, this is a fairly typical situation. We have helped several companies with their product leadership until they were ready to recruit their own experienced product manager.

Should you buy product management as a temporary service, you should make sure to buy technology and product management from different providers, as otherwise there is a conflict of interest and misaligned incentives. Unfortunately, some suppliers still offer both as a service, even though it fights against all the principles of agile product development methods. A good technology supplier refuses to start a project without good product management as it's often a recipe for failure.

Would you like to learn more about product management and product led growth? Watch our webinar (in finnish)!