Effective product management is the critical success factor to make a product successful – across its life-cycle and across markets. This article provides an overview on product management and our experiences with introducing, improving and deploying the role of a product manager in different industries. We will look at the interface of product management with requirements engineering. We found that with increasing institutionalization of a consistent and empowered product management role, the success rate of projects in terms of schedule predictability, quality and project duration improves. So we provide concrete practices that will boost product management in your company and thus the success rate of products in terms of predictability, quality and efficiency. The article describes the discipline of product management. Starting with a framework of product management it indicates what solutions are available to practically implement this framework. It underlines the basic concepts and practices of product management with experiences taken from a broad range of industries and also summarizes current trends in product management. In working with hundreds of product managers we achieved efficiency and cost gains of up to 20% per year. Explanatory factors for this positive impact of product management include leadership and teamwork, managing risks and uncertainty, mastering stakeholder needs, and accountability towards agreed business objectives with one empowered individual across the whole product life-cycle. In the words of a senior executive of one of the organizations with whom we had been working on competence evolution over the past years: “Product management has a pivotal role for us. They are the glue that brings together operations, marketing and engineering. We have seen the benefits of product management in terms of reduced delays and faster product acceptance in the market. The benefit of investing in our product managers’ training has far outweighed the cost.” At the end of the article we will also look to trends in product management. These trends indicate close collaboration between industry needs and research at both universities and enterprises. Product management trends naturally are influenced and determined by external trends that impact our society and therefore buyer behaviors as well as individual needs.
The Need for Product Management
No matter what business you are in, product management matters. However, often we focus too much on technology, and not enough on value. Features are lined up like a washing list. Yet only half of the originally allocated requirements appear in the final product release . This is primarily the consequence of not having one clear corporate owner with assigned accountability for its success. Sales and marketing are disconnected from strategy and product development. Poor product management causes insufficient project planning, continuous changes in the requirements and project scope, configuration problems, and defects.
From the rather tangible IT systems in finance and industry to the many applications we are using on an almost daily basis to ubiquitous computers in smart phones, automotive and consumer electronics, products must be managed from strategy to concept and development and market entry and of course throughout the life-cycle including maintenance, service, variant and version management etc. When looking in the rear mirror we see many companies and endeavors which failed due to overemphasizing technology and not sufficiently implementing a sound business strategy [1,2,3]. Take Netscape. For many of us it was the first experience of the Internet. In 1995 it had a market share of 80% - more than enough to stay in the pole position forever, as companies such as Google or Amazon show. But already in 1997 it slowed down, lost market share, and in 2003 went into bankruptcy. What went wrong? One of the managers put it in simple words: “We had no product management; it was just a collection of features” . More recently and in another domain, a previous Nokia senior manager claimed that the lack of product management is the primary reason for their loss of market share in the past years . On the other hand, we all admire companies such as Apple or Google for their excellent product management.
Product management is the business management of a product (including solution or service) over its life cycle with the objective of generating the biggest possible value to the business. The successful product manager not only masters the life-cycle processes, he is their owner. He must get as early as possible and well before the project start a good systems perspective to assess the value proposition and priorities. He has to balance projects, people and politics. His primary tools are roadmaps, requirements, milestone reviews and the business case.
The success of product development is measured in delivering the right products at the right time for the right markets. Naturally the success of a product depends on many factors and stakeholders. However, we realize that it makes a big difference whether many cooks spoil the broth, or whether one person is empowered to lead all activities for the product from inception to market and evolution – and be accountable for the results. This is the product manager.
We continuously work with companies worldwide to improve their product management. A recent benchmark  shows that 53% of the companies have the vision that the product manager has end-to-end responsibility for the success of the product. In reality however, only 33% are actively implementing this vision. This means that about half share the concept of a strong product manager. For the other half, product managers are mostly subordinate to marketing and play an administrative role, such as maintaining technical roadmaps.
Often the roles of product manager, project manager and marketing manager are confused. Fig. 1 shows these three key roles and their responsibilities. One might argue that in a concrete organization, one or several of these roles are laid out differently and might simply be coordinating directions that they receive from their management. While this is certainly true as an observation, we should note that such organizations often face interface and responsibility battles and have a lack of ownership for results. These three roles are necessary and need to be empowered – and held accountable for results. This not only stimulates motivation but also facilitates faster and more effective decision-making in a company.
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