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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.
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.
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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Does better product management mean better business performance? We performed root cause analyses of hundreds of products that underperformed and found similar causes reappearing. Root causes included business cases that were never re-evaluated, unbalanced portfolios that strangulate new products, insufficient management of new releases and service efforts, and the lack of vision that caused requirements to continuously change.
Having worked with 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– managed by one empowered person across the product life-cycle. In the words of a senior executive from 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.”
Product management must hold a particular position in the organization to be successful. It translates between strategy and implementation, such as in requirements development (Fig. 2). From our survey  and in working with many companies worldwide, we found four success factors that will help to advance product management:
These four success factors were most often named by the interviewees as those that facilitate success as product managers. We will briefly explain these four topics. We draw the experiences from different projects where we have been introducing product management in companies around the world with different sizes and from different industries. We do not claim that this set is exhaustive; however underline the emphasis they received as top four from a longer list.
1) Product managers uniformly claim that different stakeholders have unaligned agendas which make the project late and cause lots of overheads and rework. The first success factor therefore is to formally create a core team with the product, marketing, project and operations managers for each product (release) and make it fully accountable for the success of a product (Fig. 3). These persons represent not only the major internal stakeholders in product or solution development, but also sufficiently represent different external perspectives. The multi-disciplinary core team leads the product development in all its different dimensions. Decisions are taken and implemented by the respective function, such as deciding requirements priorities, test strategy, increment planning, backlog, etc. This core team is operational throughout the product life-cycle. The success factor is to give this core team a clear mandate to “own” the project. Too often we face silo organizations in marketing, product management and engineering that don’t work together. This means in many cases not only to build teams, to train and to coach, but also to adjust annual targets and performance management. Culture will change when targets are adjusted to such team ownership.
2) A standardized product life-cycle should be mandatory for all product releases, i.e., all engineering projects. Most companies today have such a life-cycle defined but rarely use it as the pivotal tool to derive and implement decisions. Too often, requirement changes are agreed in sales meetings without checking feasibility, and technical decisions are made without considering the business case and downstream impacts. A useful product life-cycle has to acknowledge that requirements may never be complete and may indeed be in a “continuum” state. The product life-cycle should guide with clear criteria, i.e., determining what is good enough or stable enough. This implies that it is sufficiently flexible to handle different types of projects and constraints. Requirements and business objectives must be managed (planned, prioritized, agreed, monitored) throughout the life-cycle to assure focus . To avoid reporting overheads we recommend using online workflow tools to support such product life-cycles.
3) Good product management understands the customer’s voice and business case and then develops necessary features. Each single requirement must be justified as supporting the business case and to allow management of changes and priorities. If a product is developed without the business rationales underlying its requirements it is in trouble because the requirements will continuously change. A product or solution must address a need and must have a strong business vision. This vision (i.e., what will be different with the release of the product) must be coined into a story. The story then translates to business objectives and major requirements. Requirements are a contract mechanism for the project internally and often for a client externally. They must be documented in a structured and disciplined way, allowing both technical as well as market and business judgment. Ask a tester to write a test case before processing the requirement. Ask the marketer in the team to check whether he can sell the feature as described. Determine what is good enough and ensure that any further insight is adequately considered. After evaluation they are approved by the core team.
4) For each product the product manager drafts a high level roadmap document with the product strategy and the functional and technical features planned in releases for the coming years. Managing and maintaining roadmaps and the portfolio as a mix of resources, projects and services must be the focus of each product manager. With moving targets, the sales department has no guidance on how to influence clients, and engineering will decide on its own which technologies to implement with what resources. When it comes to his own portfolio, the product manager has to show leadership and ensure dependable plans and decisions that are effectively executed. Apply adequate risk management techniques to make your portfolio and commitments dependable. Projects may need more resources, suppliers could deliver late or technology will not work as expected. As mitigation, platform components used by several products might use resource buffers, while application development applies time boxing. If there is a change to committed milestones or content within your portfolio, it must be approved first by the core team and secondly, where necessary, by the respective business unit’s management, and then documented and communicated with rationales.
Often product managers advance from a technical career and grow into this discipline, lacking any form of formal education. There is no typical career path both into and inside product management. In Europe and Asia product managers mostly evolve from the technical role, such as technical project manager. However these product managers are not really pursuing a product management role as we defined it in the introduction. Rather than formal certification, product management competences must be aligned with what provides value to the business. A product management framework fulfils this demand in providing a framework and individual training modules. It was shaped by working with hundreds of product managers world-wide in different industries [3,4].
Only 27% of the companies practice a systematic competence management and training program . Training correlates highly with product management success across the interviewed companies. External certification is rarely used, as it is, for example, with project managers. The reason is that often the product management role is very much tailored to company-specific needs and constraints. Several senior managers with whom we talked perceive that “there is currently a flood of certification programs which in the end only fill up CVs of people applying for other positions”.
As a senior manager with whom we worked pointed out: “We had many so-called product managers which were just promoted from a technical role without a clue about the business needs and the skills they should have.” In consequence they are not content with the role and rather often in our interviews blame “politics” for not achieving their missions. These product managers do not master their role.
Often we are asked by product managers what they can do themselves to deliver better results. Here is our top-ten list to personally grow as a product manager:
We will finally look to trends in product management (Fig. 4). 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. Here is what we see for the near future:
These ten best practices are applicable for each individual product manager. Having looked at hundreds of industry projects from various domains such as automotive, transport, healthcare and IT systems, we strongly suggest applying these practices to improve personal performance – and thus business results. They depend on each other, so it is not of much value to select only few and disregard the rest. Start using them and you will achieve better results – and more recognition.
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Product management is a key business role in the entire company – empowered to act as a business owner. It provides the basis for success or failure in product development. Real progress is what creates a lasting user experience, and this is defined from a product perspective – and not ad-hoc during project work in a shouting contest.