Structuring High Tech Product Management

Tech Product Management–what does this term mean in the typical software or hardware company? What is the function, and where does it belong? I have a broad view on this as I’ve held permanent positions in quite a number of high-tech concerns, as well as worked in this area with a great many software and hardware companies in a consulting capacity.

The Tech PM: Wide variety in emphasis and strength of the role

Product Management is resident all over the organizational map in software and hardware companies. Maybe most often it resides in the marketing department. Frequently, it’s placed in the engineering/product development department. Occasionally you will see it as its own separate function. Again, what does the term “Product Management” mean in a High Tech company?

Sometimes “Product Management” is used interchangeably with the term “Product Marketing”. Here the term means responsibility from cradle to grave for the product planning as well as outbound marketing functions for a particular product or product line. In other words, it is working with the developers to define the product (product planning), as well as driving the other “3 of the 4Ps” for the product–setting pricing, distribution strategy, and promotional strategy.

Looking at larger companies, you will often find this function separated into two distinctly titled jobs: Product Management for the New Product Planning function, and Product Marketing as the function that manages the product after it is released into the market–driving pricing, promotion, and distribution as stated above. In this case, both functions may still reside in the marketing department, or the Product Planning role is sometimes resident in the engineering/product development department.

The last variance on this theme that I see more and more often these days is that Product Management resides in the engineering department, but it only vaguely resembles the traditional, marketing-focused definition of the role. In this case, the term really means “Product Planning”. Under this scenario, the job responsibilities and skill set more closely resemble the definition of an engineering project manager, with little or no weight put on exploring the market to match marketplace needs with engineering capabilities.

Matrix Management – Not General Management

In High Tech businesses, the Product Management function is typically a “matrix management” position: lots of responsibility for a product’s success, with very little authority to ensure that success. Normally a Product Manager’s success will be decided based upon their ability to convince other stakeholders across many departments in the organization that the path laid out is the best thing for the company (and the individual stakeholders as well!) People skills are therefore just as important as having technical & marketing skills in the ultimate success of most Product Managers.

Contrast the above to the parallel role in consumer markets, where the Product Manager typically holds much more direct power–much like a mini-GM for his product line. Often product development will even work for him. The term “Brand Manager” is most often used in consumer businesses instead of Product Manager. (In a Tech company, an individual with a Brand Manager title will usually fulfill more of a Marcom type of role focused on “Branding”).

The ideal tech product management role from my perspective

So what’s the best way to structure the Product Management role in your software or hardware business? Well, there really isn’t one best way. It depends upon your particular business, culture, and personnel. But I do have my biases based on past experience:

I believe strongly that most tech businesses would benefit by structuring the Tech Product Management function to be on the stronger end of the scale, in terms of authority. And there is generally much to gain by putting a savvy, experienced Marketer with a solid technical background (but NOT so technically focused that the gory details of programming or engineering are their main interest) in a Product Manager role. It’s advisable that they are graded and and received bonus compensation using the results of the P&L of their product line as a primary factor.

Along this line of thinking, I prefer that both the product planning and outbound marketing functions be unified under the marketing department. In larger companies, there may be separate individuals fulfilling these roles for an individual product line, but there is significant synergy in unifying these functions in one department as they should both have a strong market focus.

Lack of strength of product management function can hurt the company

I wouldn’t go so far as to suggest that Product Development should report to the Product Manager in a hardware or software company. However, I would give them some discretionary authority over at least a portion of the marketing budget for their product line.

I would also make sure they have management’s backing to deal with the developers from an equal position of strength. A lack of strength in the product management function is a real problem in many software and hardware companies, particularly those founded and run by developers. When the corporate power structure leans too heavily toward the engineering group and the product management group is “toothless”, your company risks ending up with “gee-whiz”, technically-driven products which sometimes end up as “cures seeking a disease” rather than finding a robust market.

The ideal Product Manager’s mentality should be that of a “mini-CEO” of his product line analogous to the overall company of a real CEO. He doesn’t have the same type of authority, of course, but a similar mindset is useful in driving a product line’s business. And as implied above, it’s imperative that the position does need to have some “teeth”.

Strong product management should limit product disasters

As I alluded to above, far too often in technology companies the Product Management/Marketing functions do not have the ability to stand on an equal footing with Engineering. This can lead to a culture of building what suits someone’s fancy, not building what the market needs and will buy, as I insinuated above. This can sometimes work for a product or two but is a very dangerous thing in the long term. A strong Product Management function should serve as the customer’s voice in the product development process, and also be an advocate totally focused on that product line.

The Product Manager’s sole “business purpose in life” is for his product line to succeed. This outlook ensures that the big picture will always be looked out for, eliminating the potential for a product line’s performance to be reduced by turf wars, or by sub-optimal tactical moves due to poor inter-department communication. The Product Manager is there to rationalize conflicting agendas and orchestrate events to ensure his/her product line has the best chance of “success”, whether that means hyper revenue growth or maximizing cash flow for investment elsewhere.

There is my take on how Tech Product Management should be structured conceptually–what’s yours? Please leave a comment below on your own experience and philosophy to enrich the discussion

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