Where Does Product Management Fit in a Company
This might seem like a simple question but it is not.
There are three possible solutions that are generally implemented. Only one of these is the right way to go as a long-term solution. Sometimes the other two solutions can work over the short-term.
While considering this, remember that the Product Manager has a trifold part to play within an organization. They have to concurrently be a champion of the product; a champion of the customer; and a champion of the business.
3 Path for Product Management in Organisation
The three candidates for the positioning of the Product Management function are development/engineering; marketing/sales; or as a standalone function. Let’s take a deeper look into the rights and wrongs of placing the function within each of these:
1. Development/Engineering:It is true that a Product Manager must understand how to work well with the developers/engineers.
They must be able to communicate effectively with them both in meetings and informally. They must be able to communicate requirements in a way that is unambiguous and easily understandable to both development/engineering and customers alike.
As a result, many companies put Product Management under the Development/Engineering department. This is not ideal as:
- Placing the reporting lines into development/engineering tends to mean that the Product Manager role turns into a Project Manager role.
- The Product Manager loses focus on the marketplace and the customer.
- Instead their focus turns too much into the technical and requirements engineering.
Sound knowledge of marketing and sales is vital for any Product Manager. A Product Manager has to be able to carry out full market analysis; understand the market place; to formulate marketing strategies; to put together sales training; and be able to produce or understand the production of sales/promotional materials. As with the development/engineering team the Product Manager needs to be able to communicate effectively with marketing/sales teams.
However, having the Product Manager report into Marketing/Sales department has a negative impact on the role itself. Product Managers that find themselves in this position often find that:
- They become part of the marketing/sales machine.
- They spend the majority of their time training the sales force; presenting; and demonstrating the product.
- They lose focus on the marketplace and the customer.
3. Product Management/Standalone Function:
Having the Product Management function as a standalone department, as a peer to the Development/Engineering and Marketing/Sales departments is the best long-term solution for most companies.
This ensures that the Product Manager is able to take a holistic view of the product. From an independent position. the product management function can form cohesive relationships with both other functions whilst keeping the business goals and customer needs firmly in mind. The Product Management function can be free to strategize for the future; find new opportunities; deliver the product that the customer wants; and align all they do with the business’ goals.
Designing an Organizational Strategy for Product Management
Transforming organizations is the goal of many leaders today. One of the best ways to transform an organization
is to establish a constant and definitive PM structure that acts as the stable underpinning of the company.
Many leaders wrongly believe that it is impossible to replicate or teach the behaviours that have led to good
results in the past. However, if a universal set of PM paradigms is implemented, it can ensure more predictable
Typically, companies view the primary job of PM as filling gaps in the work carried out by other parts of the
company, such as marketing, sales, development, and operations. PM often has no uniform governance or coordination.
However, with a stable foundation of processes, systems, and people, PM can result in better outcomes
for a company as a whole.
Companies should strive to develop a Product Management Organization Master Plan that acts as a repository for
all actions related to PM. This plan serves as an active archive to establish precedents, minimize confusion and
foster communication among key constituencies in the organization.
The plan should include:
• A competency model to assess and evaluate the knowledge, skills, and experience of PM staff.
• A method to assess and evaluate gaps between current and desired performance levels.
• An optimized organizational design that encourages various functions to work collectively on behalf of the
• A method to periodically evaluate the maturity of the PM organization so that it evolves and progresses over
When an organization has a strong PM system in place, it is more flexible and agile, and it can pivot more easily
as market conditions change
Solving the Puzzle of the Product Management Organization
When an organization is not working well, the natural inclination is to restructure or rearrange things. However, the results of these changes are not always positive. Leaders must understand that an organization is like a human body with many systems and functions that are tied together. A good leader knows how these systems work together and influence one another.
An integral part of a product manager’s job is to institute the mechanisms and routines that will continually capture, share, and institutionalize data and synthesized information across functions of the organization. Proactive, effective product managers who capitalize on this capability earn greater levels of credibility with people up and down the organization.
Reorganizations often fail because leaders do not fully realize the systemic and holistic implications of a change.
To assemble a holistic, sustainable backdrop for PM in an organization, there are certain “puzzle pieces” that
must be present:
- Documented processes.
- Systems and tools that provide metrics and measurements.
- A viable, flexible structure.
- A staffing model that nurtures and sustains cross-functional product teams.
Every product or product line is a business within a business. All business models should account for each of the
three Areas of Work:
- Planning (new product planning).
- Executing (new product introduction).
- Managing (post-launch product management).
Unfortunately, in some environments, the beginning-to-end approach to PM is not applied. Instead, companies use a development-centric approach. Companies that use this approach do not pay attention to other processes and interconnected work elements or ongoing market analysis and key performance indicators. By using the Product Management Life Cycle Model as a stable reference point, it is much easier to get members of an organization on the same page in terms of planning, execution, and management.
Companies are structured in different ways:
- Function-oriented companies have separate divisions for marketing, operations, and finance.
- Product-oriented companies organize divisions around different product groups or product lines.
- Geography-oriented companies have divisions for various geographic regions.
- Hybrid companies combine two or more of the above structures.
No matter the structure, PM should be able to thrive in any type of organization.
Clarifying the Role of the Product Manager to Improve Staffing Strategies
About two-thirds of companies do not have any sort of formal method to benchmark or analyze their product managers.
Most use informal and undocumented methods to discover their high performers. However, analyzing and segmenting product managers offers a great opportunity for organizational planning.
In terms of a career choice, PM is often considered a stop-off job on the way up the corporate ladder. This way of thinking limits the potential PM talent pool. Good, experienced product managers enable companies to be more efficient and productive, and they make notable and visible contributions to their companies’ performances.
The perception of the product manager role is a temporary position must change.
Companies need strategies in place for staffing PM roles. Strategies must include a defined sequence of events, an agreed-upon set of goals, and a cross-functional staffing team. The Product Manager Competency Model serves as a reference point for developing a strategy. Within this model, there are seven broad competency groups to refer to when making hiring decisions:
- Developing market insights.
- Crafting effective strategies.
- Planning and carrying out effective, timely product launches.
- Managing and monitoring the financial and market progress of products and portfolios.
- Translating information from many sources into cohesive decisions.
- Driving action throughout the organization and building shared accountability across all contributing functions.
- Using basic work management skills.
In order to implement and execute an effective staffing strategy, it is important to understand the key elements
and core competencies of this job category. The product manager role has five essential elements that overlap
The core competencies above make up one essential group of elements. The other four elements
include leading and influencing, domain and technology, entrepreneurial vision, and critical thinking and decision
The actual process of hiring involves several steps:
- Assess the current population of product managers.
- Segment the population into logical groups.
- Determine the need for domain or technical expertise.
- Calculate the market pay scales.
- Identify the required interrelationships.
- Validate or rewrite job descriptions.
- Improve interviewing procedures and protocols.
- Introduce competency assessments into the recruitment plan.
- Improve hiring decisions.
The hiring process is complex, but if all of these steps are taken into consideration, good quality product managers
will be hired.g a Knowledge-Based Community of Practice
Communities of practice are groups of people who share common sets of interests or common sets of roles in an
organization. A community of product managers is needed to keep everyone in the loop. Electronic collaboration
and document sharing is not enough. There must be a community where product managers collaborate
and share knowledge.
A community will only work if it has a good foundation. PM communities should:
• Have a purpose and a charter.
• Have leadership and guidance.
• Provide destinations for product managers and other interested people.
• Have informal and formal events that have themes and activities that inspire structured and ad hoc interaction.
• Have resources and funding.
• Provide product managers with the perspective that the cornerstones of
the community are sharing, learning, and knowledge building.
• Integrate the knowledge and understanding of professionals from adjacent
disciplines to build broad perspectives.
• Utilize reference models and PM processes as topical guidelines.
• Build a portfolio of possible activities as a basic framework.
To ensure that these communities are worthwhile, leaders can set the agenda
for the community and keep a scorecard to ensure there are improvements in
effectiveness, decision making, and other relevant areas.
Designing and Sponsoring Cross-Functional Product Teams
Product teams are microcosms of cross-functional executive leadership teams. These teams are in place for the
life of a product. Members are responsible for the performance of a product or product line.
Cross-functional product teams must synchronize the efforts of all business functions, product groups, and
geographic divisions. They must ensure that all groups are operating efficiently and that financial and business
objectives are fulfilled. Ultimately, they provide for the appropriate level of governance consistent with a corporation’s
These teams must have the right people. The core members should include a product team leader and five to
eight other people from finance, marketing, operations, development, service, supply chain, and sales. They
should have the authority to make decisions and draw on and direct resources, and they should have the right
tools and systems to help them meet performance goals.
A firmly entrenched and chartered governing board for PM can help an organization achieve its broad business
objectives. It can also serve as the voice of PM to the senior executives. The charter places the board at the
heart of the organization. Its goal is to make sure the functions of PM can survive for the long term, even during
periods of organizational change.
What about in PM in Startups?
At startup companies, having the Product Management function as a standalone department can be very hard due to lack of resources available.
In the short term, this can be mitigated by having the right person serve this role – such a person should be skilled across the disciplines of Product Management, Development/Engineering and Marketing/Sales. This must be done with the goal of forming a separate department in the medium/long term as the company grows.
Roles in Product Management
Product Management does not have a particularly well defined structure.
Many of the job titles are interchangeable and mean different things within different organizations. Large organizations may have dedicated Product Management teams with a VP of Product Management sitting on the executive board. Smaller organizations could just have a single Product Manager that carries out the full scope of roles for one product.
That said, here are the most commonly specified Product Management roles and what they actually entail.
Junior Product Manager
This role can also be known as a product analyst or an associate product manager. This role is generally taken on by a graduate that has just finished their degree.
They usually do not have overall responsibility for strategy. They will usually be tasked with owning single features in a product release. This would entail defining the feature; controlling the functional direction; writing the specification; and managing the feature through to release and beyond. They will also be given the opportunity to carry out benchmarking; market analysis; and competitive analysis. They may be mentored by a Product Manager.
The product manager role generally requires 3-5 years previous experience in a product management role. Degrees in Business and/or Engineering are the usual requirement.
The product manager takes on a bigger vision and more responsibility. They are normally responsible for the overseeing of all activities associated with the lifecycle of a particular product. Additionally they have to guide a cross-functional team to generate and implement new product initiatives and increase the profitability of the existing products. This may or may not be done under the supervision of a Lead Product Manager.
Lead Product Manager
This role usually requires 6-8 years’ experience of product management. Degrees in Business and/or Engineering are the usual requirement; additionally an MBA is sought after.
Lead Product Managers have largely the same responsibilities as Product Managers. In addition, their role involves managing/mentoring product managers, as well as taking a fuller role in strategizing and execution of the product roadmap for the short, medium and long term..
Director of Product Management
Also known as Director, Product Management this role usually requires about 10-15 years of experience in product management.
A Director of Product Management is likely to be responsible for a large proportion if not all of a product line. Responsibility here lies with creation of an overall strategic roadmap. They manage a team of Lead Product Managers, Product Managers and Junior Product Managers. They ensure that the Product Management process that is in place fosters activities that result in compelling products being produced.
VP of Product Management
Also known as VP, Product Management this role is a member of the of the executive team of the business. Considerable experience in product management and business is required for this senior role.
This is a strategic role that leads the definition, development, and implementation of the businesses product strategy. Often have direct responsibility for the profit and loss for every product in the business portfolio