Archive for Organization
Product Management Triad
Posted by: | CommentsHow do you organize product management when there are multiple people involved with varying skill sets? How any product managers do you need? What are their roles in the company? Is product management a support role or a strategic one? How do you use the various product management titles such as product manager, product marketing manager, program manager, or product owner?
Why You Don’t Let Sales Management Own a Technology Partner Relationship : The PM Dude
Posted by: | CommentsToday, we are going to explore why Sales Management (even if they are cloaked in a title of “Director of Business Development” – you are just a jumped up sales droid dude) should never “own” the relationship with a technology partner.
Read more in Why You Don’t Let Sales Management Own a Technology Partner Relationship : The PM Dude.
Who owns partnerships in your company?
The need for speed « Street Smart Product Manager
Posted by: | CommentsOne other methodology (if you can call it that) I’ve experienced in the past is a “co-location” approach. I basically describe this as “identify a business opportunity to solve for; then take a bunch of people across the company to represent the business, implementation, operations and IT, throw them into a room, and don’t let them out till they’ve designed the product / solved the problem.” The thinking here is that if we take our best and brightest, and focus them in singular fashion on solving a particular problem under a tight deadline, they’re bound to come up with magic, right? Isn’t that what saved the day in Apollo 13?
What are the pros and cons of co-location and tiger teams? Learn more in The need for speed « Street Smart Product Manager. (And look for the nice shout-out to Pragmatic Marketing).
Bonus programs for product managers
Posted by: | CommentsA customer recently asked:
I have a pressing question about incentivizing a product manager that I have.
We are neither for nor against bonus programs but surprisingly they may actually de-motivate by encouraging the wrong behavior. Think of the development team that introduces bugs so they can get compensated for removing them or the sales plan that encourages deals that benefit only the salesperson and not the company.
Nonetheless, 80% of product managers and marketers receive a bonus, about 10% of base salary. These are typically based on company profit (67% of survey respondents), achieving personal goals and objectives (37%), and product revenue (26%). (See more on product management compensation at www.pragmaticmarketing.com/survey)
One question we often hear is “Shouldn’t I bonus product managers on profit & loss?” But the product manager who is paid on P&L may ask, “Can I outsource development if I don’t like the cost or time estimate?” or “If I’m responsible for P&L, I’ll need authority to reject contracts for excessive discounting.” Although the idea of P&L responsibility seems logical, the ramifications have a significant impact on business decisions.
Another popular idea is a plan associated with product revenue. But is supporting deals one-at-a-time what you want from your team? And do you want your team carefully selecting which salespeople to help, the one most likely to close a deal? In other words, this product revenue approach often leads your team to provide support to the salespeople who least need the help.
In reality, compensation based on this year’s product performance tends to focus product managers on tactical items. “Pay me on revenue and I’ll go on sales calls and do more demos.”
One technique for encouraging a more strategic view is to compensate for the activities this year that result in better product performance next year. It’s tricky though; how do you pay for next year’s results? How do you measure next year’s profit?
Jeff Bezos of Amazon said, “If we have a good quarter it’s because of the work we did three, four, and five years ago. It’s not because we did a good job this quarter.”
Where should product management report?
Posted by: Steve Johnson on June 8, 2011 | Comments (0)Each department in your organization needs product and market information to make sound business decisions. Executives need a business plan and a roadmap. Development needs prioritized requirements. Marketing Communications needs messaging that resonates with buyers. Salespeople need to understand how product features address real customer problems.
Many executives vie to have product management and marketing professionals in their department, likely because each realizes the need for product and market information. But each department has a different objective and imposes a different focus on the product management role. In short, executives typically focus on the word that follows “vice president” (marketing, development, sales, etc.).
Our survey data shows the department that contains the product management and marketing roles changes as revenue increases. Companies with less than $1 million in total revenue often have product management reporting directly to the CEO. As companies grow, the product management role moves from the CEO to its own dedicated department. With the exception of the smallest companies, 40% of organizations have product management reporting either to the CEO or to the head of Product Management, 20% of product managers report to Marketing, and 13% to Development with only slight deviations by company size.
percentages by company size for where a product management group reports
What happens when product managers report to different departments? When compared to a dedicated product management or product marketing department, those in Marketing tend toward go-to-market activities while those in Development focus on the technical.
Organizations come in many shapes and sizes, and what works for one company may not work for you. But every product team in your organization–development, marketing, sales, and others–needs product and market knowledge.
What Does This Mean to You?
A decentralized approach puts knowledge close to the people who need it. However, this can lead to strategy fragmentation, where the message changes by the time it reaches developers and customers.
A centralized department has the beauty of a single voice. The information getting to developers, engineers, salespeople, marketers, and customers comes from the same organization.
Either way, a world-class product management department must deliver market knowledge to executives in the form of business plans and product roadmaps, to development with market-driven requirements and priorities, to marketing communications as market-focused positioning, and to the sales team with sales tools that resonate with buyers.
Simple rule: individuals on your marketing team should not spend more than one day each week supporting any other department.
What Should You Do Next?
Companies have an unchanging need for market knowledge and product expertise. The question is where should this knowledge reside–in a large centralized department or distributed to others?
Put knowledge where it counts. Demand for market data should come from other departments–you want that. But time spent supporting one area comes at a cost to others.
Our experience tells us a centralized department that serves other functional areas is the best approach. The collaboration within the team is highest and the likelihood for bias is lowest.
Regardless of where your team reports, as a leader you must ensure that team members have clear priorities, because demand for rich product and market knowledge will always outstrip supply.