What is Product Management?

Product management is the job of looking after a specific product within a business.

It’s a role at the very heart of an organization that needs to balance the need to deliver value to your company (usually profit) with what customers want and what’s technically and operationally possible.

That means coming up with a product strategy, thinking about what to build (Product Development), and working out how to market and sell the product (Product Marketing).

This short video explains the key principles of product management.

The 3 key principles are:

  1. Build once, sell many times – this gets the economies of scale that result in higher profitability
  2. Being an expert on the market as well as the product – this makes sure you build products that customers will buy
  3. Lead within the business – with a balanced view across all the different aspects of the product

The different product roles

Product management is done differently from one business to the next. It depends on the size of your company, whether you work with software, physical products or services and if you’re selling to businesses or consumers.

And the different varieties of product management don’t stop there. You may only have internal customers, be selling customized solutions or be managing a service – and still be called a Product Manager.

Venn diagramTo add to the confusion, there are lots of different job titles that focus on different product-related activities. Three of the most common are shown in the diagram. And to make things even more confusing these product roles often overlap. And they’re implemented differently from one company to the next. See Product Manager Job Descriptions for more detail.

Our view is that product management is done by lots of people across an organization. And some of these people have the word ‘product’ in their job title and others don’t.

Product Activities Framework

To make things clearer, our Product Activities Framework identifies all the activities that need to take place in any company with products.

Strategic Product Activities are about working out what the right product is for the business. Inbound activities mean working within the business to help deliver the product and Outbound Activities are helping the business to sell the product.

Product Activities Framework (sign up to get a free copy)

It’s not very common for one role to be responsible for all these activities. They are usually spread across different roles and departments. However, if a company has products, all these activities should be going on somewhere in the business.

What is product management to other parts of the business?

To the Development team, product management provides direction, gives insights into what the market wants and validates that what they’re creating is needed. If the Development team lose focus and start building stuff that’s not wanted by customers, it’s down to product management to bring them back on track.

To the Sales team, product management can be the saviors who deliver shiny new products that let them have new discussions with their customers. They also provide information and support to help Sales to sell. But Sales teams are heavily motivated to keep their customers happy and often this means demanding that new features should be added to a product. Sales then sometimes see product management as the ‘sales prevention department’ when they no. That’s because the needs of one customer have to be balanced against the needs of others, what’s planned for the roadmap as well as commercial value and resource constraints. See Taming the RHiNO.

To Senior Management, product managers give a view of what’s going on in their business from a product perspective. Ideally, they also view product managers as the people who understand the market and who can help advise on the best product strategy for the business.

Product managers tend to be people who can get things done. They motivate and direct teams around the business to make sure the company delivers products that customers want. Although they drive activity in many areas of the business they rarely have direct control over other people so need to be good at communicating, influencing and leading virtual teams. The diagram below shows all the different stakeholders product managers may work with in a mature business.

Product Management Touchpoints

The Product Management Lifecycle

Another way to answer the question ‘What is product management?’ is to describe the process a company uses to choose, develop and sell products. There are lots of different methodologies and processes used by businesses in this area. We’ve simplified the steps into what we call our Product Management Lifecycle.

In some businesses, this process doesn’t exist at all. In others, there is a New Product Development (NPD) process that covers all the steps up to launch. And in others, there is a formal process from Innovation all the way through to End-of-life (known as ‘cradle to grave’).

For companies developing software using iterative Agile techniques, this series of steps may look like a purely Waterfall approach. However, our experience is that all products, releases or sprints go through these logical steps at some level and in some shape or form.

Product Management Lifecycle

Product Management Lifecycle (sign up to get a free copy)

The activities in these different stages are done by people in different parts of the organization working closely together. Product Management is leading or heavily involved in all of the stages.

At the Innovation stage, it’s about generating and collating new ideas, prioritizing the ones that look most interesting and coming up with what the customer proposition might be. It’s a phase of ‘discovery’. If the idea looks like it might be successful a decision is made to commit resources to investigate it further.

In the Analysis stage, it’s about validating if there is really a market need, writing the high-level requirements and justifying the investment. In many big companies, the output of this work is a business case that must be signed off by senior management before development can begin.

In the Development stage, the product is designed, built and tested. With Agile software development, this is an iterative process and there may be several sprints, each preceded by more client discovery work and analysis before the decision is made to release something to customers.

In the Go-to-Market stage, the company prepares for launch by running trials, finalizing the proposition and making sure the company is ready to sell the product. For companies building high-risk products in industries such as health or aerospace, this might take many months. For other companies such as those building online web-based products, the phase may be done in minutes as new functionality is continually released.

Once the product is launched it is In-life. The focus is on selling, tracking performance and fixing any issues. During the in-life phase, there may be many more product versions, each of which has been through the phases of innovation, analysis, development and go-to-market planning. And then at some point, when the product is no longer needed, it is withdrawn in the End-of-life stage.

Throughout the whole process, product management needs to track what’s happening in the market and respond to any changes.

The Product Management team or department

You could also answer the question ‘What is product management?’ by talking about the team, function or department that has that title in a business.

In some businesses, this area reports into another area such as Development or Marketing. However the majority report directly through to the board (38% in our 2019 Industry Survey). We think that helps product management have a balanced, independent and objective view for their products. See why we believe product management needs to lead.

How the team performs will depend on how well it is led, how it is organized, the people that work there and the processes and tools they use.

Summary

I hope this has given you a good insight into what product management is and what it’s trying to achieve.

And if you want to find out more why not sign up to the free resources on our website or come along to one of our training courses.

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