The role of the product function in a modern business
Some of the UK’s leading CPOs gathered recently to talk about how they built their functions and how to work with the rest of the business
Product management has changed out of all recognition in the past decade. As digital start-ups blossom into large listed companies and digital products are placed at the heart of more and more corporate strategies, companies – large and small, new and old – need a senior exeuctive to manage all aspects of their digital output.
A recent roundtable breakfast at The Up Group included Chief Product Officers (CPOs) and other senior product executives from Just Eat, ZPG (formerly Zoopla), Tesco, Ticketmaster, Brandwatch, the Financial Times, Amazon, CNN, Moneysupermarket, and Worldpay. The conversation centred on four themes.
Establishing the product function as its own discipline
All the CPOs round the table that had established their own product function agreed that a fundamental part of the challenge is getting buy-in from the rest of the executive team and also colleagues throughout the business. The key to doing this is to prioritise. As one participant said, “don’t do everything at the same pace;” he advises on getting quick wins, and building from there to show people at all levels how you can make their jobs easier, and help the company with its goals too.
Another important piece of advice is to show how typical product disciplines, like a test-and-learn approach, especially via A/B testing, can pay huge dividends. One CPO said that their team had linked a “dollar value” to improved user satisfaction metrics, and then showed how various product innovations and improvements can ultimately contribute to revenue growth.
Another participant outlined how the best way to introduce new processes into a diversified and fast growing company was to show value further down the company hierarchy. Demonstrating to people doing the day-to-day work of the company how product disciplines can benefit them will in turn persuade senior management of the value. This is especially the case if a CPO wants to show the power of the product function to a newly acquired business.
Remember, there is always a balance to be struck, however. CPOs should make sure their teams are applying product principles to the bits of the company that most need it. It’s important to stop teams from continuing to work on perfecting a product until they are “optimising the optimisation” strategy, and instead go looking for more valuable work.
Educating the business on modern product management disciplines
A lot of the discussion on helping the business take a product management approach focused on the power of product roadmaps. CPOs suggested that the roadmap can reframe exective discussions from “here’s my list of things I want Product’s help with” to a discussion about what outcomes they are trying to achieve. This allows product specialists to explain why there might be better ways of achieving the outcome than what the executive envisages.
One product executive mentioned that his team collect examples of what worked in the past to help people make sensible product decisions. He recounts a time when a business unit team were convinced that a website plug-in was helping them make more sales. When the product team A/B tested it with a different solution, the plug-in was found to be costing the company far more money than it was making.
Counter to the business unit team’s “gut feel,” even just turning off the plug-in was more beneficial than leaving it on, let alone using something different to perform the same function. He says that stories like that can help educate other areas of the business.
How Product and Technology should work together
The participants differed in their view of how the product and technology functions should work together. Some suggested that the two functions should roll-up into one senior executive. They felt that you would risk having disjointed decision making otherwise. Others suggested that you needed two different functions working together but independently.
Ultimately, it depends on the nature of the business and how it has evolved over time. A B2B business that deals with highly technical customers, for example, would benefit from an experienced CTO with an engineering background but other businesses may need someone to take a product-first approach. Participants agreed that this decision didn’t necessarily come down to what sector the business works in but more its organisational structure and ways of working.
They also agreed that the role of the product function must be well understood throughout the company if you are going to have a smooth working relationship between the technology and product functions. Sometimes the CPO would benefit from having profit and loss responsibility, sometimes they should take on more of a support role to the rest of the business. The key is to embed the right product disciplines and understand how the Product function can best contribute to business goals.
Getting more women into product roles
The participants discussed how to best get more women into product roles (full disclosure: only one of the roundtable participants was female). CPOs talked about how they had had success in bringing people across from different functions. Sometimes in product roles it can be more important to have a deep understanding of the customer than it is to have a technical understanding.
To that end, participants said that they had people from account manager and marketing roles transitioning very well into a product role. They also spoke about how important it was to create “great stories” about what product teams were doing and how they were helping to build successful companies. These kinds of narratives can be incredibly powerful. Finally, they spoke about the importance of creating full career paths for product roles and using these at university milk rounds to get women into the discipline at entry level too.
And from the above it looks like the world’s product functions will need all the recruits they can get in the coming years.