Establish a Product Management discipline and position your company for revenue growth, future investment or value realisation
The reality is that in successful early stage companies someone has been performing the product management function – defining product strategy, setting revenue targets, meeting customers, capturing requirements, supporting marketing initiatives, and managing investment priorities – often it is the CEO or a small key team, although they generally don’t refer to this as “product management” … more “business development”. However, as the company grows it becomes more difficult for this same team of people to cover all aspects of a product management discipline and there comes a time to establish it as a more structured function within the company.
The transition to a point where product management is a necessary part of an organisation can be gradual and the signs may be missed. Here are my observations on some of the signs that it may be time to revisit your “rusty” approach to product management and bring in new “tools of the trade”:
1) “Inside-Out” rather than “Outside-In”
Although your company is having conversations with customers they are typically driven by a handful of people, often senior leadership, and there is inconsistent feedback to the product development team. There is little understanding across the organisation of the target or addressable market resulting in ad-hoc capture of competitor, customer or market data. This lack of customer focus means product requirements are not linked back to a customer need or problem and there are no formal links between marketing and product development. With no mechanism in place to support proactive engagement with customers your company is struggling to create products that customers truly value.
2) Everyone is agreed on one thing … there’s no alignment!
As your company has grown it has become increasingly difficult to align everyone towards a common goal. Engineering, marketing, finance and sales teams have grown organically but are operating in silos with little cross-functional alignment. This has led to a lack of cohesion on how these functions will drive corporate strategic objectives or prioritise product strategic direction. It has become difficult to benchmark or measure the effectiveness of these teams.
3) Falling foul of the Hippo … hunches set the product direction
In your early stage company, your founder worked to a clearly defined business plan and growth strategy which ensured they captured necessary investment. As the company has scaled the focus has shifted away from the customer or market and the product strategic direction has become predominantly driven from personal hunches. In the quest to win more business there is little focus on customer validation and tentative links to corporate strategic objectives. The “Highest Paid Person in the Organisation (HIPPO)” is having a huge influence on how individuals prioritise their work and in this culture of the priority du jour there is a large element of confusion and an unhealthy lack of focus.
In order to cope with fluctuating markets, requirements are changing continually – business priorities are not articulated clearly and the product direction is not aligned across functions. Engineering is calling the shots and often drop or change features with little or no consultation with key stakeholders. Requirements are not understood during development so are regularly re-scoped to suit tight deadlines with little understanding of market or customer impact. Resources move frequently between projects and there is a developing culture of “fire fighting” or “organised chaos”. Engineers are creating and testing code but if asked to link back to a clear business case they are struggling.
4) Giving every customer what they want – adopting a “tactical” rather than “strategic” approach
In order to win business your company has approached each customer engagement as a bespoke deployment, with solutions tailored to the customer’s exact needs. This has resulted in a lack of cohesion or repeatability between customer releases with a large “services” component for each deployment. Code has become difficult to manage across customer sites and the development team are struggling to manage an increasing number of customer quality issues with a knock-on impact to release dates. Engineering priorities are predominantly driven from sales opportunities with little focus on the strategic direction.
5) A clear lack of clarity
Although your company may have initially created a technically masterful product they are failing to articulate its value to the market. When asked, Engineering position the product from a technical standpoint and fail to understand or demonstrate how the product relates to a customer need or problem that can be addressed. Consequently, Marketing battle to understand the technical complexities of the product and with a lack of a defined value proposition the company is struggling to position the product to their own sales team and ultimately to the market.
6) Losing sight of making money?
Development resources are assigned arbitrarily to projects, with little focus on “return on investment” or any link back to corporate objectives. It has become difficult to ascertain the cost to develop a product release or to link these releases to a value proposition or product strategy. Marketing promotions are failing to associate upcoming releases with value to the customer. Win/Loss analysis does not exist or is ad-hoc at best and customer data is not fed back to the product development team. Product pricing is arbitrary and unclear. There is no mechanism to associate product releases with clear revenue targets. Pricing varies across customers due to the bespoke nature of the deployments.
7) There’s a hole in the bucket …
Due to an uncertain economic climate or investor pressure to grow revenues, key decision makers in your company are feeling the need to say “yes” to any new revenue generating projects. In this tactical environment, resources are scurrying between projects with little focus on the end-game or corporate strategic objectives. The company has no gating process to prioritise project investment based on ROI and your “bucket” of resources for strategic investment is leaking … fast.
8) Nothing new is happening!
Due to the tactical nature of your business there is no clear process for capturing new ideas, prioritising these ideas or bringing them through a gating process. You have a team that have the potential to generate lots of ideas but there is nobody to catch these and prioritise investment.
9) Making decisions in a vacuum?
With a lack of market or customer data product decisions are being made in a vacuum. The company is moving so fast that it cannot recognise that it is in a cul-de-sac.
10) The difference between you and everyone else is … nothing!
Your competitive landscape is crowded and customers are finding it difficult to find compelling reasons to select your company’s products. You struggle to identify unique selling points for the products or solutions and it has become increasingly difficult to position your company competitively.
These indicators can manifest themselves to varying degrees in companies, depending on their stage of growth, but are a useful litmus test for the need to adopt a product management discipline.
Understanding what product management means to your organisation – irrespective of your stage of development product management principles will help to align key stakeholders in your organisation to deliver your growth strategy, supporting you:
- To create scalable and repeatable products or solutions that customers truly value
- To ensure future growth through the continued progression of innovative ideas
- To ensure the organisation is focused – marching not only in the “right direction” but in the “same direction”
- To ensure that the organisation works to a clearly defined business model that meets corporate strategic objectives
- To allocate the finite set of resources available to the company to resource the right projects and achieve maximum return on investment
It is so important though that you seek support when establishing the product management discipline – making any kind of change in an organisation requires alignment from the top down to ensure you draw a line in the sand and take the right approach moving into the future.