5 CEO takeaways: How better Product Management impacts revenue
Updated: Dec 19, 2019
A great Product Manager makes an outsized impact on revenue growth in a technology-powered product company. Along with Sales and Marketing, Products is one of the three core components of the Revenue Engine. Afterall, unless you can field a useful product that customers will pay for, use and keep, it does not matter how good your company can sell and market.
As a CEO, unfortunately, I'm often frustrated and underwhelmed by Product Managers (PMs). In hiring, it's difficult to identify great ones from the mediocre. On paper, their skills sound similar and they list similar accomplishments. In operation, I see PMs deferring vital activities of customer discovery and market expansion to sales and marketing. I see this as lazy PMs but really it's a lack of management and DNA issue.
Last night I was invited to listen to Marty Cagan talk about this issue at the Orange County Product Managers event. Marty's talk helped me put my finger on many of the issues I've experienced building technology-powered companies. If you've not heard of Marty Cagan and his Silicon Valley Product Group, he is a hands-on product management guru. His battlefield experience started with engineering giants like HP, then shifted to heading products at both Netscape and eBay. His fluency and experience today spans the forward-thinking PMs at Amazon, Apple, Google and AirBnB. Those companies who may be coming to eat your lunch.
What's unique about a revenue-impacting Product Manager? Here are a few areas to consider:
Passion for Discovery
Outward facing vs inward facing
Breadth of experience
Passion for Discovery. Note the capital D. We're not talking about Christopher Columbus or Marie Curie, we're talking about Customer and Market Discovery. This is the vital process of learning from your potential buyers about their problems and priorities necessary to shape a successful product quickly. If your PMs are not spending several hours every week talking to customers and continuously testing ideas and prototypes, you don't have Discovery-oriented PMs.
Inward facing vs outward facing. The majority of PMs are inward facing, that is, they work with your engineering to knock down requirements and schedules. This must be done, but it is not Revenue Impacting. Outward facing PMs are the gold. They find ways to go into the field and talk to customers, watch customers do their jobs, survey them, and get reactions to prototypes. Customers love them and they are the gurus of your markets and customers.
Technology background. Innovation appears at the edge of what is technically possible. Cagan cited that the vast majority of innovation comes from the engineering teams. Why? First, engineers are wired as inventors, they are always seeking a better way to solve problems. More importantly, they are passionate about the very latest abilities in their field. For example, what's the edge of possibility in machine learning, what's the level of computer power and storage that the cloud can economically throw at a problem. This edge of what's possible is where your next product and operational break-throughs will come from. The PM doesn't have to invent anything, but they do have to understand the edge, connect the dots between the market needs and the viable. Without this, you wont create many breakthroughs, and you could waste time on products that can't be built, or hit the market with ho hum abilities.
Breadth of Experience. The PM working in Discovery must be the master of many things. Customer needs, market trends, regulatory requirements, legal constraints, licensing limitations, budget, schedule, ability to go-to-market, and sales skills. No, that's not made up. The PM must thread the needle through many complex constraints to bring a successful product to market. As an example, don't build a new product that needs to be sold by a direct sales force when you currently use an online commerce model. Don't build a hardware device that won't pass the various compliance tests required in markets you want to sell in - e.g France, China, India. Don't build a product that can't protect user information privacy appropriate for local markets in the EU, California and other emerging regulated areas.
Continuous Innovator. One clear fact is that software is eating the world. It's the heart of differentiation across many products and industries. The state-of-the art and science of building, marketing and selling software and other tech-powered products is continuously changing, often in rapid disruptive leaps. A PM has to be fundamentally curious, willing and able to adopt new ideas and tools. If you hear words like "we've always done it that way", then pay close attention because you are very likely not going to stay competitive.
PMs are vital to revenue success; recruit and cultivate them with care. Keep in mind that the techniques and tools are evolving rapidly and the need for technology-savvy PMs far outstrips the available good ones. Seek a continuous learner who is passionate about not only the art of Product Management and also your industry and product.