Digital transformations often focus on new technologies, agile practices, and new business models. While these are undoubtedly important, a further success factor is sometimes overlooked: product management. In this article, I share my tips for establishing an effective product management function to achieve a successful digital transformation, offer the right customer experience, and help unlock the organisation’s innovation potential.
Recognise the Importance of Product Management
A digital transformation is a major change program that helps a company succeed in the digital age. Embracing new technologies like machine learning, micro services, big data, and Internet of Things (IoT) is part of that change, as is the introduction of agile practices including cross-functional and self-organising teams, DevOps, Scrum, and Kanban. Business models also tend to change when companies digitalise their business—customer relationships, pricing models, partner and supplier relationships, cost factors, and other aspects are likely to be affected.
But to take advantage of new and existing digital assets, align them with physical products and services and create a seamless user experience, and increase the overall value created, companies require product professionals—dedicated, qualified product people who look after the digital assets.
For some companies, this means introducing a new department or group, creating new roles, and career plans. That’s often the case in my experience for businesses in finance, media, travel, insurance, and other verticals that traditionally don’t have product management groups, and where product management is not represented at the executive level.
Note that employing people who are called product owners or product managers does not necessarily mean that a product management function exists. I have seen more than one business that called their project managers and team leads “product owners”, but failed to give the individuals true ownership of the products and equip them with the necessary skills to manage them. The changes required to establish a product management group are far from trivial, and they require executive management support, as I discuss in more detail below.
Companies with an existing product management group usually require up-skilling and retraining their product people, as well as adjusting roles and responsibilities and career plans. This helps the individuals embrace an agile mindset, take advantage of new techniques and tools—think of hypotheses-driven strategy validation, goal-oriented product roadmaps, and user stories—and effectively collaborate with the agile development teams. Additionally, companies need to consider how the individuals in charge of digital products collaborate with those responsible for the revenue-generating goods and services. While these changes are not as deep as introducing a new product management group, they still need to be carefully managed.
Define Clear Product Roles and Responsibilities
One of my clients called everyone in charge of a feature, product, and portfolio a “product owner” at the start of their digital transformation. Consequently, people were confused and unsure what it meant to play the role, and the organisation’s learning and development program wasn’t effective. This example is representative for many companies in my experience: product roles are often applied ineffectively.
As I have argued before, a product owner or product manager should be in charge of a product—an asset that creates value for a group of users and the business. The individual should manage the product for an extended period of time, usually for several life cycle stages, not just a few weeks or months. This creates continuity of purpose, facilitates learning, and reduces wasteful handoffs.
Individuals who own part of a product are not product but feature or component owners in my mind. They have an important job too, but their responsibilities differ: they are focused on their specific feature or architecture building block rather than trying to increase the value the entire product creates. People who look after a group of products are not product owners either, they are portfolio owners or managers.
To get the roles definition right, start by identifying the company’s products. Consider the revenue generating assets as well as the supporting ones. Take, for example, an insurance policy that helps people protect their home, and the digital products that help customers select and buy the right policy. Then align the physical and digital assets to create a consistent user experience, no matter if the policy is bought online or in a branch, for instance.
Finally, ask yourself who should own each product, and how many teams are required to develop the product. You may consequently have to identify additional people with more specialised roles like feature and component owner who support the overall product owner or manager of the larger offerings.
Determine the Right Learning and Development Measures
Once you have the right roles in place, take the next step and determine the necessary skills for each role. While there is likely to be some overlap, different roles have different skills profiles. A component owner, for example, typically requires strong technical skills, as the person will have to help specify interfaces and APIs. Strategy and leadership skills are nice-to-have but not mandatory. A portfolio owner, however, requires strong strategy and leadership capabilities including the ability to develop a portfolio strategy and align powerful individuals.
With the desirable skills in place, assess the actual capabilities of the people who will play the different product roles, for example, by using my product management test. Identify gaps and weaknesses that prevent the individuals from doing a great job. Then determine the right learning and development measures. These may include instructor-led in-class and online training, self-study using books, videos, and articles, and coaching sessions provided by senior product people or product coaches.
Take into account people’s learning preferences and constraints to find the most effective measures for each individual. Avoid generic, cookie-cutter approaches. Don’t expect that a single two-day training course will equip people with everything they need to know; it won’t.
Being an effective product person is a demanding job that requires a broad range of skills. It therefore takes time for people to grow into a new product role, particularly when they are new to product management. While you can support people’s learning journey, you cannot speed it up at will. Your best bet might therefore be to hire external talent in addition to developing current employees.
Make the Necessary Organisational Changes
Introducing a new product management group or adapting an existing one people requires organisational changes. These range from establishing a product culture to empowering the product people, giving them the necessary decision-making authority.
Several years ago, I was working with a large insurance company. At the beginning of my first workshop, I asked the attendees to tell me which products they were managing. “What do mean?” was the answer I received, “We don’t manage products. We do software, not insurance policies.” There was no common understanding that software assets can be regarded as products in their own right and should be managed accordingly. Instead, the organisation employed projects that usually changed a number of different digital products. A project lasted typically just three months, and after working on it, the so-called product owner and the dev team members would be assigned to new projects. If this story sounds familiar, then your company should consider changing the way it operates and organise around products—rather than projects.
At another client, the newly created product management group looked after the tactical aspects of the company’s offerings. But senior management continued to make the portfolio and product strategy decisions. Needless to say, this work spilt was ineffective and frustrated the product managers who ended up looking after their backlogs rather than being allowed to take charge of their products, innovate, and create more value. Management lacked the understanding that product people must own the strategic product decisions in addition to the tactical ones, and that senior and executive management should guide product people using a business strategy.
If you want to succeed with digital products, you must not only find the right people and help the acquire the right skills. You must also give them the necessary authority. Product owners that are not empowered do not own their products; they are product administrators or project managers in disguise. Additionally, product management must be represented at the executive level, and not hidden inside IT/development or another business unit. This may require hiring an experienced product leader who acts as the head of product and leads the development of an effective product management group.
To make the necessary changes, you usually require executive management support. The executive leading the digital transformation may also sponsor the introduction or strengthening of product management, and explicitly state it as one of the major transformation objectives. Alternatively, the CEO or managing director makes a great sponsor.
Establish a Product Community of Practice
Building an effective product management function is never done; it’s an ongoing process. New people join the organisation, experienced people leave or move into new job roles; tools and techniques change; new trends emerge. To make things worse, product management is a comparatively young profession, certainly when it comes to digital products, and we lack standards other professions take for granted.
Take the product roadmap, for example. Different people have different ideas what a roadmap is, and how it should be represented and communicated. We even call the same product roadmap type different names: goal-oriented, theme-, benefit-, and outcome-based roadmap. It is therefore important that you develop and advance product management norms and standards at your company, and agree for instance, if and when you will use a roadmap that works with goals/benefits/outcomes, which template you will employ, and which term you will use. These standards should define how product management is practiced at the company and serve as a blue print for new product people.
Creating a community of practice or guild is a great way to help product people develop and advance shared practices and to facilitate learning and networking. Nobody can be an expert in all aspects of product management, as it is such a diverse and evolving discipline.
Brown bag lunches, open-space sessions, failure swap-shops, and internal product management conferences are sample measures that help create and sustain a product community. The key is to give people the time and space to interact and learn from each other. The head of product is usually the right person to sponsor and shepherd the community of practice, and help the group evolve their practices.
Additionally, consider developing in-house product coaches and mentors who can teach junior product people and help with community building. These may be some of the senior product people including the head of product, or dedicated coaches who used to be practicing product owners or managers. While you may find that you require external product coaches and trainers to up-skill people when creating a new product management group or when new trends and techniques emerge, you should not depend on them for an extended period of time. Product management is a crucial business function. You therefore want to have the right capabilities inside your organisation.