Everything You Wanted to Know about Product Management ( but were afraid to ask!)  Mohanbir Sawhney McCormick Tribune Prof...
Why you should be here today <ul><li>Product management is the most common role that Kellogg marketing majors will find th...
Agenda <ul><li>What is product management?  </li></ul><ul><ul><li>Definition of product management </li></ul></ul><ul><ul>...
Defining product management <ul><li>As a product manager, I have a responsibility to my  customers  (current and future) t...
Defining product management <ul><li>A product manager is a middle manager, usually within the marketing organization, resp...
Perspectives on the role of the product manager <ul><li>The Product Manager needs to know the customers, the market, and c...
Related titles and job roles Product Manager Dow, Cisco, 3M, Medtronic   Company markets relatively  complex  and high-tic...
Agenda <ul><li>What is product management?  </li></ul><ul><ul><li>Definition of product management </li></ul></ul><ul><ul>...
Two faces of product management Voice of The Customer Capabilities of  the Company Inbound Product Development Outbound Pr...
Responsibilities of product managers <ul><li>Inbound Responsibilities  </li></ul><ul><ul><li>Understand customer needs and...
Responsibilities vary by context Maturity of product-market Company Size SMALL LARGE MATURE EMERGING <ul><li>“ Inbound/Str...
Spheres of influence for product managers Market requirements Positioning framework Product launches List pricing/SKUs Fea...
What decisions do product managers influence? 4.46 Corporate Branding & Advertising 4.78 Channel Selection 5.26 Product Ad...
Deliverables for Product Managers Product Conception Product Development  Product Launch Product Sustaining <ul><li>Respon...
Sample MBO for product managers Business Goals Product goals Revenue & Share goals Customer  satisfaction goals Human capi...
Evaluation criteria for product managers <ul><li>Achieving product release milestones </li></ul><ul><li>Meeting volume, sh...
How are product managers evaluated? 80.3% 19.7% Customer Satisfaction 53.1% 46.9% Market Share 38.5% 61.5% Product Profita...
Agenda <ul><li>What is product management?  </li></ul><ul><ul><li>Definition of product management </li></ul></ul><ul><ul>...
Knowledge domains for product managers Product Knowledge Process Knowledge <ul><li>Who  - Customer segments </li></ul><ul>...
What product managers need to know – importance ratings 7.61 Macro environmental knowledge 8.00 Company business knowledge...
Competencies for product managers <ul><li>Ability to think strategically about the product by understanding how the produc...
Personal skills for product managers <ul><li>Passion for the product  </li></ul><ul><li>Intellectual curiosity  </li></ul>...
Agenda <ul><li>What is product management?  </li></ul><ul><ul><li>Definition of product management </li></ul></ul><ul><ul>...
Factors driving product management performance <ul><li>HR Practices </li></ul><ul><ul><li>Influence over development budge...
Dependent variable – product management performance <ul><li>Dimensions of product management performance </li></ul><ul><ul...
Regression model for product management performance
The most admired companies in PM Source: Kellogg PM study 3 2 4   Toyota 11 10 22 7 Sony – #3 6 7   4 Pepsi 18 13 2 10 P&G...
Summary <ul><li>Product managers should be the company’s voice to customers and the customers’ voice to the company </li><...
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    1. 1. Everything You Wanted to Know about Product Management ( but were afraid to ask!) Mohanbir Sawhney McCormick Tribune Professor of Technology Kellogg School of Management Presentation to TMP High-Tech Club April 16, 2007
    2. 2. Why you should be here today <ul><li>Product management is the most common role that Kellogg marketing majors will find themselves in, on their first job. Despite this: </li></ul><ul><ul><li>There is a lot of ambiguity about the roles and responsibilities of product managers in the industry. </li></ul></ul><ul><ul><li>Kellogg currently has no course on product management, so students really don’t know what to expect. </li></ul></ul><ul><li>To plug these gaps, I have been working on a research project aimed at identifying best practices in product management. </li></ul><ul><ul><li>We have conducted depth interviews with 25 product managers in a wide range of companies. </li></ul></ul><ul><ul><li>We have also surveyed 200 product managers to identify the drivers of high-performance product management. </li></ul></ul><ul><li>The purpose of my talk is to share what I have learned in this project, so that you can be better prepared for product management careers. </li></ul>
    3. 3. Agenda <ul><li>What is product management? </li></ul><ul><ul><li>Definition of product management </li></ul></ul><ul><ul><li>Differences in product management across business contexts </li></ul></ul><ul><li>What do product managers do? </li></ul><ul><ul><li>Roles and responsibilities of product managers </li></ul></ul><ul><ul><li>Product management activities across the product life cycle </li></ul></ul><ul><ul><li>Deliverables for product managers </li></ul></ul><ul><ul><li>Important interfaces for product managers </li></ul></ul><ul><li>What makes a good product manager? </li></ul><ul><ul><li>Knowledge domains for product managers </li></ul></ul><ul><ul><li>Key skills and personality traits </li></ul></ul><ul><li>What do high-performance product management organizations look like? </li></ul><ul><ul><li>Determinants of high performance product management organizations </li></ul></ul><ul><ul><li>Most admired companies in product management </li></ul></ul>
    4. 4. Defining product management <ul><li>As a product manager, I have a responsibility to my customers (current and future) to release a product that meets and exceeds their needs – even if they are not fully aware of their needs. I also have a financial responsibility to my company that the product will meet revenue and margin goals. Finally, I have a responsibility to my development team to define a feature set that, if they can deliver it, will meet the first two objectives. </li></ul><ul><li>- John Miniati (Kellogg ’96) </li></ul>
    5. 5. Defining product management <ul><li>A product manager is a middle manager, usually within the marketing organization, responsible for successfully bringing new products (or services/brands) to market and ensuring the ongoing success of existing products over their lifecycle by orchestrating all functional areas that impact the development, manufacturing, sales, and support of products. </li></ul><ul><li>Key points </li></ul><ul><ul><li>Responsible for orchestrating all product-related activities </li></ul></ul><ul><ul><li>Should act as “general mangers” for their products </li></ul></ul><ul><ul><li>Success requires art of influence without authority </li></ul></ul><ul><ul><li>Roles and responsibilities are often ambiguous </li></ul></ul><ul><ul><li>Need to be able to think across functional boundaries </li></ul></ul><ul><ul><li>Business context and organizational culture impacts role definition, responsibilities and authority </li></ul></ul>
    6. 6. Perspectives on the role of the product manager <ul><li>The Product Manager needs to know the customers, the market, and competitive features better than anyone else in the company. Individual developers may know specific areas better, but the Product Manager is the “go-to” person for the product. </li></ul><ul><li>- HP </li></ul><ul><li>Above all, the Product Manager must understand the customer and the product. They, more than anyone, must know the range of functionality for a particular product and be true experts. For example, how it works, what it does, how to do X or Y. They must continually ask questions such as, Is it “drop dead simple”? Intuitive? Easy to use? How are customers using it today? What are the issues or problems from the customer’s perspective? </li></ul><ul><ul><li>- Intuit </li></ul></ul><ul><li>In technology companies, developers are like oarsman in Viking longships – you don’t get very far without them. Moreover, they tend to be very creative, hard-working, and strong-willed. They WILL build a product without a product manager. My job is to make sure that the product they build is the right product for the customers, because – more than money – developers want to be part of the ‘next Palm’ or the ‘next Cisco router’. - Startup firm </li></ul>
    7. 7. Related titles and job roles Product Manager Dow, Cisco, 3M, Medtronic Company markets relatively complex and high-ticket price products in technology or industrial markets. The products require focused attention to be successful, and technology is a key driver of product success. Brand Manager Category Manager P&G, Marriott, Pfizer, Toyota Company markets a broad range of consumer packaged goods products under a few key brand names. Brands are leveraged across several product categories, and there may be multiple brands within a category. Product Development Manager New Products Manager HP, 3M New-product efforts are time-consuming and critical for the company, to the point where a special position is created exclusively to handle new products . Key Account Manager All enterprise marketers Company’s customer base is characterized by a few large customers , each with relatively specific customization, service and support needs, as well as a customized selling approach. Market manager Segment manager Fidelity, Thomson Financial, IBM Company sells a diverse array of products to a relatively small number of customer segments . Segments overlap significantly across products. Products need to be combined into customer solutions for each segment. Product Manager Role Business Context
    8. 8. Agenda <ul><li>What is product management? </li></ul><ul><ul><li>Definition of product management </li></ul></ul><ul><ul><li>Differences in product management across business contexts </li></ul></ul><ul><li>What do product managers do? </li></ul><ul><ul><li>Roles and responsibilities of product managers </li></ul></ul><ul><ul><li>Product management activities across the product life cycle </li></ul></ul><ul><ul><li>Deliverables for product managers </li></ul></ul><ul><ul><li>Important interfaces for product managers </li></ul></ul><ul><li>What makes a good product manager? </li></ul><ul><ul><li>Knowledge domains for product managers </li></ul></ul><ul><ul><li>Key skills and personality traits </li></ul></ul><ul><li>What do high-performance product management organizations look like? </li></ul><ul><ul><li>Determinants of high performance product management organizations </li></ul></ul><ul><ul><li>Most admired companies in product management </li></ul></ul>
    9. 9. Two faces of product management Voice of The Customer Capabilities of the Company Inbound Product Development Outbound Product Marketing Convert the value proposition into a market offering Take the offering and the value message to market
    10. 10. Responsibilities of product managers <ul><li>Inbound Responsibilities </li></ul><ul><ul><li>Understand customer needs and requirements </li></ul></ul><ul><ul><li>Understand the market and competition for the product </li></ul></ul><ul><ul><li>Research feature enhancements and upgrades for future releases </li></ul></ul><ul><ul><li>Create Marketing Requirements Document (MRD) </li></ul></ul><ul><ul><li>Create the product release plan </li></ul></ul><ul><ul><li>Help to develop product roadmap and competitive positioning </li></ul></ul><ul><ul><li>Work with development, testing, and QA to ensure that product meets requirements and stays within schedule </li></ul></ul><ul><li>Outbound Responsibilities </li></ul><ul><ul><li>Manage product launch </li></ul></ul><ul><ul><li>Support marketing with outbound marketing communication and PR </li></ul></ul><ul><ul><li>Support sales with product training, demos, customer presentations, data sheets, competitive positioning </li></ul></ul><ul><ul><li>Support sales on key customer deals and accompany sales personnel on key customer visits </li></ul></ul><ul><ul><li>Monitor and improve customer satisfaction </li></ul></ul>
    11. 11. Responsibilities vary by context Maturity of product-market Company Size SMALL LARGE MATURE EMERGING <ul><li>“ Inbound/Strategic” </li></ul><ul><li>Inbound-heavy role </li></ul><ul><li>Close interaction with engineering </li></ul><ul><li>Defining target markets </li></ul><ul><li>Generating customer wins </li></ul><ul><li>Broad authority and influence </li></ul><ul><li>Ability to think strategically </li></ul><ul><li>“ Outbound/Tactical” </li></ul><ul><li>Outbound-heavy role </li></ul><ul><li>Understanding of product </li></ul><ul><li>Understanding of vertical markets </li></ul><ul><li>Less authority and direct influence </li></ul><ul><li>Ability to manage interfaces </li></ul><ul><li>Ability to communicate internally </li></ul>Market Maturity
    12. 12. Spheres of influence for product managers Market requirements Positioning framework Product launches List pricing/SKUs Feature prioritization Actual pricing and margins Product packaging Corporate branding Corporate advertising R&D Channel promotions Consumer promotions Customer support Partner marketing Field sales
    13. 13. What decisions do product managers influence? 4.46 Corporate Branding & Advertising 4.78 Channel Selection 5.26 Product Advertising 5.15 Channel and Partner Promotions 5.48 Consumer Promotions 5.62 Customer Segmentation 6.31 Product Packaging/SKU Decisions 6.28 Product Pricing 6.44 Managing Launch Events 6.28 Product Upgrade Decisions 6.93 Product Positioning 6.96 Managing Product Releases 7.23 Defining Product Specifications Product Manager Influence (1-None, 10- Complete) Decision
    14. 14. Deliverables for Product Managers Product Conception Product Development Product Launch Product Sustaining <ul><li>Responsibilities: </li></ul><ul><li>Sales training </li></ul><ul><li>Customer promotions </li></ul><ul><li>Trade promotions </li></ul><ul><li>Product updates </li></ul><ul><li>Next version planning </li></ul><ul><li>Interfaces: </li></ul><ul><li>Customers </li></ul><ul><li>Engineering </li></ul><ul><li>Tech support </li></ul><ul><li>Sales </li></ul><ul><li>Partners </li></ul><ul><li>Responsibilities: </li></ul><ul><li>Product introduction plan </li></ul><ul><li>Customer demos </li></ul><ul><li>Refined forecasts </li></ul><ul><li>Sales training </li></ul><ul><li>Press kits </li></ul><ul><li>Trade shows </li></ul><ul><li>Events collateral </li></ul><ul><li>Promotion/Advertising </li></ul><ul><li>BOM/Inventory </li></ul><ul><li>Interfaces: </li></ul><ul><li>Customers </li></ul><ul><li>Sales </li></ul><ul><li>Analysts </li></ul><ul><li>Press </li></ul><ul><li>Engineering </li></ul><ul><li>Finance </li></ul><ul><li>Tech support </li></ul><ul><li>Responsibilities: </li></ul><ul><li>Refine market requirements </li></ul><ul><li>Customer research </li></ul><ul><li>Trade-off schedule vs. features </li></ul><ul><li>Interfaces: </li></ul><ul><li>Engineering </li></ul><ul><li>Customers </li></ul><ul><li>Partners </li></ul><ul><li>Responsibilities: </li></ul><ul><li>Market research </li></ul><ul><li>Target market definition </li></ul><ul><li>Competitive analysis </li></ul><ul><li>Positioning </li></ul><ul><li>Market Requirements </li></ul><ul><li>Forecasts </li></ul><ul><li>Interfaces: </li></ul><ul><li>Customers </li></ul><ul><li>Research firms </li></ul><ul><li>Engineering </li></ul><ul><li>Finance </li></ul><ul><li>Sales </li></ul>
    15. 15. Sample MBO for product managers Business Goals Product goals Revenue & Share goals Customer satisfaction goals Human capital/ Team goals <ul><li>Meet ship dates </li></ul><ul><li>Demo data and scripts </li></ul><ul><li>Quality documentation </li></ul><ul><li>Bug prioritization </li></ul><ul><li>MRDs for next release </li></ul><ul><li>Support sales in deals </li></ul><ul><li>Customer presentations </li></ul><ul><li>Demo materials </li></ul><ul><li>Training courses for sales </li></ul><ul><li>Customer data sheets </li></ul><ul><li>Train sales force on product </li></ul><ul><li>Market share goals </li></ul><ul><li>Revenue goals </li></ul><ul><li>Margin goals </li></ul><ul><li>Reference customers </li></ul><ul><li>Customer satisfaction score goals </li></ul><ul><li>Satisfaction goals by segment </li></ul><ul><li>Bridge perceived functionality gaps </li></ul><ul><li>Action plans for “at-risk” customers </li></ul><ul><li>Link bonus comp. to satisfaction </li></ul><ul><li>Satisfaction relative to competition </li></ul><ul><li>Recruitment goals </li></ul><ul><li>Product training goals </li></ul><ul><li>Training & certification </li></ul><ul><li>Employee satisfaction goals </li></ul><ul><li>Performance feedback </li></ul>Sales support goals
    16. 16. Evaluation criteria for product managers <ul><li>Achieving product release milestones </li></ul><ul><li>Meeting volume, share, and revenue goals </li></ul><ul><li>Accuracy of sales forecasts </li></ul><ul><li>Level of customer satisfaction </li></ul><ul><li>Evaluation of cross-functional partners (internal) </li></ul><ul><li>Speed of resolution of escalations </li></ul><ul><li>Creativity and initiative </li></ul>
    17. 17. How are product managers evaluated? 80.3% 19.7% Customer Satisfaction 53.1% 46.9% Market Share 38.5% 61.5% Product Profitability 37.8% 62.2% Product Revenues No Yes Evaluation Metric
    18. 18. Agenda <ul><li>What is product management? </li></ul><ul><ul><li>Definition of product management </li></ul></ul><ul><ul><li>Differences in product management across business contexts </li></ul></ul><ul><li>What do product managers do? </li></ul><ul><ul><li>Roles and responsibilities of product managers </li></ul></ul><ul><ul><li>Product management activities across the product life cycle </li></ul></ul><ul><ul><li>Deliverables for product managers </li></ul></ul><ul><ul><li>Important interfaces for product managers </li></ul></ul><ul><li>What makes a good product manager? </li></ul><ul><ul><li>Knowledge domains for product managers </li></ul></ul><ul><ul><li>Key skills and personality traits </li></ul></ul><ul><li>What do high-performance product management organizations look like? </li></ul><ul><ul><li>Determinants of high performance product management organizations </li></ul></ul><ul><ul><li>Most admired companies in product management </li></ul></ul>
    19. 19. Knowledge domains for product managers Product Knowledge Process Knowledge <ul><li>Who - Customer segments </li></ul><ul><li>Why - Customer needs </li></ul><ul><li>Where – End-use scenarios </li></ul><ul><li>How often – Usage levels </li></ul><ul><li>Why not – Usage barriers </li></ul><ul><li>Who else – Customer DMU </li></ul><ul><li>How – Customer DMP </li></ul><ul><li>Purchase drivers </li></ul><ul><li>Upgrade drivers </li></ul><ul><li>Installation experience </li></ul><ul><li>Usage experience </li></ul><ul><li>Customization experience </li></ul><ul><li>Support experience </li></ul><ul><li>Upgrade experience </li></ul><ul><li>Partner/VAR experience </li></ul><ul><li>Unmet needs </li></ul><ul><li>Known product problems </li></ul><ul><li>Known service problems </li></ul><ul><li>Brand/company image </li></ul><ul><li>Customer satisfaction </li></ul>Market Knowledge <ul><li>Company values </li></ul><ul><li>Company vision/strategy </li></ul><ul><li>Company image/brand </li></ul><ul><li>Vision of the business </li></ul><ul><li>Goals of the business </li></ul>Customer Knowledge Business Knowledge <ul><li>“ What it does” </li></ul><ul><li>“ What it needs to do” </li></ul><ul><li>Product functionality </li></ul><ul><li>Product roadmap </li></ul><ul><li>Product architecture </li></ul><ul><li>Core technology </li></ul><ul><li>Product bugs/gaps </li></ul><ul><li>Product usability </li></ul><ul><li>Complementary products </li></ul><ul><li>Competing products </li></ul><ul><li>Key demand trends (by segment) </li></ul><ul><li>Key technology trends </li></ul><ul><li>Key alliances/partnerships </li></ul><ul><li>Competitive products </li></ul><ul><li>Competitors’ motivations </li></ul><ul><li>Potential competitors </li></ul><ul><li>Strengths/weaknesses (company) </li></ul><ul><li>Strengths/weaknesses (product) </li></ul><ul><li>Strengths/weaknesses (partners) </li></ul><ul><li>Strengths/weaknesses (brand) </li></ul><ul><li>Customer insight process </li></ul><ul><li>MRD development process </li></ul><ul><li>Product planning process </li></ul><ul><li>Budgeting process </li></ul><ul><li>Product development process </li></ul><ul><li>Product testing process </li></ul><ul><li>Product launch process </li></ul><ul><li>Partner management process </li></ul>
    20. 20. What product managers need to know – importance ratings 7.61 Macro environmental knowledge 8.00 Company business knowledge 8.21 Competitor knowledge 8.65 Product knowledge 8.81 Customer knowledge Importance (10 point scale) Knowledge Domain
    21. 21. Competencies for product managers <ul><li>Ability to think strategically about the product by understanding how the product fits into the company’s business </li></ul><ul><li>Ability to clearly define and communicate the vision, goals, and value proposition of the product from the customer perspective </li></ul><ul><li>Ability to understand customer requirements, and to map customer requirements into product specifications and features </li></ul><ul><li>Ability to understand technology broadly (architectural knowledge) as well as deeply (inner workings) to dialog effectively with developers </li></ul><ul><li>Ability to evaluate cost/quality/time-to-market trade-offs and to make appropriate trade-off decisions under uncertainty </li></ul><ul><li>Ability to effectively communicate with, tactfully collaborate with, and forcefully convince people in diverse functional areas </li></ul><ul><li>Ability to analyze data and trends to produce effective plans and accurate forecasts </li></ul><ul><li>Ability to juggle competing demands on time and to prioritize activities </li></ul>
    22. 22. Personal skills for product managers <ul><li>Passion for the product </li></ul><ul><li>Intellectual curiosity </li></ul><ul><li>Communication skills </li></ul><ul><li>Listening skills </li></ul><ul><li>Negotiation skills </li></ul><ul><li>Analytical skills </li></ul><ul><li>Selling skills </li></ul>
    23. 23. Agenda <ul><li>What is product management? </li></ul><ul><ul><li>Definition of product management </li></ul></ul><ul><ul><li>Differences in product management across business contexts </li></ul></ul><ul><li>What do product managers do? </li></ul><ul><ul><li>Roles and responsibilities of product managers </li></ul></ul><ul><ul><li>Product management activities across the product life cycle </li></ul></ul><ul><ul><li>Deliverables for product managers </li></ul></ul><ul><ul><li>Important interfaces for product managers </li></ul></ul><ul><li>What makes a good product manager? </li></ul><ul><ul><li>Knowledge domains for product managers </li></ul></ul><ul><ul><li>Key skills and personality traits </li></ul></ul><ul><li>What do high-performance product management organizations look like? </li></ul><ul><ul><li>Determinants of high performance product management organizations </li></ul></ul><ul><ul><li>Most admired companies in product management </li></ul></ul>
    24. 24. Factors driving product management performance <ul><li>HR Practices </li></ul><ul><ul><li>Influence over development budget </li></ul></ul><ul><ul><li>Degree of empowerment </li></ul></ul><ul><ul><li>Clear career paths </li></ul></ul><ul><ul><li>Clear evaluation metrics </li></ul></ul><ul><li>Authority and Knowledge </li></ul><ul><ul><li>Extent of early involvement in product development </li></ul></ul><ul><ul><li>Ownership over product specifications </li></ul></ul><ul><ul><li>Level of Technical knowledge </li></ul></ul><ul><ul><li>Accountability for product quality </li></ul></ul><ul><ul><li>Accountability for financial performance </li></ul></ul><ul><ul><li>Viewed as General Managers </li></ul></ul><ul><li>Organization Design </li></ul><ul><ul><li>Presence of organizational silos </li></ul></ul><ul><ul><li>Poor cross-functional coordination </li></ul></ul><ul><ul><li>Short-term orientation </li></ul></ul><ul><ul><li>Decentralized and autonomous SBUs </li></ul></ul><ul><ul><li>Unclear role definition </li></ul></ul><ul><li>Customer orientation </li></ul><ul><ul><li>Level of customer contact </li></ul></ul><ul><ul><li>Quality of coordination with sales </li></ul></ul><ul><ul><li>Knowledge of customer needs </li></ul></ul>
    25. 25. Dependent variable – product management performance <ul><li>Dimensions of product management performance </li></ul><ul><ul><li>Ability to understand and anticipate customer needs </li></ul></ul><ul><ul><li>Innovative products and technologies </li></ul></ul><ul><ul><li>Quality of product marketing activities </li></ul></ul><ul><ul><li>Overall quality of product management </li></ul></ul>
    26. 26. Regression model for product management performance
    27. 27. The most admired companies in PM Source: Kellogg PM study 3 2 4   Toyota 11 10 22 7 Sony – #3 6 7   4 Pepsi 18 13 2 10 P&G - #2 1 1 6 1 Nokia 4 5 3 1 Nike 12 15 18 20 Microsoft – #1 3 2 2 5 IBM 4 3 1 4 General Motors 5 7 8 14 GE - #4 7 10 6 8 Dell - #5 5 8   6 Coca Cola 2 9 8 3 Apple 5 3 6 8 3M Best Overall at Product Management Does the best job at Product Marketing Has the Most Innovative Products Good at Understanding Customer Needs Company
    28. 28. Summary <ul><li>Product managers should be the company’s voice to customers and the customers’ voice to the company </li></ul><ul><li>Product managers need to master the “art of influence” as they orchestrate all activities related to the product </li></ul><ul><li>A good product manager should be the “go-to” person for her product. </li></ul><ul><li>A good product manager should be able to communicate the product’s value proposition persuasively to internal and external customers </li></ul><ul><li>Effective product management requires clear definition of roles, empowerment, and solid execution processes. </li></ul><ul><li>Kellogg MBAs are ideally positioned to become product managers, because of their team skills and their general management orientation. </li></ul>
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