I stole this title line from someone on Twitter much more comically nimble than I, but I just couldn’t resist.  As many of you know, the members of the B2B Product Makers team are working on ProductCamp Chicago. I’m on the committee that is organizing the event, Thierry is going to be presenting on leadership via influence and Josh is going to talk about effective pricing practices.  Both excellent topics – I plan to attend and contribute.

I want to take a few minutes and explain why we got this whole thing started. When I joined Twitter and finally figured out that there was a wealth of product management wisdom available by following the #prodmgmt tag, I noticed that everyone was tweeting about something called ProductCamp. I searched the web for it and found that there was a large community participating in this event in many different cities.

I searched for anything related to ProductCamp Chicago and was really disappointed to find nothing.  I tweeted out a request for a link to ProductCamp Chicago and got several tweets back indicating that, by asking about ProductCamp Chicago, I had just volunteered to start up the first one.  When I tweeted out that I was more than happy to found the ProductCamp Chicago community, I received replies from the four other co-founders almost immediately.   So I knew that we had the means and the interest for a great “unconference”.

So that’s how we got this started – but why?  We started this up for the same reason that I joined the B2B Product Makers blogging team –  to discuss product management topics in a forum where people can both contribute and learn.  When I first spoke with Thierry about this blog, he made it very clear that this blog was not about broadcasting our ideas as much as starting intelligent conversations and encouraging insightful participation.  There are no egos here – it’s all about gathering as many points of view as possible and learning as much as we can.

I see ProductCamp as the same concept.  When I present a topic at ProductCamp Chicago, I expect that some in the audience will have strong objections and I want to hear those objections.  I want to learn their perspective on the issue and incorporate their thinking into my point of view.  In my opinion, the worst thing a product manager can do is to close himself or herself off to new ideas and concepts.  Active participation in ProductCamp can save you from this fate – as will active participation in online discussions, such as the ones on this blog.

This concept is furthered by the idea that ProductCamp is an unconference.  We’ll have many sponsors, but those sponsors understand that they cannot influence the topics presented at ProductCamp.  This way we won’t have content that is slanted towards buying a product or using a service. This also helps because this will ensure that we have 100% fresh content.  The content at ProductCamp isn’t recycled content that you heard from the same vendor at a different conference.  Its going to be fresh and relevant content because if its not, people are not going to participate and will probably walk out on it.

The final reason we wanted to start this is because we need it in Chicago.   Chicago doesn’t have as strong of a Product Management community as does Silicon Valley, Austin, Boston or Seattle, although we have an exceptional amount of PM talent here.   We expect that this conference is going to show the level of talent we have as well as the diversity of Product Management in the Midwest.  We’ll have software, technology and biotech product managers as well as participation from three of the best business schools in the country.  I think we have the ingredients for an incredible experience. We really hope to see you there.

I also just want to give a quick shout out to the four other co-founders – Joshua Steffan, Parissa Behina, Roshan Shankar and Shawn Emery.  When ProductCamp Chicago is a roaring success, it will be due to their intelligence, tenacity, creativity and sheer will.  It’s a true honor and pleasure to work with them.

When it comes to innovation, I have been guilty of thinking only in one dimension. I have mostly focused only on new features and functionality changes in my products that differentiate it from the competition. I know I am not the only product manager with this limitation.

However, not envisioning a new initiative as a whole new business process may result in failure. A good product may target the wrong buyer in the right segment, a marketing message could hit the wrong audience, a sales force may react negatively to your new solution.

So it is worth mentioning when a tool is available to help product managers think more systematically at an early stage of their innovation process.

Such is the case with the “Innovation Radar” presented in a complete fashion in “Grow from Within”, a book from Robert C. Wolcott and Michael J. Lippiz published in 2009. The Innovation Radar forces you to look at innovation in 12 different ways and encourages product managers to adopt a comprehensive view of their innovation initiative. The book is tackling a more general topic: investigate what makes an intrapreneur successful and the innovation radar is only a chapter of the book. Great read nonetheless.

The goal of this post is not to extensively discuss the model, as I could not do it as well as the authors.  However, in this post, I will provide a brief description of the Innovation Radar and help you imagine how you can apply the model to:

• Innovate with your existing products
• Build a comprehensive approach for developing new products
• Anticipate avenues that your competitors could take

So in order to discuss the Innovation Radar, please look at the illustration above, which is directly taken from the book. There are 4 major dimensions, Offering (What), Customers (Who), Processes (How) and Presence (Where). The other 8 dimensions are distributed between these 4 dimensions based on their type of impact. For example, the customer experience is obviously between “Customers” and “Process.” Let’s go through each dimension, with a short explanation and a few questions you can ask yourself about it:

1 Offerings: Creating unique products or services that are valued by customers. What unique architecture or feature set can we bring to our customers? That’s the dimension most of us focus on.

2 Platforms: Common components which can be developed and reused for multiple markets or customers. What are the common technologies, architectures and modules which can be shared by my customer base to reduce my costs?

3 Solutions: Customized, integrated set of products and services to solve a customer’s specific business problem. Can I package my offering differently in order to simplify, bring more flexibility, or reduce cost  in order to attract different buyers?

4 Customers: Discover new customer categories, different buyer personas, or unmet/unarticulated needs. Could there be unidentified business problems your customers may be facing?Is there an unserved up- or down-market?

5 Customer experience: Everything each actor in the sales cycle and end users see or feel about your product and your company. What collateral would resonate with my audience? Can I simplify the user interface to address a new segment? What type of support do I need for this new audience?

6 Value Capture: The mechanisms a company creates to earn its share of the market. How can we redesign the sales cycle in increase our margins? What pricing model leads to optimal profit margin?

7 Processes: The configuration of business activities to conduct operations. How can I reorganize support to reduce costs? Can I develop a single methodology which can be reused for a specific class of services?

8 Organization: How the company structures itself to respond to the needs of the customer. Will this new concept benefit from an internal, separate organization that can execute faster? Are the proper incentives in place to ensure that each team member delivers on the strategy?

9 Supply Chain: The method to deliver product and services. What could be automated, or configured by the customer to provide faster delivery, cheaper cost or improved flexibility?

10 Presence: Channels employed by the company to bring the offering to the market. Should I replace my “farmers” account managers by “hunters”? How can I integrate my offering into a partner’s larger solution and use that partner as a new channel?

11 Network: How a company or product can connect to the customer to improve the value of the product. Can different types of users in my installed base benefit from my existing products? What interfaces should I build to leverage a partner’s solution and unleash new value for my customer?

12 Brand: Symbols, words or marks used by a company to communicate a promise or an image to the customer. How can the company’s brand be leveraged to reinforce the new concept? Would my audience feel that the innovation falls naturally within the brand, or would it be considered a stretch?

The true value of the tool is that, when used correctly, it forces you to envision many of your innovative product’s implications upfront.

Gather a multidisciplinary team in one room for a brainstorming session and go through a series of questions which you will have carefully prepared in advance for each dimension listed above. Be careful not to lead your audience or you will kill creativity. Together, in a few hours and under your lead, the team can minimize the surprises your innovation will produce and define what’s needed, rather than forcing you to operate later with a set of options limited by your budget and time-to-market imperatives. That could mean the difference between success and failure. And maybe you may even find new ways to innovate in the process.

From my experience, value-based pricing is one of the most often used, yet least understood concepts in product management. While deceptively simple on the surface, most product managers have trouble turning it into something concrete. Sure it makes sense that a good product should provide value to the customer, but trying to get a handle on this is like trying to catch smoke with your bare hands. Luckily, this task is a bit easier for those of us in the B2B space since we don’t typically have to be overly concerned with the fuzzy intangibles so important in B2C like how our brand will help the consumer achieve their personal goals, laddering up to get closer to the consumer’s core values, and all that noise. But even still, understanding how your product can help a customer improve their business does not automatically translate into a price point.

Economic Value to the Customer (EVC), a concept I mentioned in a previous post, can be of great help in this situation – especially when you’re working on pricing a new product and you don’t have the luxury of existing sales data to calculate a demand curve (not that this is exactly easy either). Once you’ve completed the EVC framework for your product you’ll be able to use it to help diagnose why sales are slow, assist sales force personnel in negotiations and even determine which enhancements will result in the largest gains in customer willingness to pay.

The basic premise behind EVC is that consumers buy not just on price, but on the basis of the economic value that the price represents. This means that customers attempt to discern the Net Value of your product. For those that are mathematically inclined, you can think about it like this:

After customers gather information about all the options in the marketplace, they will (quite logically) select your product only if it proves to yield the highest Net Value relative to competing offerings. Reordering variables shows us that the price you charge for the product, therefore, must be less than or equal to the sum of the Differentiation Value (∆V) and the Reference Value (R). The Reference Value is the price of what customers view as best substitute and the Differentiation Value is the value to the customer (both positive and negative) of any differences between your offering and the reference product.

Said another way, a product’s total economic value is the price of the customer’s best alternative (the Reference Value) plus the economic value of whatever differentiates the offering from the alternative (the Differentiation Value).

Of the times that I’ve used EVC, one case illustrates the process extremely well. I was launching a bundle of web services that allow third-party service providers to automate receiving work assignments from their customers. Prior to this solution, the only alternative was a manual process, so in other words, the Reference Value was the cost associated with employing staff to manage the work conducted between the two companies. Through a number of conversations with managers at these firms I was able to uncover the fully loaded cost per employee as well as the ratio of employees relative to work volume on the average. These details unlocked the cost of the manual process and hence, the Reference Value.

The Differentiation Value consisted of a number of components. First, the new system would require an up-front investment in information technology to implement the web service interface. So relative to the manual approach, this was a negative – remember that your product will probably have pros and cons when compared to the competition. Benefits over the manual approach included reduced headcount, improved performance (increased throughput) and improved quality.

Once you have these details, calculating the Willingness To Pay (WTP) is fairly straight forward. Simply sum the dollar value of the cost savings generated from the labor reduction and the value of the productivity and quality gains. This exercise yields the maximum WTP. Note! This isn’t the price, but rather the amount at which the customer would be indifferent between the manual process and the web services. You’ll want to set the price below the maximum in order to share some of the value created with your customer and entice them to make the purchase. Economists know this as Consumer Surplus.

As you can see, the process of measuring your Differentiation and Reference Values isn’t exactly a plug-n-chug operation. Applying EVC necessitates effort and creativity, which requires you to think broadly about the sources of value for your product. Usually, in the B2B space economic value can be expressed as revenues gained or costs avoided by purchasing the product. This means you need to truly understand your customer’s business and how your product will impact it. Only then will you be able to determine if your pricing is doing a good job of getting a piece of the value your product is delivering to the customer.

In this economy, you spend so much time trying to find and land a Product Management position. So what happens when you get an opportunity?  How should you decide if you are going to take a job or not?  There are a few factors that we consider when we look at a possible position.

Respect: When you join, you will get the benefit of the doubt for a while but you will need to earn the respect of your co-workers and this may take a while. But this may never happen if the product management organization is not respected in your company.

P/L Ownership:  The holy grail of Product Management – everyone wants it, but only the senior guys get it.  If you get P/L ownership, then you know that you will be playing a key role in the product and the company.  But what if, like most of us, you don’t get it?  That doesn’t necessarily mean that you should skip the position. You should, however, question seriously how much influence you are going to have on your product.  Are you going to be the one developing the product budget for executive review?  Are you going to be the one proposing prices and sales incentives?  If so, while you don’t own the P/L, you really have a significant influence on it.

One other factor to consider for the P/L: Many companies may not have the data available or accounting processes in place to deliver on the promise of P/L control.  Be sure you understand how they track costs and revenue before you accept a promise of P/L control.

Process: Does this company use any type of process in their Product Management discipline?  This is going to tell you two things:  First, how mature their Product Management organization is.  If they have been around for a while or have some experienced people, they are going to have a process of some sort.  Second, how seriously executive management takes PM.  Process creation and execution is expensive and only pays for itself in the long run.  The only way that you can get a solid process in place is with executive sponsorship.

Risk Profile: You may assume that companies with a well-defined process make product decisions quickly and efficiently, but this isn’t necessarily the case. Each company has a different level of comfort with risk which usually plays out in the speed of their product investment decisions. If the executive team is risk averse and uncomfortable pulling the trigger, you may find yourself in a never ending cycle of information gathering and approval meetings.

Marketing:  What type of marketing department does this organization have? Are they the “entertain customers and drink martinis” type of marketers or are they the “number crunching, graph making, ROI generating” type of marketers?  If they are the former, you are going to be guessing a lot about your product direction, which is going to be a miserable experience.  If they are the latter, then you can bet that a partnership for success is underway.

Chain of Command:  Who do you report to – the head of Marketing or the head of Product Development?  Reporting to the head of marketing tells you that you are going to have a customer focused experience while reporting to the head of Product Development tells you that you are going to have a technical/engineering focus to your position.  Either one is fine, but you want to be sure that you have a solid understanding of which one plays to your strengths. You may also want to consider which parts of the organization hold the most power. Did the CEO rise up through the technical ranks or was he a sales guy? Obtaining some perspective on the corporate power structure will provide you with some insight on whether you will be operating from a position of power or as an underdog.

Idea Generation:  Where do the ideas come from in the company?  Are they generated from the Executive Suite?  Do they come out of Product Management?  Or do you get the standard answer of “Ideas can come from anywhere…” which directly translates to “I have no clue where our ideas come from, they just kind of show up…”  That isn’t to say that innovation is limited only to the geniuses in Product Management, but that is the whole reason that product management exists – to generate and implement product ideas.  If the company’s ideas aren’t mainly coming out of product management, they either (a) aren’t listening to them or (b) hired lousy product managers.

Customer Profile: Does the company have a wide range of customers from a diverse set of markets and industries or is a large percentage of revenue dependent upon one market? One customer? This has a huge impact on the sort of product manager you’ll be able to be. One of the differences between being a consulting organization and a product organization is the ability to produce products that appeal to a large number of customers – not just one particular customer. When a company is dependent upon a handful of customers for its livelihood, it is difficult if not impossible to say no to their enhancement requests. This is proves to be a vicious cycle since the more attention you pay to your key customers, the fewer resources you have available to build a market solution.

Solid Product Suite:  Would you buy the products the company sells?  If not, are they good products that are poorly marketed?  Are they built with quality, but they don’t meet the needs of the end user?  Or are they just bad products?  I wouldn’t necessarily turn down a company with bad products – that is a fantastic opportunity to help a company turn itself around.  However, you really need to understand why the products are failing so that you can properly assess if you can fix the problems and right the ship.

So what if the products are very successful – then you take the job, right?  Not necessarily.  They might be looking for a caretaker product manager to ensure that nothing goes wrong as their product suite matures and sunsets.  That might not present the growth opportunities and challenges that you need.

Culture and Ethics: This is a difficult attribute to consider, but you’ll be doing yourself a favor by doing a little soul-searching to make sure your personality and beliefs are aligned with the company you’re going to join. This may be an obvious for some industries like alcohol and gaming, but some business plans and practices fall into a grey area.  Every company and industry has different set of norms that you must be comfortable with in order to be successful.

These are a few things that we consider when evaluating a possible product manager position.  We would love to hear your take on the subject – what do you use evaluate possible positions and more importantly, what do you wish you used to evaluate a position in hindsight.

It is a well-known fact that new ideas come from your customers, partners, analysts, competitors and other industry influencers. Like it or not, your company looks upon the product management organization to organize these ideas.

But how can a very busy product manager transform the “idea machine” into a fast, fair and simple, yet transparent process?

Remember this bright engineer who came to you last week with starry eyes and started the conversation with “wouldn’t it be great if we had a product that…”?

Chances are that if after a few weeks she does not feel you are taking her idea somewhere, she will share her future creative ideas with someone else.

This post will not provide a turnkey solution to such a process, as every company is different. It will, however, help you group and select ideas using a consistent framework that does not let your legacy products and company limitations get in the way of your thinking. In addition, the framework may help explain to that engineer why her idea needs to be further refined.

The framework consists in three principles:

1.All ideas must be aimed at solving a specific business problem. First it allows you to gather ideas around a customer-centric theme. Second it forces you to step down and look at what is truly needed, versus a your-product-should-let-me-do-this” type of input. Do not limit yourselves to your existing customers, as the new concept may also attract a different segment of customers

2.It is important to envision solutions to the problem as a “business system” that includes not only a possible new product, but also specific sales channels, support, implementation, training and services.  Granted, you most likely will never need a separate organization to serve this new idea, but at least you need to investigate what is specifically required to address the problem without the limits imposed by your company.

3.All ideas must go through the same set of questions in order to be qualified and further refined. This is what ensures consistency and transparency.

Let’s examine this last step in further detail. I usually stick to 20 questions, 10 for outside (customers, analysts, influencers) and 10 for inside the company. The reason is that you essentially want to assess the business problem, look at your company’s capabilities and see if the mixture is a good fit. It is tempting to add as many questions as possible to the list, but remember, we want this process to be fast and simple. These questions can of course be adapted to your circumstances. Finally, the order of these questions was set to evidence red flags as early as possible.

Outside:

-    Is the problem formulated correctly or is its definition too restrictive? A restrictive problem definition could make you miss an larger opportunity or waste your resources.

-    Which actor is feeling the pain? . Who do you need to sell to? (no one at this point, my buyer, someone else? ) The answer to this question may impact the duration your sales cycle as well as what sales channel is required.

-    Is the business problem pervasive in this industry? In other industries? Is this a one-customer issue or is this problem felt by a larger group?

-    What is the best possible way anyone could solve this issue in the eyes of the customer? You need to get away from the “when you have a hammer, everything looks like a nail” philosophy and think like an entrepreneur starting with a clean slate.

-    Would that solution require an organizational or process change for the customer and would they eventually agree to make it? If a new product requires too much change in order to be accepted by the customer, it could slow the adoption of the product or the new product may be flat-out rejected.

-    Is the pain felt by the customer likely to get worse in the near to medium term? If the problem becomes more acute, then time is working for you. Nice to know.

-    Could a solution be sold up-market or down-market? In other words is this problem likely to be felt by more demanding, or less demanding segments, each with different price points?

-    Could a substitute help solve this business problem? Reaching out to outside the company is important here to identify unorthodox potential solutions to this business problem which your company may not have thought about and would negatively impact your efforts.

-    Can the problem be quantified in terms of lost revenue, productivity or customer satisfaction? While it is impossible to identify the revenue opportunity of a market which does not exist yet, it may be possible to quantify the savings that a solution may generate, to help customers justify their decision, and you to estimate a first-cut price point.

-    How much would the customer be willing to pay for a solution? Remember that this customer may not be your existing customer.

Inside:

-    Is there any certain indication at this point that the solution envisioned would be considered attractive? Think ROI, margin, volumes, but also market share, new markets, barriers to exit.

-    Would the best possible way to solve this issue involve an existing or a disruptive solution? A disruptive technology may involve a different sales cycle, lower margins, more risk, and a different launch plan. You need to acknowledge this right off the bat.

-    What is the extent of internal organizational changes required to best fill this customer need? Does your company own the appropriate skill set, would management be willing to accept a lower cost structure, what is the latitude to adapt the sales channels? How open is your organization to process changes required to accommodate a new product?

-    Can a solution be completed in-house or would a partnership be required? Granted, with enough resources, your company can go at it alone, but would a partner facilitate market entry and share the risk?

-    What is the likelihood of finding a corporate sponsor willing to fight for the solution internally? Let’s face it, only lucky product managers or geniuses get it right the first time. Anyone working on a new idea requires air cover to defend it against “resource realignments” and also to set the correct expectations with executives. No one can go at it alone.

-    Does the solution envisioned fit with my company’s strategy? Is it OK to find many small ponds for an existing product or a large pond with a new one? Can you make your idea fit with one or several existing business objectives?

-    Can the problem be solved by offering a new solution recombining existing products or services? If you fail, it is better to do it early and cheaply. A first try with existing technology can help you achieve that.

-    Is a solution for this problem included in my existing product’s roadmap? If yes, do you need to reconsider the timing? If no, what should be taken off to accommodate a potential new effort?

-    What is the likelihood that my company will execute in a quality and in a timely fashion? Execution is key. What is the impact of the idea which you are considering coming to the market late or with a smaller set of benefits?

-    What would be the competition’s response to a move? Could this idea already be on any of your competitor’s radar screen? Is there another company out there who could have its eyes on the same opportunity?

This set of questions can and should be modified to your environment. Also, most of the answers are not black and white; you may need a sliding scale to account for the various shades of gray. Finally please remember Henry Ford’s famous quote: “If I’d asked my customers what they wanted, they’d have said a faster horse”.

One of the challenges facing product managers is the difficulty balancing daily crisis and strategic work, which often results in the strategic taking a back seat. However, product managers have a unique opportunity to add value when a crisis is presented to them by ensuring that the problem is properly defined. All you need is proper timing, the appropriate methodology and some persuasion. Let’s focus on the methodology part.

Here comes the crisis of the day. Question to self: are we barking up the wrong tree? When handed a crisis to help resolve, there is a good chance that you’re given a problem formulation as well as a solution in the same breath. In the race to find a solution, you may be lead in the wrong direction without noticing it. Somewhere an executive or a key customer is upset, so time is of the essence and all you have to do is execute! Wrong. In fact, this is a perfect time for a problem restatement.

Please consider the difference between two descriptions of the same problem:

• “The system is too slow and we need to buy more hardware” and
• “The use case for this particular customer requires too many operations, negatively impacting network traffic and reducing system performance”

Which problem would you rather help solve?

Let me share an anecdote which I heard as a kid growing up in the 70’s in France. At that time the Paris architecture was changing and not for the better. Many companies relocated to the La Défense District, west of Paris. Towers were a new thing then for that part of the world and for the first time most companies were distributed across many floors. With no email, chat or cell phones, face-to-face meetings were more common, so employees were moving around a lot. As a result, employees started to complain about having to wait too long for the elevators. One company hired a statistician to work with the elevator installer to reduce the average wait by a whopping 20%. Despite this great achievement, the complaints kept on coming. Everyone was at a loss until the HR manager with a psychology background observed the employees waiting for elevators. The observation triggered the idea to place mirrors on the walls between the elevators. Complaints stopped immediately.

The problem was not that the wait was long; it was simply that during the wait employees were bored!

Since people (or Parisians at least) generally enjoy looking at themselves in a mirror, the issue solved itself. The problem was indeed stated incorrectly from the beginning and this error lead to the wrong course of action.

Nobody can be upset with you for trying to better understand the issue in order to solve it diligently and efficiently and perhaps recast it as an opportunity!

Based on personal experience, what is presented as a product problem may actually be a symptom and additional digging is required to uncover the true problem, as in the case of the elevators above. There are multiple ways of finding out if you are dealing with the problem itself or one of its symptoms and my favorite methods are the 5-whys, the fishbone diagram, as well as the “broaden-the-focus” method. I will not discuss each method in detail, since it has been done before quite well already. Instead, I will present why and in which context these methods can be used successfully.

-          The 5-whys method makes you ask “why” until you find a root cause which you can act upon. I like it because it is very simple, it can be done on the fly while discussing the crisis with the panic-stricken stakeholder. As part of the conversation, you can find the root causes of the problem together and mutually agree on a more accurate definition of the problem.

-          The Fishbone Diagram works better with a team of experts and in a company culture that is used to this type of exercise. It provides a more complete analysis of the root causes, and will typically convey more authority because, after all, it is the result of an expert team, not just the imagination of the product manager. A fishbone diagram can also be performed after the crisis is resolved.

-          The broadening-the focus technique tries to redefine the problems in terms that are more in tune with improving your product, by rephrasing this problem in a larger context. For example, if the crisis is caused by the customer dropping your product because there are “too many clicks”, your problem redefinition will be “how do we improve the user’s experience?”  This method works best if you want to demonstrate a pattern of similar issues. Capitalizing on repetition of the same crisis will give your problem definition more credence.

No matter what method you chose, one thing is almost certain: you will need to solve the problem as you redefined it AND the immediate crisis. However, documenting the issues and presenting an improved view of the problem will be beneficial to your team and your product in the long-term.

Human Resource professionals know that a well-oiled product management organization improves the chances of success for new products while increasing the long-term profitability of existing products.  But let’s face it: HR is handed a tall order when asked to recruit for product management positions.

For one thing, while account managers close deals and engineers design products, the definition of what product managers do for a living varies immensely across companies and industries. This makes it difficult for the HR and hiring managers to simply rely on a job title to bring in appropriate candidates. Second, evaluating candidates can be challenging – if a new product bombs or was successful in a prior experience, what was the real contribution of the product manager?  Third, there are typically fewer product management positions relative to other areas of the company. This results in fewer openings, thus the hiring process for product managers may not be as refined as it is for other positions in the company.

So how can Human Resources professionals and Product Management leaders work together to consistently attract and retain top product management talent? Here are a few questions HR professionals may want to answer before hiring a product manager:

1) What business problem is the product manager hired to solve and what functions must be executed to address this business problem? This may sound obvious. Yet, while product management position descriptions are usually well-crafted, experienced product managers are often puzzled by the contradictory presentations of the position given by each interviewer during the hiring process. Product managers are typically interviewed by many departments, such as Sales, Marketing and R&D, in addition to the department they hope to join. As a result, they witness the differences in expectations and lack of alignment across the company front and center. For example the VP of Product Management wants to launch new products while her R&D counterpart wants help prioritizing defects, Sales begs for better collateral and Finance wants someone who will positively impact profitability.  In this situation, and in a good economy, the best candidates see a red flag and stop the process. In a bad economy, they try to please everyone to get the job and expose themselves to a potential backlash once they are hired, because they encouraged the wrong expectations and they can’t deliver for everyone.  In this case everyone loses. A solution? Leaders in product management development methodologies, such as Pragmatic Marketing and others have codified each of the functions of a product manager (pricing, requirements, innovation, win/loss…), so take this as a guide to list the responsibilities that are expected of them and ensure that every department agrees with each function included or excluded from the position description.

2) Will the organization embrace the product manager’s role as you’ve defined it? or in other words, is your organization capable of handling someone who meets the requirements for the position? Product Managers want to be leaders, evangelists, marketers, strategists, change agents, financial analysts, accountants and project managers. Oh I forgot about sales support… and that’s what they like to do. However, what product managers see as a part of their job may create too much change and may be construed as a nuisance for an unprepared organization, reflecting badly on the product manager and their organization. Is the hiring organization ready to acknowledge a product manager insisting at every turn that the sales organization must be redesigned for their new products to be successful?  Is the organization ready to consider the product manager’s recommendation to partner instead of building in-house?  Product managers chose the profession because they like to lead and they do get frustrated when they cannot complete tasks they think they were hired for. Ensuring that all parties outside product management agree on the exact definition of the role and what it means to them will go a long way toward addressing these concerns.

3) Are all the position requirements really “must haves?” Since product managers dabble in so many different domains of knowledge, it is extremely easy to create a long list of skills that are required for the position. Loading up a job posting with too many “must have” requirements may result in too few applicants, effectively shutting out those that are qualified for the job. Spelling out specific priorities can help you prune the laundry list and improve the quality of applicants. Is industry experience an absolute requirement or merely a nice to have? Do you really need someone that can code Java, PHP and web services, or do you just need a product manager that isn’t going to get snowed by product development? Also, do not ask for a talent or skill as a “must have” that will not be used within 12 month of the hiring date. This will limit your pool of candidates and disappoint your new product manager if they aren’t provided with an opportunity to exercise these skills.

4) How will your interviewers respond to questions about the product management organization? Experienced product managers know that the most important factor to help them do their job is the respect the company has for the product management organization. As mentioned above, they can see firsthand through the interview process if the PM organization is respected or not. Among the red flags are: How many VPs of product management over the past 5 years? If more than 3 or 4, the CEO and the C-suite may have differing views on how new products should be developed and released. Does the PM organization have unfettered access to customers and prospects for win/loss analysis; do they have full right to use CRM tools such as Salesforce.com? Can they access and query the financial system to determine if their products are profitable? If not, the leeway of the product manager will be severely limited. In this situation top candidates may exit the hiring process because they know they won’t be able to positively impact the organization. The solution may no longer be in the hiring process but as part of an internal change management effort, to bring a specialized product management consulting organization who can teach execs state-of-the-art Product Management processes and techniques which, once in place, will attract A-level candidates. In addition, even the best candidates will have a difficult time interviewing successfully, if they’re walking into the hiring manager’s office blind. Only so much background information can be gleaned from the corporate website, so recruiters can improve the quality of the interview interaction by briefing candidates on the dynamics, expectations and landmines important to those on the interview panel. This is especially important when members (especially senior executives) are prone to stick by their first impressions.

In short, you can reduce the time that it takes to locate and hire high-performing product managers by emphasizing prep-work upfront. Coach and manage the candidates and the organization prior to the interview process, keep a laser focus on the essential roles and responsibilities of the position, and keep an open mind!

In the first post I laid out the case for leadership in product management and outlined three primary aspects of a company [Leadership in Product Management – Effecting Organizational Alignment].  The second post addressed the importance of effecting leadership within the context of the two aspects of people and organizational culture [Leadership in Product Management (2) – People & Organizational Culture].  This final post in the series will address the importance of effecting leadership within the context of functional organization.

Let’s consider two notional functional organizations.  While all departments play important roles within a company, arguably those most relevant to product management are Sales, Marketing, R&D and Products.  Aligning the objectives, much less the activities, across these disparate departments is a challenging proposition.  More often than not they have discrete objectives, agendas and measures of success that compete rather than complement each other.

In Figure 1, I have depicted an organization that is largely sequential in its information flow – the departments are discrete with hand-off points clearly delineated.  Sales controls distribution, Marketing owns positioning and marketing, and R&D retains development.  Overall coordination is provided by Products.

Given this functional organization, the leadership style most congruent would most likely be one of command and control.  Products would assume positional authority over Sales, Marketing and R&D, directing their activities towards common objectives.  While some product managers may aspire to this model, I have no personal experience with it.  I do however have experience with discrete departments, but with less-than-clear hand-off points and no productive level of overall coordination.

In Figure 2 on the other hand, I have depicted an organization towards the opposite end of the spectrum from that above and is more representational of the matrixed departments with which most of us are likely to be acquainted.

Within this functional organization, Sales, Marketing, R&D and Products are discrete departments but have areas in which there are distinct responsibilities as well as those that overlap.  While each department retains primary responsibility for their function, ideally they are complementary and supportive.  An example in this figure is positioning and marketing developed by Marketing, some of which goes directly towards targeted markets, while other is developed specifically for use by Sales in support of their efforts in distribution (direct and indirect).

R&D is more engaged with the market facing activities of the company, and while still receiving direct market input, also benefits from additional feedback from people who are market facing informed by the perspective of Sales and Marketing.

Products would provide overall coordination but in an overlay manner.  In this model Products would also have a direct market-facing role and provide input to R&D.  The most congruent leadership style for this functional organization is one of collaboration.  Collaborative leadership is a much more complex affair and is defined by Wikipedia as, “an emerging body of theory and management practice which is focused on the leadership skills and attributes need to deliver results across organizational boundaries” (http://en.wikipedia.org/wiki/Collaborative_leadership).  As most PMs find themselves in organizations similar to this model, the need to effect leadership to bring about alignment extends beyond people to include separate departments as well.  Organizational collaboration has become a necessary fact of professional life.

The above are overly simplified representations but in so doing, I have attempted to depict two points on a continuum of functional organizations – each company will be unique in both its layout as well as resulting inter-organizational dynamics.

Returning to the subject topic of leadership, a successful product manager will need to assess the lay of the land – particularly with respect to people, culture and functional organization – and develop an appropriate leadership approach that will serve to attain the overall objective of organizational alignment towards common goals.  There is simply no formulaic answer or definitive methodology such as pitch, business case, executive fiat, etc. that will meet continuously evolving needs.

Nor is this a fixed proposition once a line has been determined.  Each change in the market, stakeholders and/or organizational alignment or composition will often require an adjustment.  Think of it as a finely balanced Rube Goldberg device in which the various components are always in motion and therefore the center of balance always shifting.

Leadership is not without pitfalls and failures.  The issues and challenges are far too complex.  Rather it is marked through being able to align the organization more often than not so that objectives such as successful entry into a new market and sustainable attainment of market share are achieved.

Successfully developing and launching a solution or product requires tight organizational alignment around company initiatives and its go-to-market plans.  You as PM will be called upon to drive alignment around how your company goes to market.  Success in this effort will require organizational alignment.  Only in delivering upon the internal challenge of organizational leadership can there be any expectation of product or market leadership.

Examples of people within business who embodied successful leadership have become icons of American business – names such as Andrew Carnegie, John D. Rockefeller, Henry Ford, Thomas J. Watson, Bill Gates, Andrew Grove and Steve Jobs.  And the latter is also quite arguably the best product manager in living memory.

REFERENCES

Leadership – has been described as the “process of social influence in which one person can enlist the aid and support of others in the accomplishment of a common task”.

http://en.wikipedia.org/wiki/Leadership

Collaborative leadership – describes an emerging body of theory and management practice which is focused on the leadership skills and attributes need to deliver results across organizational boundaries.

http://en.wikipedia.org/wiki/Collaborative_leadership

8 years later, HP does it Fiorina’s way

http://www.chron.com/disp/story.mpl/business/steffy/5777808.html

HP developed its strategy under the guidance of former CEO Carly Fiorina. But it wasn’t until Mark Hurd took the helm that the company’s plans were made a reality.

http://www.cbfeature.com/special_coverage/news/still_hp_after_all_these_years/hps_critical_battlefield_in_china/

HP Way

http://www.hpalumni.org/hp_way.htm

Shackleton – The true story of Shackleton’s 1914 Endurance expedition to the the South Pole and his epic struggle to lead his 28 man crew to safety after his ship was crushed in the pack ice.

http://www.imdb.com/title/tt0272839/

The best depiction by Hollywood of the dynamism involved with leadership was Kenneth Branagh’s portrayal of Sir Earnest Henry Shackleton, the British Antarctic explorer.  Shackleton (http://www.imdb.com/title/tt0272839/) is a film testament to this unorthodox leader who was adept at continuously adjusting his leadership approach as required in the face of unimaginable challenges – environmental, organizational and crew.  His success was ultimately measured by leading his 28-man crew out of Antarctica following the crushing of the expedition’s ship without a single loss of life.

Few moments bring more credibility to product managers than when they are able to provide rock-solid market facts to defend their strategy against opinions or third-hand customer single data points raised earlier at the water cooler.

Yet finding truly relevant, uncontested and trusted customer data is a daunting challenge. It is also time-consuming.

Of course there are always industry data or analyst reports available, and these should always be fine-combed and appropriately leveraged. I always maintain a “market facts” database which I can pull out on short notice.

But this outside data does not reflect the intimacy you have developed with your customers: how do they use your product, when can you up-sell or cross-sell and with which products? These questions can only be addressed using internal resources. A process called Data Governance can help a company make sense of this customer data. Let’s investigate data issues before we delve further on Data Governance.

The most valuable data assets are within the walls of your company. You may think that your CRM (Customer Relationship Management) system handles all your customer information, but there is a strong probability that it does not. Even assuming that your sales organization does a terrific job of updating CRM records, please consider this:

1) Companies come and go at an increasingly faster rate. Companies merge, fail, or are broken into pieces. Specific vendors provide information that track down these changes worldwide (Equifax or Dunn & Bradstreet come to mind but there are others). How good is your customer information if you are not sure about their current corporate structure? CRM solutions typically do not touch this issue.

2) There is terrific customer information in support, legal/contract, billing databases that is typically not available in CRM solutions. When visiting a customer, can you tell if their support calls were handled successfully? If they have paid their bills on time, what products they have and what is their profitability?

How far could you go if you could readily leverage your sales, accounting, contract, production, support and billing databases to better understand your customer? That’s what Data Governance would allow you to do.

Recent books such as “Data Driven” by Thomas Redman drive home the point that your customer data may be your company’s most important business asset. “Competing on Analytics” by Thomas Davenport and Jane Harris show how B2B & B2C companies use that data to create a sustainable competitive advantage. And that’s where astute product managers need to look first for market insight.

Easier said than done.

The vast majority of companies do not yet view customer data as a key company asset, comparable to intellectual property, cash, talent, or buildings. As a result, customer data is scattered across departments in separate silos, organized with little consistency. In many cases valuable information remains ignored because no one knows it exists in the first place.

In addition, data may be of poor quality. Thomas Redman, in the book mentioned above, cites the seven most common data quality issues that prevent knowledge workers, such as product managers, from leveraging their company’s data asset:

1. People can’t find the data they need: knowledge workers spend 30% of their time searching for data, half the time unsuccessfully
2. Incorrect data: 10-20% of data records contain inaccuracies
3. Poor data definition: Data is frequently misinterpreted
4. Data privacy/security: All data is subject to loss or risk
5. Data inconsistency across sources, due to different definitions across departments
6. Too much data due to uncontrolled redundancy
7. Organizational confusion: Where is the data? Who owns it?

No doubt product managers cannot tackle all of these issues by themselves. However, it is typical that every department looks at the guy next door to fix this problem until a leader or a big problem emerges. And counting on IT alone is not the answer because while IT can help putting a data infrastructure in place, they do not have the expertise to assess the quality of the data this infrastructure provides. An equally important question of principle is that business requirements should drive IT relative to customer data, not the other way around.

What is ultimately needed is integrated customer data that is trusted by everyone in the company.

Product managers, as the CEO of their products, stand to gain the most from clean, readily accessible customer data. They are in a position to discern good data from bad data. Also they have an analytical mind; they can assess what data is the most valuable and how it can best be leveraged. Finally, product managers possess the leadership skills to bring the state of data to an acceptable level. What product managers miss is the bandwidth and an efficient process to unlock these customer data assets.

While the bandwidth issue cannot be addressed until the customer data assets are deemed worth cultivating by management, a lot can be done about the process. It already exists and it is called Data Governance.

Wikipedia’s definition of Data Governance is as follows: “Data governance is a set of processes that ensures that important data assets are formally managed throughout the enterprise. Data governance ensures that data can be trusted and that people can be made accountable for any adverse event that happens because of low data quality. It is about putting people in charge of fixing and preventing issues with data so that the enterprise can become more efficient.”

Data Governance is not a one-time task. It requires continuous attention and includes tasks such as identifying customer data sources, assessing their value, deciding if a data source must be eliminated or merged to another one, improving data quality, reduce costs or evaluate data-related investments.

What we advocate in this post is that product managers actively participate in or even lobby for the launch of a formal Data Governance initiative because it is good for their company, and it is good for them personally. Consider the following upsides:

• Obtaining an understanding of which data assets are available to you
• Gaining first-hand customer insight before the competition does
• Improving the company’s decision process
• Generating fresh ideas to cut costs
• Decreasing the risk of regulatory fines
• Networking with key individuals from other departments also participating in the Data Governance initiative

Data Governance is here to stay. If you don’t do it, your competitors will.

If you don’t participate to an existing Data Governance initiative in your company, your voice will not be heard.

Product Managers are uniquely qualified to participate in and are most likely to benefit from proper Data Governance. By doing so, they also have a unique opportunity to demonstrate their value to the rest of the company.

I have been helping a small company get a strategic content generation service launched as part of my product management consulting lately and, in doing so, have stumbled on the theories of Content Marketing.   It is an interesting, fast-growing side-effect of Web 2.0 – now that users are generating content, companies have to begin generating their own quality, relevant, customer-focused content to keep themselves competitive.

I think that it is going to have some significant effects on the role and duties of Product Managers in the future, so I’m going to share my thoughts on the matter.

In order to fully understand the nuances of Content Marketing, I recommend reading the work of Joe Pulizzi and David Meerman Scott, but let me provide a limited definition for our discussion.  Content Marketing is basically the production and distribution of content for customer generation, retention and attention.  However there is a twist – customers don’t want to read endless ramblings about your product.  Rather, they want to read content focused on their business problems and opportunities.  They don’t want sales pitches for your product; they want solutions for their problems, regardless as to whether or not they have anything to do with your product.

Stop and think about that for a second.  They really don’t want to hear about you, your company or your product. They get enough of that through ads, glossies and presentations. Instead, they want to hear about themselves and their business landscape.  Understand this concept and act on it and you can become their “Trusted Advisor” which gives you an “in” that you can leverage to get your product exposure.  Ignore it and you very well may be relegated to an also-ran.

Achieving the “Trusted Advisor” status has significant benefits with both current and potential customers.   Once your company becomes a trusted advisor to your current customers, they will be much more interested in interacting with you and may give you first access to business problems that they are having.  Interestingly, it may be actually more powerful to have trusted advisor status with your potential customers because you will have less work to do for lead generation and credibility establishment.  Your customer will seek you out (and actually be able to find you on search engine) and your established credibility means that sales will have less work to close the first deal.

Okay, great lesson for a marketer, but as a Product Manager I really don’t care…

My friend, you have never been so wrong.  Marketers understand the market, but Product Managers understand the customer and their day to day trials and tribulations. Product Managers are the only ones close enough to the customers to be able to produce content that the customers are actually going read.  Like it or not, you need to be the one generating the content used in the content marketing strategy.  You need to be the one who produces the article on the struggles of implementing CRM experienced by your specific market segment, even though your company doesn’t provide a CRM system.  Or how changing government regulations are causing billing problems for your market segment, even though your product portfolio provides unrelated automation for their warehouses.

You understand their business, their strategies, their problems and their needs inside and out, so you are one of the few individuals in your organization with sufficient insight to develop the right content to become their trusted advisor.  If your company wants to leverage implement Content Marketing, add content generation to your list of duties – fresh, relevant, quality content just became your newest product feature. As with any feature that a product manager develops, you will be responsible for coordinating the activity and ensuring the quality and relevancy.  Writers can be hired and sales can help you produce content ideas, but overall this is going to be your baby.