Over the years we have written several articles about the pitfalls of focusing too much on your product, including:  Is it time to take the ‘product’ out of product management?  and Warning: No-one Cares About Your Product! This time we are going to make the case that product management is about more than just your physical product and when done right it is actually the essence of good strategic marketing.  Not only that, but product management should be a core focus of general management because it encompasses the majority of what it takes to be a successful general manager.

Small “p” Product Management

It is easy to get trapped in a tautological definition of product management – “the product manager manages the product.” This product-first thinking means that critical elements of value and delivery are left to other parts of the organization.  Marketing decides what the message should be, sales decides what they should sell to which customers, customer service decides which customers are most important and how to serve them, etc.  This leaves the business with no more than a hope that everyone’s objectives are aligned around a winning strategy.

 An example of what can happen when companies are too focused on the product aspect of product management was the thermostat market up through 2010.  The electric thermostat is not a new product by any means.  It was invented by Warren Johnson in 1883 and launched when he founded Johnson Controls in 1885. 

The only meaningful innovation in the category for the next 120 years was the programmable thermostat, allowing customers to “manage the tradeoff between comfort and energy usage” by having different temperature setpoints by time of day.  By the early 2000’s, analog thermostats were now digital, and the majority of new thermostats installed could be programmed. Yet the US Energy Information Agency estimated that only 19 percent of these thermostats were programmed. This means that over 80% of those programmable thermostats were set on permanent “hold” – probably adjusted only twice per year to switch from heat to cool and vice versa.  Thus, for most of the market the programmable thermostat delivered no more value that the original basic electric thermostat developed by Professor Johnson in 1883. 

In 2011 Tony Fadell, the “father of the iPod,” launched The Nest Learning Thermostat and turned the thermostat market on its head.  Like he had done with the iPod, he recognized that there was a significant part of the market that was being underserved by the programmable thermostats of the day.  Those thermostats had been designed by engineers for engineers and while some would argue they are technically superior to the Nest, they were not being used to their fullest.  The problem was that they were too complex for the typical homeowner. 

The entire thermostat market had been focused on the best technical product to solve the problem, rather than the best and easiest solution to solve the bigger problem for the customer.  Fadell, clearly channeling his success with the iPod, realized that solving the customer problem (‘a programable thermostat that you don’t need to program), required a different value proposition, a different channel and ultimately a different business model, NOT just a better ‘product.’

The Way Out – Expand the Role of Product Management

As this example highlights, the role of Product Management is all too often limited to managing the product specification, and this can lead to disaster.  In our view, Product Management should not be primarily about the current product, rather it should be the champion of your entire strategic marketing process.  In our Grassroots Strategy workshops and book we walk through a strategic marketing framework to improve the commercial success of your business. This is precisely the mission of good product management, and thus exactly the relevant toolkit.

The core responsibility of product management is to ensure that your entire offering meets market needs and creates significant customer value. In addition, you must have a business model that captures that value. When done properly, the product management orchestrates the interface between the market (customers) and your entire organization.  It requires deep interaction with the entire organization, including sales, marketing, customer service, operations, and engineering. The product manager must harmonize these functions to achieve a common goal: delivering value to customers while aligning with the business’s strategic objectives.

Bridging Sales and Customer Insights

One of the primary responsibilities of a Product Manager is to serve as a bridge between the organization and the people interfacing with customers on a regular basis, aka sales and customer service. Ideally, the Product Manager should gather crucial customer needs and feedback through direct interaction with customers. In addition, they should also gather customer needs and feedback through the commercial teams, since they are on the frontline, interacting directly with customers on a daily basis. In return, product managers should equip the sales team with robust value propositions and value pricing strategies, enabling them to effectively communicate the product’s benefits and justify its value, thereby enhancing customer acquisition, retention and profitability.

Collaborating with Engineering and Development

The collaboration between Product Managers and the engineering or product development teams is vital for innovation. Product Managers must understand what is technically feasible and economically viable from these teams. They also should create and refine the product roadmap based on segmentation and customer value, which outlines the future direction and enhancements of the product. This roadmap is essential for keeping the development efforts aligned with market needs and technological advancements.

Synthesizing Go-To-Market Plans

Product Managers should also work closely with the marketing department to refine and target the go-to-market plans. By providing insights on market trends and customer needs, they help marketing tailor messages that resonate with the target customer segments. They should define clear value propositions that the marketing team can use to attract potential customers. This ensures that the go-to-market plans are targeted by customer segment and messaging is compelling because it focuses on solving customer problems and delivering economic value.

Aligning with Operations

A critical yet often overlooked aspect of product management is the alignment with operations. Product Managers should perform the trade-off analysis between customer needs, engineering specifications, and manufacturability to achieve a cost that aligns with (ideally is well below) the customer value delivered.  Product management should also be involved in forecasting and understand the impact of accurate forecasts up and down the P&L.

Product Management as a Training Ground for General Managers

The skills honed in Product Management—strategic thinking, cross-functional leadership, market insight, customer focus, and operational coordination—are also the hallmarks of a great general manager. Product Managers are uniquely positioned to understand the business from a holistic perspective, making them prime candidates for general management roles.

By managing a product across its lifecycle, they learn to balance short-term successes with long-term goals, manage diverse teams, and make decisions that affect the entire business. This comprehensive experience prepares them to become effective leaders who can navigate complex business environments and prepares them for larger roles.

Conclusion

A skilled Product Manager orchestrates the interface between the market and your entire organization, and our Grassroots Strategy framework is exactly the toolkit they need to successfully drive this interaction. As they coordinate various functions within the organization, Product Managers should drive them towards a unified objective of delivering and capturing exceptional customer value. As businesses continue to navigate increasingly competitive markets, the role of the Product Manager will become ever more crucial, not just in managing products but in leading businesses towards sustainable growth and profitability.