High Tech Product Management

Layne McDonald. Ph.D.

Product Management--what does this mean in a High-Tech company? What is the function, and where does it belong? Held permanent positions in several high-tech concerns, as with PJM Consulting; I have worked with many more in a consulting ability.

 

Product Management is in a state of disorder in High Tech. Most often, it exists in the marketing department. Sometimes, it is in the engineering/product development department. Occasionally you will see it as its function. And again, what does the term mean in a High-Tech company? Sometimes it is used interchangeably with the word "Product Marketing." In this case, it means responsibility from the cradle to the grave of the product planning and marketing functions for a particular product or product line. In other words, you are collaborating with the developers to define the development (product planning) and driving the other "3Ps" for the product--setting pricing, distribution, and promotional strategy.

 

In larger companies, you will often find this function separated into two distinct jobs: Product Management as the Product Planning part and Product Marketing as the function that manages the product once it is released into the market--driving pricing, promotion, and distribution. In this case, both processes may still live in the marketing department, or the Product Planning part is sometimes in the engineering department.

 

The last variance on this theme that is sometimes seen is that Product Management lives in the engineering department, but it only vaguely resembles the traditional definition of the term. In this case, it is "Product Planning." Still, the job and skill set more closely fit the description of an engineering project manager, with extraordinarily little weight put on exploring the market to match marketplace needs with engineering capabilities.

 

In High Tech, the Product Management function is typically a "matrix" position: lots of responsibility for a product's success, with extraordinarily little actual authority to ensure that success. Typically, a Product Manager's success will be decided based on their ability to convince other organizational stakeholders that the path laid out is the best for the company (and the individual stakeholders as well!) People skills are, therefore, as essential as having a technical grasp of the job for a Product Manager's ultimate success.

 

In consumer markets, the Product Manager typically holds much more direct power--often much like a mini-GM for his product line. Often product development will even work for him. Brand Manager is often used in consumer businesses instead of Product Manager. (In a big High-Tech company, a Brand Manager will fulfill more of a Marcom role).

 

So, what is the best way to structure the Product Management role in your business? There is not one best way. It depends upon your business, culture, and personnel. But I do have my biases. Most high-tech companies would benefit by structuring the Product Management function to be strong. There is much to gain by putting a strong, experienced Marketer with a solid technical background in a Product Manager role where they are graded and compensated by the results of the P&L of their product line. This lack of product management strength is a massive problem in many High-Tech companies, particularly those founded by product developers. Would not suggest that Product Development should report to the Product Manager in a High-Tech company. Still, I would give them a discretionary budgetary authority on at least a part of the marketing budget for the product line. Would also ensure they have management backing to deal with the developers from at least an equal position of strength.

 

The Product Manager's mentality should be that of a "mini-CEO" with his product line analogous to the overall company for a real CEO. Too often in technology companies, the Product Management/Marketing functions need the ability to stand up to Engineering. This leads to a culture of building what suits someone's fancy rather than making what the market will buy--a dangerous thing in the long term. A vital Product Management function will lead to an advocate for that product line whose sole business "purpose in life" is for his product to succeed. This outlook ensures that the big picture will always be looked out for, cutting the potential for a product line's performance to be reduced by turf wars-- or sub-optimal tactical moves due to poor inter-department communication. The Product Manager is there to rationalize and orchestrate to ensure the product line has the best chance of success.