The best product managers with whom I’ve worked consistently employ processes important to creating successful products within their organization. These individuals are not necessarily the content experts but they are able to use repeatable processes and their institutions’ expertise to create success.
The processes important to product management are:
- Strategic thinking
- Research and market analysis
- Business & financial analysis
There is no “product management” specialty. The product management role is not like a design engineer in R&D or a logistics manager in Operations who have relatively narrow, albeit deep, portions of the entire product life cycle. An effective product manager (PM) must be able to take a pantological view of their product line and market to determine the best path forward. She must also be able to communicate, convince, and lead the company through the morass of processes and approvals required to get to market.
In addition to the strategy of a single product, the PM must be able to interleave the strategies of individual product lines into a web of products that fill the markets’ needs at all applicable levels for varying and overlapping timelines of the products in the portfolio.
Not only is the market or customer side vital, but so is the supply side. The PM must orchestrate and integrate the inputs from multiple suppliers and their schedules to maintain this multi-generational product “web”. We do not have the luxury of focusing solely on one portion of the product offering while ignoring the impact of others on the total product structure. The web must be maintained while evolving through the years.
Research and Market Analysis
The market analysis a product manager must conduct involves identifying and evaluating reliable sources of data to determine the current state of the market and deciding what the future of this market may look like. In addition to using “hard” data in the form of facts, figures, and specifications, a good market analysis also contains anecdotal and qualitative information gathered from customer interviews, and from the experiences you and your colleagues have had with similar products in applications that represent the needs of your customers.
Analyzing markets is one of the foundational processes of the product development process. The product manager must know into which market or markets your product should and will be sold to create product to address these markets’ needs.
Competitive research determines to whom you should compare your products. This is a brief process used to determine which companies should be in the list of “real” competitors.
- Who are your peer companies?
- Which of the competitors you listed above are ahead of you in market share or sophistication? Behind you?
- What trends do you see in these competitors?
- Who do your key customers prefer in addition to you?
Once you have determined which firms are your true competitors, it is time to determine how well they compete against you, and why. The information from this analysis can be used as the input to the product development and strategy processes.
More in-depth than the tired and typical SWOT analysis, these questions will provide clarity and insights into the competitive landscape. Compile this data on 3 to 5 competitors whom you believe are most important and compare them to your business on a regular basis.Continue to monitor them on a quarterly basis and compare their changes to your own.
- What is their 3 to 5 year history?
- What is their market share compared to your own in similar markets to your own?
- Is their market share growing in these markets?
- Are they taking share from you?
- In what segments do you compete with them?
- Who are their customers?
- How is their relationship with their customers?
- How is their relationship with your customers?
- How important is the division we are discussing to their entire company?
- What could they do that would significantly shift the market from you to them?
Business and Financial Analysis
A product manager’s role is a business role. This role is one that affects and is affected by all aspects of the business. Because of this, the great product manager must have the desire and ability to become competent in many aspects of business to be able to comprehend and contribute to all aspects of the business. Remember, the goal of a product manager is to increase the worth of the product line.
There are process reviews that can start immediately upon the release of a new product with the twin goals of improving business performance and improving project performance. Some examples of these audits are:
- Product cost versus goal
- Part number or SKU count
- Adherence to schedule
- Effectiveness of inter-departmental cooperation
Use the findings of these forensic audits to improve your processes for the next round of product development and launches. Below is a list of results you can expect from these audits:
- Identification of “Margin & Profit Leaks”
- Improved collaboration
- Identified opportunities for new revenue
- Reduced inventory
- Improved revenue and profit
If you were to rank your performance in each of these areas, in which of these processes are you most effective and which the least effective? “Know thyself” is an age-old admonition that is as true today and ever.
The processes presented here are required if a product manager intends to be even moderately successful. Great product managers know this and work hard to be great at each of them. They strive to implement them a bit better each time.
It is also worth noting that all of these processes are related to general business activities and not to a specific product or service. Product management, like general management, is a broad discipline encompassing most portions of the business.
This article originally appeared at PDDNet.com on March 1, 2016