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 / Spring 2013 / Issue 70(originally published by Booz & Company)


Product Management Gets Stronger

5. Collaborate across functional boundaries. Strong-form product management is inherently cross-functional. Communication is essential in developing the relationship between marketing and product management; there may be some debate over which group sets the product mix, sales plan, and forecast. Another important relationship exists between engineering and product management; someone will need to oversee the trade-offs in early stages of product development.

A company that wants to use strong-form product management must break down these and other organizational barriers. For many top innovation executives, this is critical. After all, multiple departments generate information and contribute to the success of a product—a strong-form product manager needs to be at the center of this knowledge. For instance, instead of customizing a product for a single customer, a product manager who works closely with his or her peers in marketing and R&D may realize that the same innovation would benefit multiple customers, and that it can be engineered into the product at a platform level and scaled across customer segments. Similarly, a product manager who has a good relationship with his or her peers in operations may be faster to recognize the value that could be created—in the form of either increased product quality or lower costs—by changing suppliers.

Committing to Change

Companies adopting a strong-form approach will need to undertake a change management initiative that typically requires years to implement. Success hinges on the involvement of the CEO and other senior leaders. They must often make leadership changes at the product manager level, and they have to explain the benefits of the new model and advocate for it. And they need to prevail upon other functional leaders, whose skills they still need, to accept a new organizational paradigm and a shift away from their old roles in product management (see “Think Functionally, Act Strategically,” by Deniz Caglar, Namit Kapoor, and Thomas Ripsam, s+b, Spring 2013). After the CEO and senior leaders have paved the way, the organization must appoint a change management team to manage this transformation. This team must then articulate project goals, establish metrics for success, monitor progress, and course-correct if things don’t go as planned.

Although fully realizing the benefits of a strong-form model will be a multiyear effort, companies can introduce improvements along the way. For example, executives can identify their highly skilled product managers at the outset, and put them in charge of the most important projects. And they can start working to improve transparency, which will bring immediate benefits as these managers acquire the information they need to make decisions.

Companies can also deploy strong-form product management in one business unit and a more traditional functional approach in other units. A semiconductor company, for instance, might use strong-form management in a fast-evolving area such as the development of mobile chips, but not in the unit that manufactures a commodity product such as DRAM (dynamic random access memory) chips. Or look at Amazon, which has adopted something very close to strong-form management in the unit that markets the Kindle e-reader.

Whether companies choose to build this capability in one business unit or to adopt it enterprise-wide, a strong-form model offers significant opportunities to move from strategy to execution while ensuring coherence—a critical enabler of success. By creating a tight link between strategy, the customer, and products and services throughout their life cycle, strong-form product management becomes the nexus of a company’s current portfolio, future portfolio, and long-term profitability. As technologies continue to evolve and the chance increases for complexities to overwhelm the product line, strong-form product managers can ensure that their company is leveraging the best information to make smart decisions about innovation and development. Some companies have already made the transition, but most will need to embrace the strong-form model in the coming years—to avoid becoming the next cautionary tale. 

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