This is a perfect moment for industrials companies — the companies that make and maintain heavy machinery, construction and building components and equipment, energy products such as turbines and windmills, and similar products — to invest in developing distinctive capabilities.
One of the most promising is improved product management. At too many companies, decision making is fragmented across a variety of functions. Sales decides which products to maintain and which to kill; R&D determines when an enhanced version of a product is ready for release; and operations may have the final say in choosing suppliers. Product managers are little more than administrators without much decision-making power; they police the results, focused on one or two broad mandates. At a low-cost manufacturer, they nix costly features that are nice but unnecessary; at a premium company, they block cost-saving initiatives that would erode the customer experience. Although narrowly valid, this siloed approach often results in customer insights that are gathered but never used, slow innovation, and disappointing product profitability.
By contrast, strong-form product management elevates product managers to a cross-functional role, giving them the authority to make decisions about the timing of innovations, pricing, channel strategy, and everything else that affects the success of product portfolios. This ensures that the company’s core strategy makes its way into the design and launch of products and services. At a company practicing strong-form management, product managers become the focal point for a higher level of strategic judgment.
At its best, strong-form product management is an accountability model — a way of assigning responsibility for results to a single individual who can take a life-cycle view of a portfolio of related products, rather than to a series of people who lack a holistic perspective. At a time when competition and customer demands have intensified, this can be a differentiating capability, fortifying the connections to customers and increasing the odds that a company will make the right trade-offs and win in the marketplace.