Download WHITE PAPER A NEW CLASS OF B2B PRODUCT MANAGER

WHITE PAPER
A NEW CLASS OF
B2B PRODUCT MANAGER
Because Something Has To Change
by John Mansour, Managing Partner
WHITE PAPER: A New Class of B2B Product Manager
Executive Summary
The Issue
There is a gaping hole that exists between corporate financial goals and the constantly growing slate of
product initiatives. When that gap exists, every market opportunity and every product idea seems like a
good one. It’s a path of distraction that’s stifling the growth of many organizations.
Product management and product marketing teams collectively own the responsibility for closing the
“strategy gap.” Through no fault of their own, they’re not structured to close the gap. It’s time for a
new class of product manager and a new gauge for measuring success.
The Insanity Dynamic?
Product managers and marketers have been trying relentlessly to be more of a strategic influence for
years. It’s not working, but they’re still using the same practices and hoping for different results.
Something has to change!
Underlying Factors
1. Product ownership is all-consuming, keeping product teams from being strategic.
2. A growing influx of technical skills is tilting the scales further away from strategic influence.
3. Strategy at a product level is a misnomer. It limits the magnitude of problems and solutions.
Product CEOs executing product-centric business practices are no longer good enough to drive an
organization’s desired growth in a manner that’s sustainable.
Introducing the Product Portfolio Manager
Portfolio managers complement traditional product teams and function in the “strategy zone” full time.
They have no product ownership, no day-to-day product responsibilities and function at a level that
transcends products. They come in vertical and horizontal varieties and their comfort zone is
deliberately centered on macro industry/market dynamics and operational business practices of target
buyers. They’re measured on the organization’s performance in key market segments instead of
product performance. There’s little not to love…but most organizations only need a select few.
Impact of the Product Portfolio Manager on…
• Team Balance – One arm of the product team is responsible for the market & portfolio strategy
to balance and complement the other arm responsible for day-to-day product execution.
• Product Investment Priorities – High-impact solutions get priority over individual product
enhancements. One agenda decided as part of the overall strategy with the role of each
product clearly defined to improve execution and eliminate competition for resources.
• Product & Marketing Execution – Done with much clearer purpose and fewer distractions
because every initiative is tied back to a single overarching plan with specific goals.
Closing the “Strategy Gap” to Drive Sustainable Growth
Portfolio managers are the new class of B2B product manager responsible for closing the “strategy gap”
and leading the organization off the path of distraction and on to a path of sustainable growth. Their
odds for success are great because day-to-day product ownership isn’t part of the job.
Copyright 2012 Proficientz, Inc. All rights reserved.
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WHITE PAPER: A New Class of B2B Product Manager
A New Class of B2B Product Manager…Because Something Has to Change!
Overview
There is a gaping hole that exists between corporate financial goals and the constantly growing slate of
product initiatives. The question that must be answered to fill that gap is “what markets are we
targeting, what problems are most critical to solve and why?” It’s the market & portfolio strategy, and
in its absence every market opportunity and every product idea is a good one. It’s a path of distraction
that’s stifling the growth of many organizations!
A sizable gap exists between corporate goals and product execution.
Product management and marketing teams collectively own the responsibility for answering those
questions, but factors outside their control prevent them from doing it now and the future doesn’t hold
much promise if they continue on the current path.
Through no fault of their own, most product teams aren’t structured to be strategic in a way that’s
highly valuable to the organization, and something significant has to change if organizations expect their
product teams to take a stronger leadership role in driving sustainable growth. After all, it’s their job!
It’s time for a new class of product manager and a new gauge by which product teams are measured.
The time has arrived for Product Portfolio Managers to become an integral part of every product team.
Copyright 2012 Proficientz, Inc. All rights reserved.
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WHITE PAPER: A New Class of B2B Product Manager
The Insanity Dynamic is Alive and Well
You’re familiar with that famous definition of insanity – doing the same thing over and over again and
expecting a different result. As it relates to product management and marketing teams becoming more
of a strategic force – continually delivering high-value solutions that improve the organization’s value to
the market – the insanity dynamic is alive and well, and there’s no end in sight if current practices don’t
change.
Despite years of ongoing group therapy taking place in blogs, meet-ups, associations, conferences, social
media, training courses and various other forums, the strategic-influence needle has barely advanced, if
at all. Major changes in the make-up of product management and marketing teams have to occur to
better balance the strategic and tactical forces if organizations want to glean the full value of their
product investments as measured by the advancement of the organization’s overall market position.
Strategic influence has not grown commensurately with the maturity of the product management profession.
The irony is that B2B product management and product marketing teams have remained
disproportionately tactical as the profession has matured, especially when considering the groundswell
of organizations now catering to product professionals from every angle imaginable. The tactical
phenomenon is occurring for a variety of reasons, most of which aren’t the fault of the individuals in the
positions.
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WHITE PAPER: A New Class of B2B Product Manager
Top Contributing Factors
1. Product Ownership is All-Consuming
Product managers with direct responsibility for one or more products have two chances of being
strategic – SLIM and NONE. It’s not that product managers don’t have the knowledge or skills.
It’s more about a wealth of talent that’s being under-utilized. There are simply too many issues
coming from too many directions that suck product managers into a rat hole to the point of no
return. It’s not enough to be strategic for a few hours here and there or for the occasional
offsite meetings, sales calls or customer visits. To be strategic in a manner that’s valuable to the
organization, it has to be a fulltime job for a select few.
2. A Growing Influx of Technical Skills
More and more product management and marketing professionals are coming from roles with
strong technical backgrounds. While those skills are highly valuable, they don’t make for a
“natural” transition into product management and marketing roles where there’s no exact
science to most of the activities, extroverted type-A personalities are preferable, and soft skills
such as persuasion are paramount.
Consequently, teams overloaded with technical skills naturally gravitate to their comfort zone to
deal with issues that are more black and white, the tactics. While tactics are an enormous part
of the success factor, the macro effect on the organization is the lack of a grand plan that
transcends all products (market & portfolio strategy) and becomes the root cause of poor
execution on all levels. Sound familiar?
3. Strategic at a Product Level is a Misnomer
Strategy can only go so far at a product level. With very few exceptions, it’s difficult to solve
problems that have broad strategic impact (as measured by your target buyers) with a single
product because the scope of problems and the solutions are limited by the product.
Furthermore, in B2B companies where many products target the same markets, the highest
impact solutions usually involve multiple integrated products and address a broader set of
related customer activities that go beyond the scope of a single product. Throw in the fact that
product managers are motivated by product performance incentives and you have practices
that simply aren’t conducive to identifying and solving problems that have high market value.
Injecting strategy responsibilities into the dynamics of this environment isn’t nearly enough to close the
strategy gap. Current practices and team complexion must change to incorporate a fulltime strategic
role into the product organization. The new role must complement existing product teams and be an
integral part of the process whereby everyone will be measured by a new standard. This role is the
Product Portfolio Manager.
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WHITE PAPER: A New Class of B2B Product Manager
Introducing the Product Portfolio Manager
The product portfolio manager is the dream job many product professionals would do backflips to have.
Gathering, validating and socializing macro market information, creating and selling market and
portfolio strategies internally, defining high-impact business needs, collaborating with product teams to
brainstorm solutions, working with marketing teams to craft differentiating value propositions,
supporting sales teams in strategic accounts and speaking at conferences as a recognized thoughtleader, all without the day to day product responsibilities. What’s not to love? And, additional
headcount is rarely required when adding this role to existing product teams!
Operating in the coveted “strategy zone” though, comes with a much larger burden of responsibility
than your standard-issue product manager. The “responsibility-without-authority” implications are in
play to a far greater extent for portfolio managers because they’re ultimately responsible for ensuring
the organization meets its performance goals in chosen market segments. That responsibility spans a
much wider spectrum than a typical product manager.
Portfolio managers typically come in three varieties:
1. Vertical – when products are industry specific such as retail, healthcare, education, etc.
2. Horizontal – by business discipline such as IT, customer service, etc. when products target
multiple industries or vertical markets.
3. Hybrid – common in smaller organizations with a few products serving multiple market
segments
Regardless of orientation, they’re operating at a level that transcends products and don’t have day to
day ownership of product issues. The portfolio manager’s comfort zone must be deliberately centered
on industry and market dynamics as well as operational business practices of target buyers. Heavy
product expertise is not a pre-requisite, and in many cases it’s an encumbrance.
Operating in the “industry and business-practice zone” is essential to uncovering higher value needs.
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WHITE PAPER: A New Class of B2B Product Manager
A New Gauge for Measuring Product Teams
High-performing products have long been the mantra of B2B product managers. Unfortunately, the
product performance model begins to yield diminishing returns once an organization’s portfolio reaches
a certain size.
In B2B organizations where many products target the same markets, the product performance model
creates too many fragmented “product views” of the same markets, eventually resulting in competing
R&D priorities for what amounts to little more than tactical product enhancements that do little to
improve the organization’s strategic market value. Customers aren’t thrilled either because the peanut
butter strategy – spreading engineering resources thin across all products – results in only minor
improvements to each.
Market-performance models grow your organization’s value to the market because they transcend
products and result in a holistic view of an organization’s target markets…a single view of the market is
highly conducive to identifying and solving bigger problems…your ability to identify and solve bigger
problems ensures you’re investing most in the products that collectively create the highest value
solutions…and continuously delivering the highest value solutions improves your organization’s market
position and drives sustainable growth.
To that end, product teams will no longer be measured by the performance of individual products, per
se. They’ll be measured by the contribution of each market segment relative to the organization’s goals.
The market-performance model forces collaboration across product teams to identify and solve bigger
problems that have more strategic implications to buyers. The broader market perspective gives
product teams sharper insights that make it easier to determine the right mix of high-impact solutions to
drive growth and user enhancements to keep customer sentiment favorable. Execution improves
significantly when product teams are aligned to the same goals with clearly defined tactics. The
portfolio manager role leads the charge in gathering and socializing the broader market perspectives.
Market segment goals and well-defined market needs encourage product teams to collaborate and innovate.
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WHITE PAPER: A New Class of B2B Product Manager
Impact on Team Balance
It’s a good news/bad news scenario! The good news – the dream job for many product professionals
has arrived. The bad news – most organizations need only a select few portfolio managers. The number
of portfolio managers however, is more a factor of the number of market segments and business
disciplines an organization serves than the number of products or product managers.
The extent to which portfolio managers are vertically or horizontally oriented depends on many factors.
Company size, market focus, maturity of the product category and business models are typically the
most influential. Very few organizations require additional headcount but most require a reallocation of
existing headcount to fill portfolio management roles.
Impact on Product Investment Decisions
The decision process changes significantly when compared to typical product strategy. Instead of
subjectively weighing the short-term value of feature enhancements to many products, executives are
assessing the objective value of proposed solutions across market segments and weighing pros and cons
relative to short and long term corporate goals. In most cases, investments in strategic solutions will
outweigh those for individual product enhancements to support the desired growth trajectory.
Too much emphasis on user-driven enhancements leaves organizations vulnerable to missed market opportunities.
A single holistic view (quantitative, qualitative and competitive) of each market segment and the highest
value problems your organization is adept at solving create the backdrop for making portfolio
investment decisions. Product managers, designers and developers complement that effort by defining
the solutions and estimating the time, cost and tactics to bring them to market.
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WHITE PAPER: A New Class of B2B Product Manager
Impact on Execution
Portfolio management improves product execution because the role of each product has a clearly
defined purpose in the overall strategy. Priorities become very simple for product managers. Features
required to deliver the highest value solutions (as outlined in the market and portfolio strategy) are first
priority. Enhancements to products that have the highest customer value are second priority. The
80/20 rule is in play as there will always be unplanned emergencies, but there are fewer of them when
product priorities and specific market goals are established as part of the overall strategy as there is less
dependency on the next home-run product to drive growth.
Product Marketing’s stock rises in a portfolio model as the need for detailed product knowledge (for
marketing purposes) goes down while stronger industry and solutions focus goes up. This shift places
more focus on creating value propositions that communicate the organization’s strategic value to each
target market while using the breadth of product and service solutions as proof points to make
competitive differentiation more intuitively obvious. More on the Strategic Side of Product Marketing.
Closing the Strategy Gap to Drive Sustainable Growth
As B2B organizations grow from one inflection point to the next, the magnitude of problems they’re
solving has to grow commensurately to avoid extended flat-lines in their growth trajectory.
Sustainable growth boils down to three questions organizations must constantly answer as they traverse
the growth curve.
1. Where are we going? Revenue, profitability, retention, etc. to reach the next inflection point.
2. How will we get there? The gaping hole defined herein as the “market & portfolio strategy.”
3. Why will we succeed? Execution of strategic initiatives required to achieve corporate goals.
These questions must be answered at a level that transcends products if organizations want to realize
the full value of their product investments. Portfolio managers are the new class of B2B product
manager responsible for closing the “strategy gap” to lead the organization off the path of distraction
and on to a path of sustainable growth. Their odds for success are great because day-to-day product
ownership isn’t part of the job.
Next Steps
If there’s a sizable gap between your corporate goals and product execution and it’s stifling your growth,
contact Proficientz to learn how our framework, training programs and consulting services can help you
close the gap, get off the path of distraction and get back on the fast-track to sustainable growth.
Copyright 2012 Proficientz, Inc. All rights reserved.
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