Product Management Best Practices
With its foundations in 1930s manufacturing, Product Management has become a critical and strategic organizational capability with responsibility and accountability for the successes of products and services under its management. Whether it’s hardware, software, or household products in everyday use, all organizations benefit from the focus, ownership, and coordination of effective product management. Done well, Product Management teams have the opportunity to make valuable contributions to the market performance of their products and services. Done poorly, stakeholder value is reduced, revenues and market position are harmed, and competitive advantages are squandered.
A 2022 technology report published by Bain & Company highlighted that only 25% of chief technology officers feel the return on their software development investments met senior management's and the board's expectations, highlighting just how easy it is for things to go wrong.
But how can you tell what “good” or “bad” product management looks like? All organizations differ in people, processes, technology, markets, customers, and their appetite for taking risks, to name just a few. The function of product management needs to reflect these differences but be based on core competencies of collaboration, innovation, exceptional planning, efficient execution, and constant communication.
This is where a maturity assessment can help by identifying risks, and uncovering future opportunities for improvements, within existing processes, people, and technologies. But before we get into that, let's look at some of the fundamentals of Product Management and what “good” might look like.
What Is Product Management And Why Is It Important?
Put simply, product management is a strategic function of an organization that sits at its very center, proactively steering its products to commercial success. However, the reality is that product management is anything but simple. On any single day, product managers spend time interacting with the organization's stakeholders, exploring the markets it operates in, collaborating with customers, refining future innovations, working closely with engineering teams, reviewing the products and technologies it leverages to maximize product value, and analyzing collected data points to understand the performance of their products in the market. It’s a hugely varied, all-encompassing role, and not for the faint-hearted. However, if performed well, shareholders, executives, employees, partners, and customers all benefit from a smooth-functioning product management team with capable people, defined processes, and well-managed products.
Product management is heavily involved in all aspects of the product lifecycle, both directly and indirectly. It starts from an initial idea, its assessment, and business case, to prototyping, developing, pricing, launching to the market, managing its ongoing market adoption, measurement of performance metrics, and ultimately withdrawing it from the market once its life is over and events, technology, or other products have superseded it.
Early in an organization’s life, product management is often performed by one or more founders or those closest to the customer. However, as an organization grows, a more formal structure and ownership are required to maximize the product's value, increase market share, build competitive advantage, and increase sales revenues and profit margins. This is where product management processes provide structure to these goals, increasing the likelihood of product success and providing the necessary structures to enable scale.
Effective and performant product management teams have common characteristics, supporting an organization’s strategic growth aspirations in many ways.
Customer Obsessed: The product team should have a laser focus on the needs of the customer and users of the product and how to address the core challenges and problems they face. Product managers should ensure they continue to spend significant time in the market, talking to customers and partners, analyzing competitors, and collaborating with market-facing internal stakeholders.
Strong Ideation: Innovation should be driven by heavy stakeholder engagement. It’s fundamental to setting a comprehensive strategic roadmap and aligning with the overarching organization’s goals. Staff, customers, competitors, analysts, trade bodies, and consultants all have their part to play in providing valuable insight into the needs and priorities of a market or the organization’s ability to execute within that market.
Balanced Investment: Mature product management teams ensure that appropriate amounts of effort are continually invested in discovery, platform technical health, defects, and new capabilities and features. Investing in all four areas ensures a healthy core product platform and improved customer satisfaction.
Market-Focused, Customer-Informed: Aligning broad market expectations with the immediate customer and user needs against the organization's ability to deliver requires a thorough evaluation of product innovations, including required skills, technologies, and the ability to leverage them.
Result Orientated: Defining and monitoring Objectives and Key Results (OKRs) early in the process helps to align expectations as to what the team is trying to achieve. Tying them back to overarching company goals provides the business context and full traceability for all items on the roadmap.
Learn Quickly: Bigger product bets are riskier, but product management can employ techniques to learn quickly about what does and doesn’t work through the use of Minimum Viable Products (MVPs) to quickly learn about what works and, importantly, what doesn’t.
Highly Collaborative: Complex product portfolios with multiple dependencies require higher levels of collaboration to be successfully aligned. Product management teams must learn to listen, learn, and influence through collaboration with internal and external stakeholders.
Execute Consistently: High-performing product management teams are truly agile, able to adapt to the changing needs and priorities of the organization quickly and efficiently. Product management teams are typically highly collaborative with engineering teams, embedded within scrum teams in the constant delivery of new products and capabilities.
An Eye For Quality: While testing product capabilities is often shared across the engineering organization, the responsibility for the overall product quality often sits squarely with the Product Management team. Not specifically about individual defects or limitations but the overall sentiment of its customers and users.
Ready For Release: Operational readiness for the launch of new software is where product managers need to shine, ensuring the smooth delivery to market of new products where all other areas of the business are ready to sell, deliver and support across the organization. Release planning typically involves the product management team evangelizing both internally and externally.
Informed By Data: Key metrics such as customer or user adoption, growth of market share, increased customer stickiness, product revenues, transaction volumes, user interactions, or reductions in customer attrition are all examples of typical metrics for product managers.
In Control: Introducing new products is just one side of product management. Knowing when to end the life of an old, unprofitable, or obsolete product is just as important. Having a defined process for end-of-sale, product retirement, succession planning, and customer migration is critical.
Invest In Training: Product management methodologies such as the Pragmatic Institute provide a compelling and comprehensive framework, including training, from which to address both strategic and tactical product management activities, providing structure for the product management team.
An Eye On The Future: Product Management continues to evolve as a function of an organization. New supporting practices, such as ProductOps, can support team scaling as growth increases the demands on the Product Management team. Product Operations can help support the adoption of the product lifecycle, report on execution metrics, and help acquire and synthesize the various data sources required to leverage analytics and improve performance.
So, with a long list of what good product management looks like, a maturity assessment helps investors, technology, and product leaders benchmark an existing team's capabilities across the whole product lifecycle.
What is RingStones Product Management Maturity Assessment?
RingStone’s Product Management Maturity Assessment service is a deep dive into the organization of the product management function, the team's capabilities, its processes across the whole spectrum of the product lifecycle, and the tools it uses in the day-to-day execution of its responsibilities. The assessment process identifies current strengths, risks, and opportunities and assesses the gaps in its current performance against the desired future state to execute the organization's product strategy.
RingStone’s Product Management Maturity Assessment
During the assessment, experienced RingStone practitioners will analyze how the product team is organized, what skills are leveraged, and how responsibilities are divided, validating the product team's domain knowledge across the market, the company, customers, competitors, product, and their product management competency. The assessment covers the full product management lifecycle from discovery and ideation, design and execution, launch and ongoing management, through to end-of-life, validating processes by assessing one core feature and how it went through the full lifecycle from inception through to being prioritized on the backlog and delivered to market.
The maturity assessment is generally conducted via dedicated discovery sessions starting with how the product team is organized, spanning the whole product lifecycle, and ending with a detailed look at the tooling used by the team to support their day-to-day activities, collaboration, roadmap planning, and communication. In addition, optional interviews with individual members of the product team can be conducted, with a wider company-wide view gained by extending interviews to other key stakeholders in engineering, product marketing, commercial, professional services, and customer success teams. RingStone can interview existing customers for a final assessment to provide a full 360-degree view of the product teams’ performance.
A Product Management Maturity Assessment Can Be Highly Useful When There Are Noticeable Dysfunctions In How The Product Team Is Organized And Operating
Performing a product management maturity assessment can be highly useful when there are noticeable dysfunctions in how the product team is organized or operates on a day-to-day basis, which is demonstrated by ineffective outcomes, inefficient ways of working, or high levels of friction with other areas of the organization. However, in other situations, the product team may have the beginnings of good practices but is looking to scale quickly to support a potential increase in engineering capacity, either internally or via an outsourcing strategy, and need to quickly understand the current outer limits of the people, processes, and technology gaps. This can be particularly true when looking to merge portfolio companies, and a benchmark of the two organizations is required to more firmly understand synergies, the future target operating model, and the roadmap to bring the two together.
The Benefits Of A Mature Product Management Organization
Developing Products That Meet The Needs Of Target Customers Directly
Improves Customer Satisfaction And Loyalty
Product Management is a crucial function that helps organizations develop, launch and grow successful products. The benefits of a mature product management team include:
Customer And Market Centric: Mature product managers routinely make market research a core activity, investing their time to understand the evolving needs of their target markets, the competitive landscape, and customer requirements, helping to ensure their products address these needs.
Constantly Innovating: Mature product management teams actively embrace innovation and are adept at performing experimentation, using their extended personal network to uncover unmet requirements, address product limitations, and identify opportunities to leverage new technologies, such as Artificial Intelligence or Machine Learning, and the options available to them. A streamlined ideation process is critical to discovering new opportunities and creating a pipeline of future ideas for creating new products and services that differentiate the organization within the market.
Improved Cross-Functional Collaboration: Product management best practice looks to effortlessly bring together teams from across the organization, such as engineering, design, marketing, and sales, to form an extended network that complements each other and provides important product insight. High levels of collaboration across the extended network improve product communication across the organization and create a strong bond of collective responsibility against product outcomes.
Faster Time-To-Market: Product managers embracing Agile development methodologies to prioritize features help speed up the product development process, allowing organizations to bring products to market faster, targeting delivered features and future roadmaps based on early customer feedback.
Improved Customer Satisfaction: By developing products that meet the needs of target customers, product management directly improves customer satisfaction and loyalty, leading to increased customer retention and long-term customer value while reducing customer churn.
Better Decision-Making: By automating product data collection, product managers can derive valuable metrics, improving decision-making and increasing the chances of product success in the market.
Improved Product Quality: Through the use of data and direct customer feedback, high-performing product management teams can improve the overall quality of their products, leading to products that are more reliable, user-friendly, and meets the evolving needs of customers.
Improved Product Performance: Analyzing product data and customer feedback allow product managers to continuously improve products and increase their performance in the market, reacting to the insights by feeding back into the product roadmap and dynamically addressing potential customer concerns. This leads to improved financial performance and profitability.
Ability To Pivot: By continuously monitoring market and customer needs, technological advancements, and other impacting factors, product management allows organizations to pivot and adapt as needed, which can help them to remain competitive in an ever-changing market.
Improved Product Team Morale: A successful, high-performing product management team is a great place to work, increasing the engagement, motivation, and passion for the company’s products and services, positively influencing other areas of the business that the team engages with the most, such as Engineering.
Conclusion
Whichever ways that Product Management teams are organized, there are material benefits for private equity investors in ensuring it functions efficiently and effectively. As the owners of innovation, product management drives the value of portfolio companies, enabling a culture of innovation to stay ahead of the competition, improving customer satisfaction, and driving growth and market performance. From ideation to launch and beyond, a well-functioning product management team can identify opportunities to drive top-line revenue growth, deliver operational efficiencies in how products are brought to market, increase the overall valuation for the organization, and help execute post-investment strategies.
RingStone’s proprietary methodology for assessing the maturity of the product management function highlights key strength areas, risks, and opportunities for improvements, delivering a value creation roadmap that ensures the team can step up, delivering increased return on investment, competitive advantage, and customer satisfaction.
About The Author
Neil Penny has spent the last 20+ years as a career Product Owner, Product Manager, and Product Marketeer, leading product teams in their quest to maximize product value and smooth the launch of new products, services, and capabilities. As a practitioner at RingStone, he works with private equity firms globally in an advisory capacity, with an obvious slant toward scalable product management processes and strategic product development. Before RingStone, Neil worked in a variety of different markets, including eInvoicing, B2B Supply Chain Integration, IT Service Management, collaboration, document management, governance, risk and compliance, and more latterly, transport and logistics, where he was responsible for multi-million-pound transport planning and execution platform for manufacturers, hauliers, and retailers. Neil has predominantly worked with small to medium-sized UK-based companies, with both cloud and on-premise products, using traditional waterfall and Agile/Scrum development methodologies. Neil holds a degree in Building Management from Coventry University. Contact Neil at neil.penny@ringstonetech.com.