Product Managers have traditionally focused on bringing new products to market, but their role is quickly becoming more complex. Our latest research suggests that the C-suite priority of driving profitable organic growth has begun to filter down into middle management. Heads of businesses and even product-line managers are being pressed for faster growth in revenues and even more growth in profitability. This margin leverage focus (i.e., profit margins growing at x% above revenue growth rate) is putting an end to “business as usual” and forcing many Product Managers to confront stark choices.
Here are some of the important shifts happening in product management today:
- Making Hard Choices. Over-reliance on new products has left many businesses with bulging portfolios. Meanwhile, the search for higher volume growth has led many businesses to enter remote markets where their presence ends up being sub-scale. Any product or market with growth that falls short of either targeted revenue or profitability growth rate deserves a hard look in a portfolio analysis. This sounds simple, but exiting a market or retiring a product is a tough decision with many emotions attached, which helps explain why product-lines tend to grow big and unruly when markets are doing well. Often, it’s not until things get really tough that Product Managers are forced to make difficult choices. Even world-class companies like P&G struggle with this. Cleaning up the portfolio so that resources can be focused on select products and markets is perhaps the most important contribution that Product Managers can make to profitable growth.
- Managing Product Lifecycles. This is another artifact of the obsession with new product launches. Even incredibly well run and successful companies such as Apple and Samsung have faced issues with product oversupply in key markets where substantial stocks of older models remain on shelves even as new products are launched. Not carefully planning for the phasing out of older/alternative models can lead to severe price markdowns, impeding the success of new products and disrupting channel relationships.
- Focus on Customer Experience. Many Product Managers find it challenging to differentiate their products based on features and attributes. In fact, EMM Group research across multiple industries indicates that the highest unmet needs for customers are most often related to their experience of buying and using a product – not its technical features. Therefore, Product Managers that think beyond the traditional product development cycle can identify many more opportunities to fulfill customer needs and differentiate from competitors. This requires consideration of the entire end-to-end customer experience, including operational aspects of how customers are served before, during and beyond the sale.
- Leadership. The Product Manager role is one of the hardest to define in an organization. One certainty is that they must apply influence well beyond their hierarchical powers. This quality of leadership and the ability to synchronize efforts across functional silos is perhaps the biggest success factor for Product Managers, especially those that are broadening their horizons to think about holistic customer experiences and not just about launching the next product.
Product Managers can indeed be the drivers of sustainable, profitable growth in a business. However in many companies, their role must first be redefined to empower them with the ability to make difficult choices.
