The Modern Product Manager

Modern product managers are asked to not only ‘own’ the decisions about what gets built (ideation/concepting) - and when (product road mapping) - but also expected to influence more and more every aspect of the launch and go-to-success. At the same time, the surrounding ecosystem is growing with many products increasingly just one element in an ecosystem of related services and businesses. This has led to a shift in responsibilities, from marketing to product managers in understanding the full value chain system

The Modern Product Manager

Product managers have always been the glue that bind the many functions that touch a product ; R&D, design, sales, marketing, operations, finance, legal, and external eco-system partners.  

In most industries (including digital) we observe that the role of the product managers is growing in complexity due to an increased market orientation, a complex portfolio with products and software that are blending in, product life cycles that become more complex - with expectations of new features, frequent improvements, and upgrades - an increased focus on margin optimisation and pricing maturity and a growing subscription economy.   

Unlike most product managers of the past, who were primarily focused on execution and sales support, the product manager of today is increasingly the mini-CEO of their products.   

Modern product managers are asked to not only ‘own’ the decisions about what gets built (ideation/concepting) - and when (product road mapping) - but also expected to influence more and more every aspect of the launch and go-to-success.   At the same time, the surrounding ecosystem is growing with many products increasingly just one element in an ecosystem of related services and businesses.  This has led to a shift in responsibilities, from marketing to product managers in understanding the full value chain system.

Software as a Service (Saas) is making things increasingly complex for product managers

While software-as-a-service (Saas) is becoming widely spread in many markets, these products are increasingly complex for product managers.  Product managers must now learn to build, pack and price multiple bundles, develop up-sell paths and monetization plans.   They need to ensure the value is clearly communicated to the different segments - and they need to monitor usage metrics, ARPU (Average Revenue Per User), Customer Action Cost (CAC) and CLTV (Customer Life Time Value).

With the surrounding ecosystem growing : modern products also need to oversee the whole value chain to understand how the own product contributes in the value creation of the full ecosystem

Is it realistic to have all these responsibilities in one person ?

Three types of the modern product managers

There are three common profiles of modern product managers : technologists, generalists, and market-oriented.      It’s important to select the right product manager roles and structure that fit in you organisation and business model.

Sometimes it makes sense to split your product management in 2 teams : technical and commercial product management.  Sometimes it makes more sense to have generalists and sometimes it’s better to have segment/market managers and product managers working in a team.   

It all depends ; and it’s important to keep this fundamental rule in mind when deciding what kind of Product Management you need : Capabilities follow strategy – and structures follow capabilities.

3 types of Product Managers :

We also observe that the day-to-day engineering (R&D development) role is now typically owned by an engineering manager or scrum master.   
This enables product managers to focus more on their core roles than before, when they were very often managing too much technical projects with engineering teams.

The VC Product Manager Framework (copyrights) provides structure to the different roles of Product Management and  is based on the vital processes and activities of product management.    The VC Product Management Framework can be used as a model to improve organisational product management processes and structure.  See the download area for your copy.

Customer Focus and Voice-of-the-customer integration is important or all of them.

There are, however, differences in how the different types of product managers connect with the (end) users.  While a technical product manager may spend time at industry conferences talking to other developers or support in pre-sales activities - the commercial product manager will typically spend time interviewing customers, listening to the sales teams, research the market dynamics and the value chain, and reviewing usage metrics.  But all product managers should be customer centric.

A good training ground for CEOs … but ensure to be IN business !

Modern product managers are increasingly filling the new CEO pipeline, especially for tech companies.  Sundar Pichai, Satya Nadella, and Marissa Mayer were product managers before becoming the CEOs of Google, Microsoft, and Yahoo.  They learned how to lead teams going from ideation, to product development, planning the road maps, go-to-market - and monetize.

Because many commercial product managers still lack direct profit-and-loss responsibilities, it is critical for these commercial product managers with ambitions to get impact on the (net) margins and monetization - and at least get the reports on the P&L.   It’s extremely important to be IN business, not just being a partner of the business.    

The product manager of the future

Over the years, we expect the product-management role continuing to grow in importance.  Both in B2B technical and  digital markets.   We expect more B2B organisations to invest in both technical and commercial product management (splitting the roles).  These roles will impact the role of marketing and marcom in B2B organisations – with the role of marketing even more impacted if also segment management is implemented next to product management.

We expect that the role of product managers in the growing subscription economy will significantly grow in importance, with increased focus on commercial product management and alignment with marcom/sales channels (incl. online).  Modern product manager will need to upgrade their know-how on how to package, how to design pricing plans and monetize products, services and software – and how to manage the profit model.

And with more and more software embedded in products, a special role for software product managers will need to be designed – especially because the software platform will serve different products.  It’s critical to get the software product-management role right.

Modern commercial product manager will need to spend 30 percent of their time on listening to customers and the value chain/ecosystem.     Such engagement will not be limited to direct customers, but product managers need to connect directly with end users in the value chain instead of trying to get the feedback through multiple layers of sales and intermediaries.

The background of future product managers will evolve to match these different roles.  And a key aspect of the modern product manager’s profile will be frequent transitions between products and even companies.  In the world we are in, it is critical that product managers are constantly learning ; not just new technologies but also from adjacent markets and emerging new business models.   It’s important to encourage modern product managers to rotate through products and markets.

Getting started : Define the type of product management your organisation needs and install the vital processes

We recommend that organizations begin with an assessment of how the actual vital product management processes work – who has which role : Product management, sales, marketing, marcom, R&D, channels, etc interacting in the processes from ideation to go-to-market.   

Once you understand what keeps you away from peak performance, you can start thinking what capabilities you need to improve – draw the to-be processes - and think how to organise it.   We recommend you to build your product management vision first - and then share/discuss it with top management to get full support before you start communicating with your internal stakeholders.

Once you have designed the to-be processes and buy-in, you can start hiring new talent and invest in a capability-building program for existing talent – and roll out.

About the author

Pol Vanaerde is founder of VC – and senior consultant with special focus on product management – market strategy and pricing.
www.vanaerdeconsulting.com