Silicon Valley likes to say (with some justification) that it’s where the future is invented. From technical innovation to upended business models, it’s a major force in how we live and work today. So it’s perhaps counterintuitive to realize that one of its fundamental qualities is almost 100 years old.
I’m talking about the role of product management. It’s a core part of today’s technology businesses, whether they’re the next new startup or a giant like Apple or Facebook. It's also a role that’s seen dramatic evolution — although lately product management has returned to its customer-centric roots.
Once upon a time, a product manager was quite literally the person who managed the product. And by that, I mean old-school management. The boss. As laid out by Neil McElroy of Procter & Gamble in a famous 1931 memo (pdf), these managers were “Brand Men” with absolute responsibility for a brand, from sales to advertising and beyond. A big component of that was on the ground interaction with customers and field testing.
McElroy later served as Secretary of Defense and helped found NASA, which is a big leap from toothpaste and laundry detergent. You can see his model at work in these places, though: Think of a program manager at NASA, who has bottom-line authority over every facet of an initiative like putting a robot lander on Mars.
McElroy went on to teach at Stanford, where he influenced a couple of young entrepreneurs named Bill Hewlett and David Packard, making the through line to Silicon Valley and the vital role of product management in today’s app and SaaS worlds plain.
When Brand-Marketing Ruled
In the industry that originated the idea, product management reflected mass-market consumer behavior. Because it was built around consumer packaged goods (CPG) like laundry soap, KPIs for product managers at companies like P&G were very direct: unit sales, market share and profits. So it makes sense that a product manager’s job increasingly specialized in branding, marketing communications, figuring out the right packaging, pricing, promotion and advertising mix. Actual product development was largely in the hands of research and development teams elsewhere in the company.
So a product manager might spend a week working with an ad agency on clever catch phrases or trying to shave a quarter of a cent off the packaging cost of potato chips, while having little input to what was actually inside the bag. Taken to an extreme, this brand marketing-driven approach can result in truly bad ideas like Zima and Pepsi Clear — or the Ford Edsel, a commercially disastrous product supported by reams of market positioning and internal objectives, but developed without testing how those ideas would affect users in the real world.
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Silicon Valley's Take on Product Management
Product management evolved in a different direction in the technology industry. Hewlett-Packard’s founders wove what they had learned at Stanford into the DNA of their organization. From there, it rapidly spread to the other young tech manufacturing companies shaping the nascent Silicon Valley.
This take on product management focused on development and production more than market positioning — more like NASA’s moonshot than P&G’s management of its brand portfolio. It was optimized for bringing new materials and technologies to market. It was essential to the development of the industry’s technically complex products with long development cycles and closely synchronized supply chains.
But in this environment, product managers became increasingly focused on managing the processes of production. That was fine for the industry’s early footprint as manufacturers of semiconductors that went into someone else’s end product or selling expensive hardware to big corporations. But wall-long Gantt charts do little to help foster understanding of user behaviors or to persuade people to try a product.
Today’s Tech Economy and the Evolution of Product Management
Even if the separation of product development from user experience once made sense, it doesn’t for the sorts of products that dominate today’s consumer and technology markets: SaaS and web apps, financial services, and ecommerce platforms. For business like these, functions of product development, marketing and customer engagement must be deeply engaged to succeed. It’s why product management has once again evolved.
The arrival of agile development really gave this impetus, since it liberated product managers from being leashed to rigid, years-long roadmaps. Now they could devote more attention to customer engagement and experimentation in pursuit of iterative improvements and growth. And user experience moved from a secondary concern to a front-and-center aspect of product origination, discovery and development.
Far from the command-and-control model of the early Brand Men and space mission program managers, product managers and engineers ride in tandem. Agile development frameworks like Scrum are built on communication and collaboration.
And the growth hackers at lean startups pressed this home even more when “continuous improvement” became a mantra for both the product and the business behind it. Increasingly, product managers sit with company leadership and help make the decisions that drive the the future of the business.
The end. Right?
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The More Things Change ...
Of late, it seems we’ve entered yet another change state for product management. It’s definitely an evolution, though at first glance it might look like devolution.
As strategic, user- and market-facing responsibilities like growth, conversion and retention get rolled into the job descriptions of modern product managers, some organizations are finding the job’s becoming too demanding and unwieldy for a single person. A SaaS product manager now finds she or he isn’t just responsible for managing development, user focus, strategy and business model needs of a single product, but for multiple related products, many of which sprang from growth surfaces of the original into new extensions or complementary apps.
It may be that the challenges are too massive and complex for any one product manager to take on successfully. Whether it’s the jack-of-all-trades syndrome or the recognition that increased multitasking delivers diminishing returns, we’re now seeing some reevaluation of the current “superhero who does it all” view of product management. Many businesses are beginning to organize customer engagement, strategy and product development responsibilities among different people within product teams. (They’re sometimes called inbound product managers and outbound product managers, or technical product managers and strategic product managers.)
But there’s one distinction from the past: rather than being separated into often-disconnected organizations like development and marketing, these roles are conceived as fraternal twins within the same product management family: deeply intuitive of each other’s needs, working closely and collaboratively.
One example? I recently was chatting with a PM from a successful SaaS firm with a major enterprise app portfolio. I was surprised to learn the company has more than 500 product managers, but just a dozen product marketers. Even as their business has grown to billions of dollars in revenue, they fundamentally still rely on the strong product management skills that got them there.
It’s a telling example. Businesses increasingly are differentiated by their user experiences and rewarded by user engagement. It’s those who know users best who can have the most impact.
Product Management Comes Full Circle
Even in an industry like consumer packaged goods — the home of O.G. product management — highly-siloed approaches of the past have been changing. It’s why those companies are adopting growth hacking strategies to cope with proliferating competition and the pressure to eke out every possible advantage. (Though when CPG brands learn the wrong lesson from Silicon Valley rule breakers, they seem to get it spectacularly wrong.)
Growth hacks aren’t the reason for the dominance of today’s tech economy. Silicon Valley’s success comes in no small part thanks to the industry’s success at fostering product managers with a deep sense of user empathy, an understanding of user engagement, and sound product development practices.
Seen through that lens? This evolutionary stage in product management isn’t a seismic shift, just a logical re-alignment. It’s not the narrowed scope of what McElroy’s Brand Men became, or the long march of early Silicon Valley product management, but an embrace of their best qualities combined in service of modern software development.
The person with the product manager title may focus on one area, delegate others, or build whatever structure works, but everybody on deck knows who’s really calling the shots: the customer.