Product Management by Committee?


I came across an interesting blog post entitled “Product management by committee. How sustainable is it?“.

The topic is a very good one as many early stage technology companies are founded and launched without a dedicated Product Management function. They’ll likely have R&D, Sales, Marketing, Finance and maybe HR at an early stage, but no dedicated Product Management headcount.

The blog post argues that:

…as companies approach and move through the $1.5M to $3.0M annual revenue milestone and/or the 20-25 employee threshold, they will see the breakdown of the product management by committee methodology. Most notably, committee members find it a challenge to attend meetings and to focus on the details of what needs to go into the product.

In very general terms, the above makes sense, but I don’t believe there is anything specific or magical about the $1.5M-$3.0M revenue range or the 20-25 employee range that necessitates dedicated Product Management.

The questions really should be:

  1. What are the goals of Product Management?
  2. When is the best time to bring  an experienced Product Management professional into the company?

Product Management Goals

The goals of Product Management, particularly in early stage companies is to bring a deep understanding of market problems and needs into the company and help direct internal efforts to optimally address those needs.

Notice that I didn’t simply say “define product requirements”, or “work with Development” or anything like that.

Product Management is a core BUSINESS function.

  1. It’s about ensuring that the limited resources of the fledgling company are focused on the right activities, problems, domains etc.
  2. It’s about maximizing the business opportunity by aligning product strategy with business objectives.
  3. It’s about minimizing the thrashing that goes on when products are brought to market that don’t truly address market needs in a clear, valuable and differentiated way.

How many times have you seen companies bring a new product to market, only to have to go and rework significant parts of it for Version 2 or even Version 3?

If Product Management has done it’s job, then V1 will have value for a specific target audience. Version 2 can build on that as can Version 3, but that’s a very different scenario than having to retool or rework product in later versions.

When is Product Management needed?

The best time to bring experienced Product Management in depends on the nature of the company, the market(s) the company is in, and the experience and background of the management team.

There is no right answer here, but when thinking about dedicated Product Management, the earlier the better. For an enterprise software company, given the amount of upfront investment that is usually required, as well as the types of long evaluation and sales cycles needed, Product Management should be there from day 1!

Why? Because the function is that important! Given the complexities of enterprise software, both from a technical and business perspective, who better to focus on minimizing time-to-revenue than experienced Product Management?

A misunderstood business function

It’s too bad that most people, even technology veterans place Product Management as a nice to have and something that others can do part-time as a committee.

Anyone who’s worked in a startup knows that there are always 100 things to do, and time to do only a fraction of them. So how focused will a committee of people be, who have full-time positions doing other things?

There are no absolutes here. Companies have succeeded without dedicated Product Management early on. Others have failed even with Product Management. But, from a macro level,  for any reasonably complex market domain — enterprise software being one example — someone — whether it’s the CEO or CTO or some other executive —  has to be focused on ensuring several things:

  • there is clear alignment throughout the company on the key business issues the company’s offerings will address
  • that a market segment sees (or will see)  the offering as valuable enough to pay for it
  • that the offering has a clear competitive advantage over other potential solutions
  • that the competitive advantage is sustainable for some reasonable period in the future
  • how the offering will evolve in the future to grow revenue and/or market share

These are not simple questions to answer, and certainly not in dynamic markets with complex market needs, buying cycles, technological evolution and many other variable factors. Given the critical nature of finding the best answers to these questions, does it make sense to split this up across several people who will do this “part-time”?

Saeed

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12 responses to “Product Management by Committee?

  1. Pingback: Christine Midwood » Blog Archive » The role of product management

  2. Jim Holland

    The systemic problem with startups and when product management is established is usually founded in the personality and leadership of the company first, and as you mention watching several releases fail before getting a product to market. Most startups have either great entrepreneurial spirit or strong technology leadership, or both, and believe they can provide the same functions of product management. This may be done “by committee” or assignment as you suggest.

    What type of success would startups have if every VC or investor “strongly recommended” that product management be in place, or that a senior product management consultant be engaged to provide product management leadership for a company filled with energy and ideas.

    • Jim,

      Thanks for the response. I think that part of the problem is the immaturity of high-tech product management. Everyone understands sales. Everyone understand Development. Most people understand Marketing. Not enough people understand Product Management. If they did, it would simply be a given that PM talent is required very early on.

      Some people think PM is about feature prioritization. That’s like saying Sales is about prospect demos. I’ve blogged about this here….http://tr.im/kHml

      Even Product Managers don’t always understand Product Management and until we get rid of that problem, not much will change I fear.

  3. Larry McKeogh

    When is the right time to bring in a PM? As suggested it is going to vary based on market and technology. I think that PM by committee is probably an okay solution for the early stage company regardless of market. By early stage, I am implying pre-FCS.

    At day 1, the founders and initial development team understand the problem and is creating the solution. It is alright for engineering to have customer contact. Especially when the customer base is extremely small like during startup.

    Once a solution is available or very nearly created (Beta) I would look to an experienced PM to assume customer communication tasks and widen the customer input pool. At this point the feedback and customer input should begin to pick up speed. The good PM will filter and guide the product development queue. The goal being to enable development to continue their main task without distraction and iterate as fast as possible. Thus capitalizing on a startups strengths of speed and agility.

    • Larry,

      Thanks for the comment. One thing to keep in mind is that Product Management is responsible for more than guiding development. There’s the whole area of value proposition, buyer criteria and ability to generate sufficient revenue. This all leads feeds into the go-to-market plans.

      i.e. What people need in the product is good, but is there a buyer and how much will they pay? How will it be sold (direct, channel, partner) etc.?

      I know of one startup that has built and add-on product to a larger enterprise software product. User really seem to like it. It addresses a clear problem and was built based on market input.

      BUT, what they are finding now is that buyers (who are not the users in most cases) aren’t willing to pay very much for the product right now. They have a PM working with them to work through this and figure out where the value prop lies and whether there is a sustainable revenue stream that can come of this.

      The point here is that PM is often thought of as being product/features/requirements focused without associating the full business oriented role that is absolutely critical for product success.

  4. I completely agree. It is unfortunate that people have this misconception that product management isn’t needed in a start-up, for example. I guess in reality, it is the CEO or some other visionary in the company. The problem is that they may not have the skill set required to really understand the market and the ability for the idea to resonate with potential customers and actually make money.

  5. Absolutely. I have the experience you describe where product management was “brand new” – definitely interesting. I’m curious in the past six months if others are starting to see some of the startup stresses and patterns emerge in what had been mature organizations? Is a committee forming all around you the product manager due to the economic situation?

    Could it be that the trigger is not the size of the company but the financial pressure that the organization is under. When difficulties arise managers and people in leadership generally have tendency to want to be deeply involved. More and more pile on, things slow, decisions get questioned, direction becomes unclear…all from multiple people dealing with fear / uncertainty / doubt?

    Is the $750M company you are driving product direction for starting to look more and more like a startup?

  6. Pingback: Tastes Like Chicken » The role of product management

  7. Many place this area of responsibility in product marketing as well which makes it more confusing. As an industry, we do ourselves no favors with the lack of clear definition of roles. The concept of product marketing, product management and product development are often all in shades of gray. It gets more challenging (or more clear depending on how you look at it ) in early stage, because all of this is one person.

  8. I am in the process of changing employers here in the UK due to a downsizing of my current employer who now thinks they do not need product management – read you cost too much. What I have found interesting in looking for a new role is the number of companies who have woken up to the fact that they need product management AND that their product management team need to look at the business rather than just the features and functions of the product. This is working out in some companies creating a product management function when before they relied on entrepreneurial managers guiding developers or existing product managers getting fired for not looking at the business. I totally agree with one of the other comments that this is very much a sign of the times.

  9. Pingback: Product Management by Committee – pt. 2 « On Product Management

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