Having learned about maturity levels of supply chain management in organizations during our lectures @HEC, I thought it might be interesting to assess the maturity levels of product management.
- The lowest level can be simply described as “Absence of Product Management”. This means, in that company there is not even the function product management. Please keep in mind that we are not talking about product management in a marketing context. We are defining product management as defining and building digital products for customers.
- The second lowest level can be described as “Alibi Product Management”. In this type of organization there is at least one Product Manager. But the person is not working as a state of the art Product Manager, but much more as a project manager or coordinator. His/her responsibilities don´t include understanding the needs of users and defining the roadmap of the IT teams. The Product Manager in this organization is of low skill level and is typically driven by decisions of executives and/or shareholders.
- “Tactical Product Management” is the maturity level or organizations who have installed product management on a tactical level. The responsibility remains with the upper organizational levels of the company, but the Product Managers are enabled to steer product development on a daily basis. A typical characteristic of this type of company would be that the Product Manager has to ask for approval before launching features and for his/her product roadmap from people who are not Product Managers.
- Organizations who have established product management on executive level can be named “CPO level Product Management”. Here, the most senior Product Manager is reporting into the CEO and is member of the management team. Product Managers in these organizations are having a sponsor on the highest management level and an enabled product management organization. Please note that having a CPO might be possible without being on this maturity level. Sometimes the job title “CPO” is misleading. Criteria must be an enabled product management organization as described in the three lower levels above.
- The most mature level is “Strategic Product Management”. Organizations of this type have a clear product vision and product strategy that have been defined by a Product Manager based on e.g. Design Thinking. A product management organization is supporting the Product Manager on Executive level to deliver products customers will love. The CDO/CPO/VP Product will support the CEO and the CXO suite to align towards this vision and will have major influence on the direction of the company.
Most companies I have seen or I have had interviews with during the last months are on levels 2. and 3. Very few seem to understand the need to establish the product function on CXO level and to see product management as strategic discipline. In the light of the upcoming digital challenges and increasingly changing customer behaviors I consider this as reckless. Without a sufficiently skilled Product Manager on the top of your organization you will fail.