What's In YOUR wallet, Product Manger?

So here’s a minor topic that might have some real significance for all product managers: what do you put on your business card? Yeah, yeah, I know that we’re living in the age of FaceBook and LinkedIn but business cards are still what we exchange when we meet people face-to-face. What this means is that business cards still matter. What’s on your business card?

At this point in my career I must have had no less than 20 different business cards. Every once in awhile I’ll see a collection of them huddled together in the bottom of some drawer somewhere and I’ll have to smile as I realize just how much my description of myself and what I do has changed over time. I’ll never forget when I got my first opportunity to sign up for business cards. This was it, I had made the big time. Despite being a lowly software engineer now I was finally going to have an “adult” way to communicate to others just how important I was. As with all large firms, most of the format of the business card was pre-established. However, I was given free rein to add my job title just under my name. Hmm, what to put? The first time out of the gate I put what the company listed for me in the corporate directory: “Software Engineer IV” or whatever.

It turns out that this was a big mistake. Outside of people who worked for my company, nobody else in the real world knew what a Software Engineer IV was! I’d get polite smiles and then the card would quickly disapper into someone’s pocket to probably be thrown away when it came time to do laundry.

A few business card iterations later, I started to get smarter. By this time I had moved over into the world of Product Management and so I changed my job title to “Product Manger”. This was much better. I don’t think very many people knew what a Product Manger was or did, but they sure thought that they knew what a manager did and so upon receiving my card they slotted me as a mid-level manager and left it at that.

The promotions came over time and whereas I was not yet a Vice President or a CIO yet, I had become a Senior Product Manger. At the next opportunity I updated the business card title to read “Senior Product Manger”. This seemed to garner me just a little bit more respect when I handed the card out. Once again, I don’t think that very many people knew what I did; however, they seemed to believe that I was now in the upper echelons of mid-level managers.

I was still finding that since folks didn’t actually know what a Product Manger does, they were struggling to pigeonhole me based on my title. The trick here is that if people can’t figure out quickly where you fit in the totem pole of responsibility, then they will end up not even bothering to try. I felt that one more evolution was required. I ended up dropping the “Product” and so today my business card reads simply “Senior Manger”. Although less descriptive, I’ve found this title to be of great use at trade shows and when meeting with vendors. No, they still really don’t seem to know what I do for the company; however, they are easily able to realize that a “Senior Manager” is someone who must be very important. This means that they treat me as being someone important because they don’t have any reason not to.

One final note, with my obtuse title the very first question that I get asked is “what do you do?” This is a make-or-break question. If I identify myself as a Product Manager, this will get me classified as a low-level worker bee because nobody really knows what a Product Manager does. Over countless encounters like this I have honed my response to reply with a quick “I make problems go away.” In most cases, this generates quiet respect and there are no more probing questions.

How does your business card currently describe you? Did you get to pick your title or did the company pick it for you? Do people that you give your busienss card to understand what you do? If you could change your title, what would you change it to? Leave a comment and let me know what you are thinking.

Technorati Tags: business card, IT Product manager, job description, job title, product management, product manager, product manager jobs, product managing, software product manager

The Virtual Fence Seems To Be Missing Its Product Manager

The Wall Street Journal ran a story today about the U.S. Customs and Border Protection department deciding to put off their grand plans for building a futuristic “virtual fence” between the U.S. and Mexico. The fence is being built by Boeing and was originally designed to cost $20M but has become much more expensive over time: the project is currently priced at $8B and could triple through 2013!!!

Ok fellow product managers, I think that we can all agree that something has seriously gotten out of hand here. What’s interesting is that it didn’t seem to start so badly. When Boeing won the original contract, they had stated that they intended to create “…a network of off-the-shelf technologies that would be a powerful surveillance system that could rival what the military uses.” That sounds reasonable, doesn’t it?

Things started to go bad awhile ago. The virtual fence system was going to be tested on a 28-mile stretch more than a year ago; however, even this piece of the project is not yet operational. Now the virtual fence’s debut is scheduled for sometime in 2009.

So what went wrong here? There are probably lots of factors; however, from a product manager perspective I suspect that we can probably put our fingers on a number of the key ones. First, it looks like the original product was to be created by a relatively well defined $20M project. That was probably a manageable product. I’m going to guess, but I’ll bet you that it was for a proof-of-concept and that it would have resulted in a small test bed (maybe a 1 mile fence?) Clearly, something happened to cause this initial project to grow out of control. I’m going to blame money and time.

Somehow the U.S. Customs and Border Protection department seems to have gotten their hands on a LOT of cash if they can now fund an $8B fence. I’m going to guess that they got some funds and then went back to Boeing and said “Let’s add some bells and whistles”. Oh, and let’s make the pilot project 28 miles long. Apparently nobody on the Boeing team (hello Mr./Mrs. Product Manager!) stood up and said “Let’s complete the first pilot before we start adding all of this additional work.”

The issue of requirements probably deserves a quick discussion also. If a project has grown from $20M to $8B, do you think that the requirements are all up-to-date? Based on the fact that there appears to be no phased delivery of the virtual fence, just a planned “Ta-Da” moment when it all gets delivered, I’m going to predict that there are multiple versions of requirements for differerent parts of the fence and that they don’t really fit together very well. Just wait until it comes time to get the differnt pieces of the system to work together. Oh yeah, I guess they already know that - that’s why the project is over a year behind schedule.

I could go on, but I think that you get my point. If I had to make one more guess, I’d be betting that Boeing has cycled through Product Mangers on this project more than once. In fact, I’ll bet there are a bunch of product managers working on it who keep turning over. We’ve all seen things like this happen and should know how to spot the warning signs: poor or too many product requirements, pilots that get abandoned in favor of more lofty goals, sudden funding that must be used NOW that causes the project to grow to quickly, etc.

If you ever find yourself working on a product that starts to show any of these charactistics, then perhaps you might want to remember the Taco Bell jingle and make a run for the border…!

Technorati Tags: Boeing, border, new products, product manager, project management, requirements, virtual fence

Pricing is the moment of truth - all of marketing comes to focus in the pricing decision.

– Raymond Corey, Harvard Business School

Have I ever told you just how much I love pricing? In the world of product management, there are so many talented people that I always felt both jealous and just a little overwhelmed. I mean there are product managers who have an amazing depth of product knowledge, there are product mangers who know their markets inside and out, and of course there are those product managers who know how to get anything that they want done within their company done and done quickly. How the heck was I ever going to measure up to these gods of the field? It took quite sometime; however, I’m pleased to say that I found my niche - pricing.

I discovered pricing somewhat by accident while working for a large European telecommunications equipment provider. Once upon a time, when I had a brief moment to stick my head above the waters of daily product management activities, I realized that none of my peers wanted to touch anything to do with pricing. All pricing related activity was shoved off onto the finance department from which magical prices would reemerge. In a nutshell, nobody had any clue as to why we priced our products where we did. I didn’t take any action on this little nugget of information at the time; however, I started keeping my eyes open.

My next surprise came as I started to get some more insight into how the sales teams were selling the product. The first thing that seemed to go out the door was the list price. After that, it seemed to be a race to see how low we could drop the price in order to get the sale. I was seeing discounts as large as 50-60% on relatively new products. Without knowing any better, I assumed that whatever magic price the folks in finance had set was able to withstand this kind of massive discounting. It turns out that I was wrong.

Collectively as Product Managers, we spend our time on capturing a larger share of the market all the while increasing customer satisfaction. We’ve been taught that if we can do these things, then somehow big profits will somehow magically follow. Unfortunately, there never seems to be enough profit magic to go around in the world these days…

Most firms didn’t worry all that much about pricing in the past. As long as you knew how much a product cost to make, then you could tack a generous profit margin on top of that and you were set. However, this all changed in the 1980’s. This is when the long established market leaders started to get their clocks cleaned by new startups that didn’t seem to care about market share. Instead, these new competitors specifically targeted the larger firms most profitable customers (known in the biz as “cream skimming“). This was followed by a wave of companies being taken private, having their product prices raised even as market share dropped and yet still starting to rake in huge profits.

Just as a final confirmation of the importance of pricing and making a profit, need I remind you of the dot.com era? All those new companies went on a footrace to try to build the largest market share, profits be dammed. Ooops, when it all ended the quickest runners went bankrupt while the few that had actually still focused on profits were the last men standing.

I finally had a chance to sit down and talk with some of my friends in the finance department over lunch and I asked about the the magical process that they went through to set prices. You can imaging my surprise when I found out that all they were doing was taking the cost of the product, adding the current “company overhead” margin, and then adding a 35% profit margin on top of that with the expectation that it would be discounted no more than 10%. Ouch - talk about simplistic pricing! My friends pointed out to me that the company was more concerned about growing revenue than profits at this time and so that was why I was seeing some fantastic discounts being approved.

Needless to say, this was sorta like discovering that Santa wasn’t coming this year. The secret pricing knowledge that I thought that Finance had really wasn’t there - the emperor had no clothes! I spent much time after this focusing on learning as much about pricing as I could and that information has served me well over the years. In future posts, I’ll share my secrets so that you too can become a master of product pricing.

Do you set the prices for your products or is it handed off to another department to do? Does your company use a sophisticated pricing strategy or do you basically set it and forget it? Is company profitability something that you are under pressure to increase you product’s contribution to? Leave a comment and let me know what you think.

Tags: product manager, pricing, profit, revenue, new product development

I had a chance to talk with one of my friends the other day who is a product manager working in the telcom space. Carol is basically happy with her job, but she’s tired of always gathering requirements and she is already starting to think about the next step in her career - becoming a Director. She told me that she was thinking about getting an MBA; however, she had not made up her mind yet as to if it would be worth the time, energy, and expense required to get one. She wanted to know what I thought?

Just a little background info for you here: I’ve collected four university degrees. I’ve got a BS, MS, and PhD in Computer Science and then I went on and just for good measure I picked up an MBA with a focus on Marketing. All in all this took me about 15 years to do. Because of the time, energy, and expense that I’ve gone through I felt that Carol was talking to the right person!

The first thing that I asked Carol was where she wanted to take her career and what she thought that she needed to do to get there (besides getting an MBA). She said that she had been doing some studying of the last four or five IT people who had been promoted to a Director position. What she had found that they had all been at the company for at least 5 years, they had been associated with a successful project, they were well known to the Executive Director that they would be reporting to. She then said that only two of the five new Directors had an MBA - the other three had at least a Masters technical degree.

Carol had done her homework! We then spent some time talking about what you can expect to get if you get an MBA. Assuming that you can’t take time off from your job to go to school for two years, then you are probably looking at going to night school for 4-5 years. I realize that there are other options such as the University of Phoenix and Executive MBA programs; however, my experience has been with the traditional butt-in-a-classroom-at-night approach. One of the first questions that I asked Carol was if she expected to be living where she was right now for the next 5 years - nothing could be sadder than moving half-way through a program! Carol said that yes, she expected to be in town for the next 5 years.

I got my MBA for two reasons: I wanted to have the vocabulary that was needed to work with the people who are running the business and I wanted to network with other people who were at the same stage of their career as I was. In the end, I feel that I got the vocabulary that I wanted. A lot of that vocabulary has to do with finance, organizational behavior, and marketing and these had been things that I didn’t know much about before starting my MBA.

The networking with other folks who were working on their MBA didn’t work out as well. When one attends the big Ivy League schools to get an MBA, you have the advantage of moving though your courses with your peers in lock step. The MBA program that I was in had more people in it and so we were spread out both over time (some people completed in 3 years, some took as long as 7 years) and in courses - there were a lot of courses offered each semester. This meant that few close relationships were formed that lasted more than a semester or two. In my case I moved out of town after completing the degree and so the value of the networking was even more minimized. All that being said, I believe that if you went into the program with networking as a key goal, you could build up a healthy LinkedIn network by the time you were though.

The final benefit of getting an MBA is that you get a chance to be exposed to a great deal of business information that you may have heard of, but never had a chance to study before. Depending on what your background is, this material may be very straightforward. Unlike technical degrees, an MBA requires you to work in teams, give in-class presentations and really doesn’t have that many problem sets to turn in. Rather, questions require wordy answers - you have to memorize a great deal of information that does not have a formula or numbers associated with it. I found the studying to be easy because it was all new. It kept my interest and was easy to memorize.

After I had shared all of this with Carol, she decided to go ahead and take the GMAT in order to apply to enter an MBA program. What helped her to finally make her mind up is that she took a look at the people who would be her competition for the next Director position and decided that an MBA would set her apart from them.

What do you think about Product Managers getting an MBA? Do you think that it helps make them better Product Managers or is it just so much window dressing? At your firm, do people with MBAs seem to go higher, faster in their careers? Leave a comment and let me know what you think.

Tags: MBA, GMAT, product manager, product manager jobs, software product manager

Requirements - don’t we all have a love ‘em / hate ‘em relationship with them? You can have the best product team in the world, an amazing entrepreneurial spirit, and yet if you screw up the first step in a product launch, the requirements, then you’re basically dead in the water. I’ll probably take some hits for this next statement: you can also screw up by spending too much time trying to build the perfect requirements for your product. Great - damned if you do, and damned if you don’t. What’s a hard working product manager to do?

Researchers at the University of Florida have discovered that as much as 80% of the rework that has to be done on a development product has its roots in defects in the product’s requirements. What this means is that no matter what development methodology your team is planning on using, one of the largest opportunities for an IT organization to improve the quality of the products that it creates is to find a way to capture requirements correctly.

About 10 years ago I had the opportunity to work with a colleague whom I’ll call Neil. Neil was an excellent product manager and his heart was in the right place - he really wanted to do a good job. On the last product that he had worked on the requirements were all screwed up. This time around he swore that things would be better. He not only interviewed his customers as to what they were looking for, it would be more accurate to say that he grilled them. He wrote, rewrote, and rewrote again the product requirements. He also held big meetings where everyone came together and nodded that the requirements were exactly what they were looking for. (You know how this story turns out!) Neil’s product was a complete flop. The customer took one look at it and said that they weren’t going to use it because it didn’t fit with how they did their work. Argh! Neil had done everything classically correctly - what went wrong?

Actually, Neil had screwed up in three major ways that we’ll now talk about so that the same fate doesn’t befall you. Here are the three secrets that every Product Manager needs to know when it’s time to collect product requirements:

1. The Customer Is Never Right: One of Neil’s biggest errors was listening to his customer. What he should have done was to listen to their business processes. Ultimately the role of every product is to solve a problem. If you just listen to the customer’s description of the problem, then you may end up creating a solution that doesn’t fit in with how they do their work. Instead, take a long, hard look at where the problem fits into their business processes and you just might discover that the correct solution looks nothing like what they described to you.

2. Good Enough Is Good Enough: You have to draw the line somewhere and stop the requirements gathering process. Neil couldn’t do this - he was on a Don Quixote quest to create the perfect all encompassing product requirements. Instead of thinking of requirements as being written on stone, try thinking about them as having as many layers as an onion. In order to get thing started, you need to have the first complete layer of requirements. You can then refine, refine, and refine some more while the project has already started. Perfection is never attainable and you’ll waste a lot of time trying to get there.
3. Dedication Is Required: All too often product requirements are not “owned” by anyone after they have been created. What this means is that the orphan requirements quickly become almost useless because of product development decisions that get made on an almost daily basis. However, if someone on the product team is given the responsibility of keeping the requirements up-to-date and ensuring that they are a living, breathing document, then they will have value both at the start and the finish of the project.

There you go, 3 simple secrets that can transform how a product manager collects, uses, and manages product requirements. Now if only keeping the product team aligned was so easy…!

So tell me - how have you gone about collecting product requirements? Are your product’s requirements living requirements or should they have been buried a long time ago? When do you draw the line and stop collecting requirements and start developing the product? Leave a comment and let me know what you think.

Tags: new products,product manager,requirements management, product lifecycle

One of the key differences between a product manager and a project manager is that a product manager truly needs to motivate others to do work for him/her. A project manager can get away with just reporting on the current status of a project, a product manager needs to make that product successful. High-commitment, high-performance (HCHP) IT leaders realize this and have come to realize that they won’t be able to be successful unless they can find a way to create a purpose that can be shared across the entire product team.

As our product teams spread out farther and farther across the globe, our ability to create this sense of shared purpose become even more difficult. Product teams that are successful have to share more than just a common employer. Their IT leaders have to spend a lot of time, energy, and effort in creating a shared purpose that will have an emotional appeal to each member of the team. This can go a long way in developing an entrepreneurial spirit within the team. How’s that for a real soft skill? Every successful shared purpose has the same three components:

• it allows the employees to create a better world in which to live in,
• it allows them to deliver performance that they can all be proud of, and
• by subscribing to it they will be able to be in an environment in which they can personally grow.

Each component of this type of shared purpose both helps the firm as well as acts as a powerful motivation tool for the employees working on the product.

Creating a better world in which to live in. Although we may all be working together on a product, what are we doing to improve the world in which we live in? This can take several different forms. Doing work in the community as a team, collecting funds to help people in remote areas, etc. all allow the team to pull together on an issue that is outside of work. However, this bonding then spills over and ties the team together more closely.

Deliver performance that they can be proud of. If the product team is not being recognized as a high performance team, then the people working on that team won’t be getting fulfillment from participating. At the end of the day, the best workers really want to work with the other best workers. If it is at all possible for a product manager to choose who works on their product, then by all means select only the best workers. If not, then you need to find ways to get peak performance out of your team.

Be in an environment in which they can personally grow. Ultimately we all want to have an opportunity to reach our own personal peak potential. The only way to do this is to ensure that the job of every person who is working on the product is both personally fulfilling and one that they can get excited about. What this means for a product manager is that you need to be constantly be working to ensure that everyone on the product team is being challenged and has opportunities to grow.

Whew! Being one of these HCHP leaders sure seems like a lot of work. All this discussion about what they have to do and we’re not even done yet. Next time we’ll talk about how you can keep it all in perspective…

How do you build a sense of shared perspective for your product teams? Have you ever tried to get the team to work together on a task that was outside of work - how did that go? Do you feel that it is your job to make sure that everyone on your product team is being challenged or do you think that that is the job of other mangers and HR?

Tags: purpose, project management, product manager, performance, personal growth

Last time we spent some time talking about high-commitment, high-performance (HCHP) companies and alluded to the fact that their IT leaders had found a way to balance between managing products and managing people. I want to be able to do that! Perhaps they can teach us Product Managers something…

As a product manager, we are really under incredible daily pressure to meet the performance demands of our investors. All too often we don’t view our upper managers as investors; however, at the end of the day that is really what they are: they have decided to spend money on our product and not something else so clearly they expect a return on that investment that is larger than the other options could have provided. If you don’t meet this need, then give it up - nothing else really matters.

How can you push for the superior performance that will be required in order to meet your management’s expectations? In many cases you’ll be called on to make extraordinary decisions and even implement unconventional ideas. One example of this would be recommending that your product be killed if you came to realize that it had no hope of being successful. How many product mangers that you know would have the guts to do that?

Having the courage to make big decisions is great; however, it means nothing if you take the commitment of your team for granted and end up having your decisions destroy the delicate social fabric that holds your organization together. Really good Product Mangers find a way to personally create a link between the people who are doing the work and the results that they must deliver.

I can hear you now saying “great words, but how do I do that…?” You do it by simultaneously combining four different strategies that will allow you to hold the center and not stray off course:

1. Earn Trust: Product Managers need to earn the trust of everyone who is working on their product. The ONLY way to do this is to be open with your team and to always share the truth with them - get caught in one lie or half-truth and the game is over.

2. Engage Deeply: Build a close connection with everyone on your team so that when you interact with them it can be direct and personal.
3. Create a Focused Agenda: In order to mobilize a group of people, a Product Manger needs to have a very clearly defined and focused agenda that can be communicated and bought into by the entire team.
4. Build Leadership: a Product Manager can not be everywhere at all times nor can he/she do everything. This means that the Product Manager needs to be building a leadership team within the product team so that progress can continue even when the Product Manger is not available.

Assuming that you can pull this off, you still have not achieved everything that HCHP IT leaders can do. Next comes the challenge of creating a sense of shared purpose for your team…

So do you have what it takes to be a HCHP Product Manager? If you were in charge of a product that had no hope of success, would you have the courage to kill it? Have you ever managed a product that should have been killed early on? Leave a comment and let me know what you think.

Tags: trust, engagement, agenda, focus, leadership, product manager

Nobody ever said that being a product manager was going to be easy, and I think that we can all agree that it’s a tough job. There’s been a lot of talk about finding a way to certify product managers by making them go back to school; however, I think that at the heart of the task is the need to achieve a balance between the product and the people working on it. No, we’re not CEOs of a the company, however we are ultimately CEOs of our products and too many of us view our organizations as being either product or people focused.

Look, we are all under a great deal of pressure all of the time. Our budgets are too small to begin with and will get cut even further when the company runs into a tough quarter, people leave the project, other departments don’t want to work with us, and don’t even get me started on outside vendors and suppliers. Yet, still we are ultimately responsible for fixing problems and creating and delivering a successful product. I will confess that when I’ve been handed a new product to manage, I have the habit of quickly scoping my vision down to the product - what needs to be done to make it successful, people be damned.

Russell Eisenstat is a former Harvard Business School prof has been studying CEOs who do a good job of balancing the product / people scale correctly. There is a great deal that product managers can learn from Russell’s work. What would any effort be worth if there wasn’t a clever acronym and so Russell has come up with the term HCHP which refers to “High-Commitment and High-Performance” firms & leaders.

So here’s the question that we product managers need to find an answer to: how are successful leaders able to resolve the necessary tensions that exist between their quest for creating profitable products and their desire to build a sustainable team that has a high-commitment level? As a product manager I personally feel that I’m motivated by something much deeper than short term profits. I feel a sense of responsibility to leave the company in a better position than I found it. This means creating a successful product AND creating a successful team.

Russell has some suggestions and I have a bunch of things that have worked/not worked for me. Before we jump into the details on how best to achieve this balance, which side of the fence do you fall on: are you a product person or a people person? How has this worked out for you - do your products succeed and do your teams stick around? Leave a comment and let me know.

Tags: people, new products, product manager, product managing, CEO