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Hello, this is JJ Rorie, Vice President at Sequent Learning Networks. In our Masters of Product Management podcast, we tap into the experiences of people who work in and around product management to help you learn and grow in your product management career.
I am a product management junkie. I love to consume content on product management. It’s my job, of course, so I want to keep up with what’s happening in the PM world. But I am also a product nerd. I find it fun.
Most often when I am looking for content on product management, I find content centered around how to make great software and technology products. How to prioritize a backlog. How to manage tech debt. How to increase MRR – monthly recurring revenue. Kanban boards, scrum masters, story points, development velocity, and so on.
This is all very important, of course, and should continue to be produced. There are a lot of software product managers out there. And, to be sure, some of the information is relevant for any product manager, regardless of the product they own.
Today, however, I want to talk a bit about non-software products. About the chair, you’re sitting on. The drywall and wood used to build the room you’re in right now. The engine that powers your automobile. Those heated seats are, frankly, the best part of automobiles these days. The refrigerator in your kitchen. And the list goes on and on.
When I was in product management and product leadership roles, I worked mostly on digital products … data and analytics, digital media, personal health apps. And in my work as an advisor and trainer, I spend time with product teams across various industries, most of them physical rather than digital products. So I have a broad perspective of the similarities and differences in being a product manager for a software product versus a physical product.
Is the product manager role different for a software product than the PM role for a physical product or a service?
My answer is that most of the role is the same, but there are some real nuances that matter.
You may have seen a popular graphic, by Martin Eriksson, founder of Product Tank, co-founder of Mind the Product. A very brilliant thought leader in the product management field. About 10 years ago or so, he introduced an illustration… a Venn Diagram that defines product management and the product manager role as the intersection between business, technology, and user experience or UX. So picture that Venn diagram… the three circles of the diagram are Business, Technology, and UX, and where they all intersect is the product manager.
I think that’s a really good, clear way of looking at the product manager role in a software company. It makes sense at a high level.
But in a physical goods company, I would argue that this illustration needs a bit of a tweak. So picture that Venn diagram again and those three circles. But this time the three circles are business, engineering, and operations, and the product manager is the intersection of those three functions. Business, engineering, and operations.
So let’s talk a little bit more about those.
Business – at the end of the day, a product manager role is a business role, period.I have had some debates and spirited conversations about this but at the end of the day, I will always believe that your role is a business role. Even if you’re an engineer or scientist or technologist by training or in past positions, if you’re in a product manager role now, the key objective of the role of Product Manager is to bring business value to the organization. And we do that hopefully through creating products that bring value to the market and to the customer.
While the mechanisms by which we do business may differ, at the core of every single product manager, regardless of industry or product type is to be drivers of business success. We don’t drive business success alone, of course, but if our efforts aren’t having a positive impact on the business, we’re not living up to the potential of the role. We must be good business people with solid business acumen.
The second circle in my Venn diagram is engineering, which, in my opinion, is more applicable than the term “Technology”. While there may be some technology involved, a lot of times in these physical good companies, it’s not a computer scientist, or a software developer, or a software engineer. It’s another type of engineers, such as a mechanical engineer, civil or petroleum or aerospace engineer. Perhaps a biomedical scientist, or a nuclear physicist.
“Engineering” more closely encompasses the function in many companies than “technology”.
From a product manager perspective, we mustn’t be an engineer, but we do require a fundamental level of understanding of the science behind our products. So while we may not be nuclear physicists ourselves, we should understand the basic science of what makes this product and this solution valuable to the customer. So that’s the engineering circle. We don’t have to be engineers ourselves but we do need to understand that function and we are at the intersection of that function within the organization.
And the third part of that Venn diagram is operations. This is that third party and to be quite distinct from software products to non-software products. Operations are part of any business rather you’re a software company or not, but in terms of product management, this is really important when we’re building physical types of products because operations in those types of businesses is often the function responsible for the actual creation of goods and services so that includes supply chain manufacturing, assembly, production planning, facilities management, capacity, and inventory, etc.
Product managers must understand how all of these groups work together. How does the supply chain impact my product success? Well, we get components from all over the world and my supply chain processes and my supply chain group is instrumental in ultimately getting those components to the manufacturing plant to assemble, create, to then pick and ship to customers.
While product managers do not control those processes and activities, we rely on our supply chain experts and that group to run that and to make sure all of that is running effectively, these processes are so interrelated and critical to our product success. And if we’re the owner of the products, we’ve got to really understand how all of that works.
So again picture that Venn diagram and the three circles… Business, Engineering, and Operations. At the intersection of those three is the product manager.
So you’re going to have to have a little more domain expertise or business knowledge than some of your software counterparts. You’re going to have to understand capacity planning and manufacturing and supply chain, whereas that is not a necessary skill set of the knowledge base for software product managers.
So I want to talk a little about how you can become successful, in addition to grasping everything that I just said … understanding those stakeholders, the business side of things, the engineering, and the operations that it requires to be a successful business in your industry.
I also want you to think about how you can become an expert on customer and market knowledge.
Of course, this is important for every product manager, regardless of products that you own. You have to know your customers. It’s the bedrock of being a great product manager. But often in industrial, manufacturing, automotive, consumer goods, etc. type companies, you have what I call a chain of customers so you must be even more diligent in your research and in your understanding.
I am sure you’ve heard the term B2B – business to business, meaning your business sells its products to other businesses and B2C business to consumer, meaning your company sells its products to consumers. Well, in B2B companies and especially B2B companies that create physical products, while your direct customer is a business, you often have what I call a customer chain. So your customer may sell to other businesses which in turn sell to other businesses or perhaps consumers. So your chain may be B2B2B or B2B2C.
There are often layers of customers between you, the product manager, and the end customer or user. So we have to be good at understanding who is within each of those layers, who is within those layers, what are their goals, needs, plans, and we have to have a plan for communicating with gathering feedback from and discerning which of those needs, we need to prioritize.
For example, I have a consumer electronics client that uses a distributor that has relationships with specialty retailers. The distributor is their first line customer, and they care about sales volumes and their profitability, and they care about their customer relationships. Our product has a certain value proposition to that customer. The distributor’s customer is truck stops and convenience stores, and those businesses care about product selection, price, inventory, sell-through, maybe traffic in their stores, etc. And then ultimately, we’ve got the end-consumer, the person purchasing the electronics product and using it in their automobile. They care about things like look and feel, functionality, battery life, power options, etc.
In this example, you have three layers of customers in the chain and they all have different needs and different value propositions from our products. And we have to understand all of them.
We need to be very good at making decisions on prioritizing customer needs. Who are we building the products for? Customer analysis, which sounds simple, and we all do it as product managers can get a little bit more complex and cumbersome in our worlds.
I also want you to remember that as a product manager, you are the expert on the problem not the solution. What I have found in engineering or science-based companies… most of the product managers are former engineers. So, they know the science behind the products. They understand the minute details of how the solution works and why it was built the way it was. This is all wonderful because it adds credibility to the product manager when they’re talking to internal engineering partners and in some cases when they’re talking to clients.
But when you’re in a product manager role, you must be first and foremost the customer advocate. The customer problem expert. What are you trying to solve for the customer? Why? What core needs are not being met? What is that customer’s world like? What are their goals, stressors, obstacles, and so on?
While you may be capable of solving the problem and you may leverage some of your expertise to collaborate with your engineering partners on innovative solutions, don’t wear the engineering hat in lieu of the customer hat. As a product manager, you are the expert on the problem, not necessarily the expert on the solution.
So, to summarize, you sit at the intersection of business, engineering, and operations, you’ve got to learn the interconnectedness of the different activities that have to go on to create and manage physical products, but don’t become too inwardly focused. Keep your finger on the pulse of what’s happening with your customers – all customers throughout the chain and how the market or markets are changing.
Focus on these couple of things to get you started, and you’ll start to feel more confident in your product management role.
If any of you have stories to share or would like to talk about your experiences, find me on linked in or email me at firstname.lastname@example.org. I’d love to hear from you.
Thank you for joining us on Masters of Product Management powered by Sequent Learning Networks. I am JJ Rorie, and I look forward to speaking with you on the next episode