Thinking business – Why it is difficult for product managers

Editor’s note: This is a refresh of an older post from 2013.

Thinking business is a challenge for product leaders. The illustration below shows us why.

Translation from business to product - graphic

Why do founder CEOs with strong product management skills have difficulties when their companies need to scale? Why are product leaders often perceived as the guys who don’t understand “business”? Why is it often so frustrating to manage stakeholders if you are a product manager?

I have asked myself this type of questions pretty often. Actually, at times I felt so far away from business that I was proud of being an idealistic advocate of our users. I found excitement in challenging the business colleagues by presuming I had the better (because of my arguments being user focused) arguments in discussions. And yes, it is true that there are many articles about this topic. One of my employees pretty often asked me to be less “ideologic.” My strategy papers etc. were often perceived as a kind of “bible”. Personally, I believe this has been and still is a defensive move of the function product.

Let´s try to understand the different historical phases of product management better.

TACTICAL MARKETING – Phase I

“Product” used to simply be one of the four P’s in the marketing mix. Product managers got a list of features they had to build and to release. That was all. Nowadays, the solutions have become more complex than ever. Not only technically. Also, customers are expecting solutions tailored to their needs. 

STRATEGIC MARKETING – Phase II

Marketing became more and more philosophy for companies to be truly consumer-centric. It is the moment where marketing started to ask for seats at the executive table.

R&D COMPLEXITY – Phase III

Latest with the arrival of digital, products became too complex to be built based on a top-down specification. The introduction of agile methodologies changed the way R&D needed to be led.

STRATEGIC PRODUCT MANAGEMENT – Phase IV

With all the agile teams led by product managers, a new level of organizational challenge arrived: How to make sure all teams are working towards the same goal? Thinking business became increasingly important.

Traditional general managers often fail to manage R&D because they are not seasoned product leaders. They need “help” in steering those teams. Please also see the following page if you want to read more: Leading product companies without product background. The only way to inspire those teams is to have a clear product vision instead of asking for simple features to be built. There is a translation needed. Otherwise, there will be no real link between general management and R&D and the company will not be successful.

So, if you experience product leaders who are not embracing your corporate strategy, this might be due to the fact that she/he is not willing and/or able to challenge it. However, it might be a comfort zone related issue as well. On the other side, it is always hard to leave the area of your own functional expertise and to broaden your view. 

A big question remains open: How to broaden your view as a product leader? Personally, I have chosen to do an MBA for this. But if you have colleagues with a solid consulting background and openness towards design thinking this might also be very valuable.

Thinking business – let’s discuss together what might be the best way to achieve better translation in your organization! I am looking forward to your thoughts.