Having a good product that addresses true customer needs has always been a foundation for business success. The most competitive enterprises in the world are nowadays offering exceptional products that are appealing to their customers. However, the inception, the development, production, marketing and sales of an excellent product is a very challenging process, which has a unique place in the portfolio of an enterprise’s organizational functions. Specifically, there is a need for structuring and organizing various product lifecycle management activities in a consistent way. This need is addressed by modern practices for product management. Product management is part of strategic management. It comprises a very rich set of activities that cover a product’s entire lifecycle: From inception and feasibility assessment to launch and the development of a proper marketing strategy. Product management is closely associated with product development, as it is primarily about managing the development steps of a product. In recent years, it is also related to innovation management processes, as most successful products are innovative.
The Stages of Product Management
In most cases product management is carried out as a staged process, which allows transitions and feedback loops across the different stages. Some of the prominent stages and activities of the Product Management process are:
- Generation, Management and Screening of Ideas: The development of a new product starts from an idea about a new product. Companies collect and evaluate ideas from different sources. For instance, new ideas can come from internal stakeholders (e.g., directors, C-level executives, board members, internal innovators) or from external actors like customers and third-party investors. Not all of the collected ideas are worth to be pursued and not all very good ideas lead to successful products. Nevertheless, companies cannot afford to ignore good ideas. Therefore, they must manage many different ideas in structured ways. The gist of the idea management process is to distinguish ideas that must be retained from others that are redundant, irrelevant or simply not worth investing on. In this direction, this stage of the product management process must scrutinize selected ideas based on activities like feasibility studies and market analysi
- Product Specifications: Following the initial screening of a product idea, companies must delve into more details about what must be built, how it should be built and based on what ultimate objective. Here is where product specifications come into play. Product specifications define the purpose, scope and target audience of the product, as well as the success indicators and the methodology for measuring the success of the idea in-line with the company’s competitive strategy. Such specification activities are carried out based on the engagement of various business actors, to ensure that all important perspectives are covered. The product specifications output drives many other development activities, including product implementation and estimation of product development costs.
- Creation of Product Roadmap: Following the product specifications, a roadmap for the development of the product is created. It is aimed at providing a high-level plan for the most important development activities, without delving into lower level details of specific features. This high-level approach enables the product development team to focus on strategic goals and KPIs (Key Performance Indicators) rather than debating about details. Likewise, emphasis is given in planning the most important and indispensable activities, while avoiding the scheduling of low-level tasks that are more prone to change or restructuring.
- Product Features Prioritization: With the roadmap at hand, it is time to prioritize the product features that will be implemented. This is the main objective of the prioritization phase. The latter uses scoring formulas to evaluate and rank the different features based on a variety of criteria that gauge the impact of each feature on the vision and KPIs of the product development process. Like in previous stages, the prioritization activities require the engagement of multiple stakeholders and the coverage of various perspectives. The final outcome of the features’ prioritization process is a reasonable compromise that balances the different views, yet it is not always possible to satisfy all stakeholders. In this context, product managers are called to make choices that might please one actor and dissatisfy others.
- Product Delivery and Launch: Leveraging the roadmap and the features prioritization, the product development team can start building the product. New product development processes are usually led by engineers and other technical people, with product managers in a supervisory role. The overall delivery process varies from organization to organization. For instance, in the case of software products, some organizations employ traditional waterfall models, while more agile enterprises leverage iterative and flexible approaches inspired by the notorious “Lean Startup” methodology.
- Product Analytics: Once the product is built and released, product managers employ product analytics to gain practical insights on the quality of the product and the level of its alignment to strategic goals and KPIs. In principle, product analytics is about exploring how customers engage with the product. The emphasis is put on analyzing customer behavioral data to identify potential opportunities for providing value to the customers and satisfying their needs. The analysis considers aspects such as what loyal customers do, what drives conversion and adoption, as well as what common traits the most profitable customers have. Furthermore, product analytics provide an experimentation playground that enables product managers to simulate different scenarios and run relevant what-if analysis in order to identify conditions that could improve the product and its profitability.
- Customer feedback: It is always important to listen to the voice of the customer. This is a difficult process due to the diversity of the comments, which range from compliments to serious complaints and evidence that the product does not meet customer expectation. The customer feedback phase enables product managers to integrate improvement and fine-tuning processes in their overall product development strategy. Feedback is solicited based on different modalities, including structured questionnaires, surveys, focus groups, as well as usability testing like A/B testing. In recent years, social media platforms provide plenty of opportunities for soliciting customer feedback. Hence, they are increasingly used by product managers.
The above listed activities are not exhaustive. However, they are indicative of the product management process and the duties of the product management team.
Best Practices for Success
Product management activities are quite standard and well-illustrated in product management handbooks. Nevertheless, it is the quality of the execution of these activities that leads to success. To this end, the following best practices must be considered:
- Strategic Alignment: Any product management decisions must be aligned to the overall business strategy. New products should not only strive to implement a market penetration strategy that considers market segmentation and increases profitability. Rather, the product strategy must reinforce the business strategy as well.
- Specify Product Directions and Goals: Prior to looking at more tactical activities, you need to understand the high-level directions and goals of your product development. There is no point at looking to the details of something that is bound to fail due to lack of proper direction.
- Listen to the Voice of the Customer: It sounds like a cliché, but it is really important that new products are driven by customer needs. Products must solve customer problems, which is the reason why you must understand the customer pains first. Nevertheless, you should also set boundaries in the reception and processing of customer feedback: Customers know their problems, yet they do not always know what the best solutions to these problems might be.
- Place emphasis on Team Work: Product managers coordinate the product development However, the latter activities entail multiple stakeholders and teams inside an organization. Successful product management is all about close and effective collaboration between cross-functional teams, including designers, developers, marketeers, sales people, support staff and more. Likewise, the active engagement of executives, board members and investors in the product positioning process is a key to success.
Product management activities are without doubt a vehicle for improving business results. They success depends on the right people, the right environment and the interdisciplinary processes including design thinking, agile product development processes, product analytics and more. Enterprises must therefore invest on creating a modern agile product management environment, which will enable them to turn their product strategies to a long-term growth strategy.
