Friday, March 13, 2009

How should Product Management be Organized?

A common question is how should Product Management be organized?  By technology, product, market, vertical industry, etc?

The answer is easy.  The primary role of Product Management is to deliver the right product to a market.  PM builds a business plan for each market that the organization addresses, derives a vision, and then presents a roadmap of product releases, each with incremental features and capabilities.

So primarily, organize around the market(s) you address.  As an example, if you organization sells products to security and networking buyers, first organize into a security PM team, and a networking PM team.  The heads of each team own the product revenue number, along with their mar
keting counterpart, and of course work very closely with the engineering lead.  By organizing this way you optimize each product for the market it serves - not just features and capabilities, but by pricing and packaging and other GTM (go-to-market) factors, such as route to market, buyer, etc.

Once you have the primary market focus established, next look at large chunks of features/capabilities that may require specialized PM skills, or are common across both business units.  Some examples here would be a common OS PM or hardware appliance PM - or if your OS is broken up into major pieces, then perhaps a PM owns each major piece. 
Importantly, their customers are the primary market focused PMs.

What generally doesn't make sense is to just organize around technology - if each PM just has a piece of the technology, how can they build a business plan, vision and roadmap for the product?Of course if you only serve one market, then the head of PM will own the business plan, but lo
oking closely may uncover sub-markets where PMs can be organized.

The question of organizing around industry segments always comes up - my advice is that if you are selling the same product to multiple verticals, then you have a horizontal product and should be organized by the complete market.  Only organize PM by specific verticals if each vertical is it's own unique market and the product(s) are unique or significantly customized.  The only exception here is where you assemble specific product bundles for unique verticals - then you need a PM to work with the individual product PMs to define what the bundle needs (as the bundle is essentially a unique product).

This discussion is limited solely to product management - often it makes complete sense to have groups within Product Marketing focused on specific verticals - they take a horizontal product that PM delivers, and customize the outbound marketing to appeal to a specific vertical (e.g. healthcare, government, finance), often in conjunction with specialized sales teams.

So remember, the starting point is to organize Product Management around primary markets - it's that simple.

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