Product Management Belongs in the Marketing Organization
I recently started a new job, so I’m a little late picking up this conversation . It’s such an interesting topic that I just have to chime in.
Saeed from On Product Management asked if Product Managers and Product Marketing Managers in technical companies should be a part of a single “Products Organization.” The overwhelming response from his readers was yes. Saeed has pitched this idea in several previous posts, so he’s had me thinking about it for a while. He’s suggested in the past that engineering should report in to Product Management as part of this “Products Organization.” Saeed’s a smart, experienced guy whom I respect greatly, and the questions he’s asking here are poignant. Many tech companies have severely dysfunctional organizational structures and it damages their ability to compete and stay profitable.
In short, Saeed has suggested that:
1) PMMs and PM should both report in to a singular Products Organization
2) Engineering should report in to Product Management as part of a Products Organization
I’ll address each point separately, then try to wrap-up my thoughts.
Regarding Saeed’s first point, PMMs and PMs should absolutely report into the same organization. And this organization is the Marketing organization, under leadership of the CMO. Why? Because Marketing is about the Four P’s. And no P is more important than Product. I know, I know, this is 40 year-old business school erudition; surely it can’t be relevant in a Web 2.0 world? Despite the greatly exaggerated rumors of their death, the Four P’s are alive and well today in “Big-M” Marketing.
As a refresher, the original Four P’s of Marketing as put forth by Dr. E. Jerome McCarthy, Ph.D. are:
1)Product - the thing that solves the market problem - your company’s offering
2)Pricing - quantifying the value of the offering
3)Placement - how the offering gets to the customer
4)Promotion - marketing communications
Clearly the world has changed since Dr. McCarthy first wrote about these ideas, and the P’s need a little make-over. For instance, placement needs to include positioning in the consumer’s mind as much as on the shelf; promotion needs to include all aspects of Groundswell Marketing and the need to tell a story; but at the end of the day, this is what marketing is about & it’s what successful marketers do (including David Meerman Scott who recently wrote an excellent post on the death of the P’s). Back to the point…. if you are going to create a functional org structure, you’d be well served to place the market-facing members of your product group in marketing.
To address Saeed’s second proposition, that Engineering should report in to Product Management as part of this Products Organization, I say absolutely not. While the market facing members of your product group should be in the marketing organization, the technology facing members of this group should be in an engineering organization. The most important reason for this structure is that the skill sets required to be good at building a product are very different than the skill sets required to be good at Marketing; and nowhere is this more true than in a tech company. Technologists needs to be focused on technology - they must have command of a wide range of tools and they need to keep up with an ever changing technical landscape. Marketers need to be focused on the market and they need to stay abreast of all of the tools of their trade. It’s rare for anyone to have exceptional skills in both engineering and marketing. If you want an exceptional marketing organization and an exceptional engineering organization, you will almost certainly need to have them led by different individuals.
Another reason for this structure is that there should be healthy conflict between marketers and engineers. I’m not convinced that this can happen if both teams are part of the same functional group.
All this said, the Product Management function is critical to the success of a tech company. The org structure should be crafted in a way that allows product managers to run their products like a business within the business. In a large organization it certainly makes sense to have a VP or Director level position running a “products team,” of which Product Management is a part. I don’t think folks that are responsible for MarCom activities should be part of that team though, again because of the vastly different skill sets required. So, while the PM and the PMM should ultimately report into the CMO, as part of the “Big-M” Marketing organization, they should not have the same direct supervisor. The PMMs should be part of the “little-m” marketing/marcom organization.
All of this discussion is around direct reporting structure. While “belonging to” the Marketing organization, Product Managers should lead a cross-functional team as part of a matrix structure. This team should include empowered members from MarCom, Sales, Account Management, Customer Support, Billing, Fulfillment, and Development at a minimum. Depending upon your product and organization, more folks may be needed.
Let me end with a couple of caveats. Caveat 1: I’m talking about larger companies here (200+ people). In business, as in physics, the governing laws of the very small scale and those of the very large scale don’t always agree. Caveat 2: “it depends” was my knee-jerk reaction to Saeed’s questions. Organizational structure is a function of the people in the organization, not the other way around. The org chart should be created to allow the folks that work in the organization to succeed. It should be created with full knowledge of the strengths and weaknesses of your people, as well as an understanding of the intricacies of your finances and operations. So, it’s impossible to provide a stock organizational structure. However, I’m didn’t feel that I was going to further this important discussion with this answer, so I’ve assumed here that your company is not constrained in any way and you’ve decided that the organization will be best served by a traditional functional org structure.
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Comments
Sounds like we are in agreement here Jim. IMO, as long as all the market facing folks (notably PMs & PMMs) are in the same group; and the developers in another group, what they are called is not important.
I’m wary of this. To me, this is not really any different than saying, “product should report to Sales because they are customer facing.”
Marketing is there to support a product - a product that product management is charged with building. CMOs and marketing VPs wouldn’t have a product to market if it wasn’t for product management.
These roles get collided all the time - and it can have disasterous results. Especially if you have a CMO that is charged with running product management, that has zero product management expertise but is a “segmentation expert.”
You run the risk of a product becoming all spin. Just like you run the risk of the product becoming inward-focused if it’s reporting to development.
You need a PM leader (director, VP, SVP, EVP, etc…) reporting to a CEO. Marketing is critical in order to ensure the product is aligned to a value prop and the segmentation strategy both exists and is being adhered to - essentially “speaking” to the market.
A good product leader will understand those core components of a successfull product.
But a PM leader (small company or not) needs to serve as a pivot across the organization - much like the CEO. If that support is not afforded to them, product will, presumably, fail to offer all that it can to the organization.
I agree with Jim - they need to be separate and have solid cross-functional relations. Just like sales, dev, support, etc…
Hi Adam, I think you, like many folks in the software world, are pigeonholing marketing as Marcom and not seeing the big picture. Big-M Marketing starts with the identification of a market need and continues through the entire product development life cycle.
Also, I have to disagree with your statement that product management is charged with building the product. Engineering is charged with building the product. Product Management is charged with making sure they build the right thing.
I think this is simple - the best and simplest form of ‘Marketing’ is the product. Without a good product how far will marketing get you???
For this implicit marriage of marketing and product, both disciplines should have the same strategy regardless where it lives in the classical hierarchy of a company.
Hi,
Good post and thanks referencing my related blog postings.
Just to clarify one thing: WRT Dev reporting into PM….that was a question I had posed, and not a statement I was making.
I’ve seen it work, but it is not a necessity and certainly not the norm in the software industry.
WRT Marketing, I think that the industry has evolved some, and that there should be separate Products and Marketing organizations in companies.
Although Product Management evolved from Marketing, today Marketing in most tech organizations is really focused on awareness, lead generation, events, branding and the like. It’s very heavily skewed towards working with Sales. I call that “Corporate Marketing”.
But for a product centric company, the strategic aspects of Product Management — product strategy, roadmap, business justification etc. along with the cross-functional communication issues of working with Development, Marketing, Support, Sales etc. is big enough and important enough that it needs a Product org that is chartered and staffed for success.
Let’s put titles aside (e.g. titles like Product Manager and Product Marketing Manager) and look at what a good products company needs to be successful. The core teams that drive the business and product strategy from conception to completion and beyond need to be well defined, motivated, measured and rewarded for their roles. This is not effective or even sometimes possible with understaffed teams having to work across organizational boundaries to get the job done.
The old way worked for a long time, but now it’s time to bring in a more efficient model to define, develop and communicate what is needed.
Saeed
After looking over this blog post I took a look around the site. You have done a great job gathering all this information.
As you said;”it’s such an interesting topic that I just have to chime in.” So, I have to as well. The practice, adoption and credibility of product management in most organizations varies by several factors and hence the organizational alignment as well. The influential factors include:
1)What’s the CEO’s background? Has he successfully used product management in the past?
2)What’s the persona of the company ? Is it technology, entrepreneurial, financially or marketing focused? What really drives the company?
3)What’s the focus of the product management team? Are they used for inbound or outbound tasks?
4)What success has product management provided in the past? Does it have credibility? Does the product management team led or follow?
In reviewing all these factors, I’ve have seen a wide variety of successful product management teams that report to different senior leaders. In my past 20 years in product management and product marketing, I have reported to, the SVP of Development, SVP of Product Management, CxO.
My personal preference and most successful experience has been the senior product management leader for product managers, product marketing and marketing. Yes, the entire product team! Talk about synergies, it was great. I agree with you that having development report to the product team, unless the company is small and intimate and warrants the use of a strong impartial leader, is not the best idea.