In product companies of all types, product management has played a key role in defining product smashes and product failures and everything in between. Product management started in 1931 with a memo written by Neil H. McElroy at Procter & Gamble. McElroy defined product management as being about everything from tracking sales to managing product, advertising, and promotions.
The question for CIOs—as digital transformation fuels demand for digital products—is project management still relevant or do digital products need instead product management. I know CIOs have been thinking about product management for some time. When I was a product management leader at HP Software, I remember Allan Hackney, then CIO of John Hancock, saying to his team that he needed more people wired like me. However, does digital transformation and the emergence of what Forrester is calling micro apps/digital products change the game.
Do digital products necessitate a move from Project Management to Product Management?
CIOs had differing perspectives for this question in our weekly #CIOChat Twitter session. Some suggested that it might not technically require it, but product management is the most strategic way to approach potential projects and priorities in a business and user-centered way. These CIOs, also, said that once digital becomes the focus for the organization you’re no longer talking about projects. Now, you are in the domain of the business. They say it is important that the culture change to adapt to this shift. Here, everything is the domain of the business and, thereby, about delivering business value.
Former CIO, Tim McBreen, said at this point, “other CIOs said have suggested that not everything is a product, and not every piece of work can be done with product management. The simple answer is no, there will be a need for project management and for product management. Tim suggests that digital is the domain of business, but traditional IT is the domain of supporting the business with products or services for each business family domain. From an ITIL perspective, he said organizations should be moving to product/service management for everything that IT does. As part of this change, IT should treat families of digital solutions as product categories and then project management should cover the development and management of each product.
Other CIOs said the move to digital products requires integrations which tend to be projects, so project management should be considered too. For this reason, these CIOs consider project management as a subset of product management. Their argument, however, was challenged by a simple question. Is project management a subset or a different discipline? Those asking this question said each have appropriate times and appropriate purposes. They said that product management and project management are similar but distinct ways of shepherding a thing forward because they have different goals. A product is ongoing and requires series of projects. Like a program, but it’s about a particular digital service and not a business function. For this reason, these CIOs think you need both. Products should live on and maybe be eventually killed off, but you need projects to enhance, update, replace, or otherwise move forward.
What do you perceive as the biggest skill differences between Project and Product Managers?
CIOs say that project managers tend to be focused on the keeping things organized and product managers tend to be focus on customer satisfaction. Both, they say, should meet in the middle regarding business fit and benefit. CIOs believe, as well, that project management tends to deal with internal stakeholders and deliverables while product management tends to deal with external customers and deliverables. This is an accurate distinction for the way that I operated as a product management leader and the way project managers that I worked with conducted themselves.
So here is a summary of the distinctions seen by CIOs.
- The ‘what’
- What are you building?
- What does this solve?
- What is the benefit?
- Customer, delivery, team empowerment
- Business metrics, outcomes, user experience, impact, and value.
- The ‘how’
- What resources do I need?
- Who does what?
- When is it done?
- Scope, schedule, budget, risk and delivery.
- When will that be done?
CIOs felt that the above table gets to the heart of the most significant differentiators. One CIO said here in exasperation, that they believe project managers should be more like product managers, but I hold them to a higher standard of being a business analyst as well as a project manager. They can play a big part in translating with the business the requirements and leading the delivery and managing the results. In general, CIOs believe that there are succinct and clear distinctions between project and product management. Both are important and needed. However, CIOs say that some of the worst project managers have been the ones having a PMI certification. These folks can live and die administrating projects without managing to business goals. So, both are important and yet both may not be needed for every effort or service through their lifecycle. The question are project managers needed for single function Micro Apps?
How should CIOs support product managers in IT
CIOs say that they believe it is critical to have a cohesive IT product strategy and as a part of this, to have product managers highly aligned. This is solved, they say, more by clear communication, than an organizational chart. At the same time, CIOs believe IT product managers can benefit from good project managers, as long as product managers own the product. Teaming together with a dotted line to the line of businesses that they support is one way to accomplish this.
CIOs say, also, that someone needs to own prioritization/portfolio management, so products don’t compete with each other. I personally think project portfolio thinking works for projects, but it is the wrong approach for revenue generating products. CIOs assert that good project managers are worth way more than any of them are paid! But bad ones, said one CIO, are like analog calendar alarms. This CIO had little regard for a PMP certification without a smart PM attached to it.
Product managers need to have their discipline supported by appropriate training, metrics, and customer focused value. Creating this kind of environment is important, in the same way, that PMOs were created in the past. IT needs to support its product managers. Product managers need to be leaders that know how to build great products and understand what IT can provide. This requires a great degree of alignment and communication.
As IT moves to more to a product management run organization, what are the impacts? CIOs say that the addition of product management to the mix has two impacts–increased internal customer delight and increased street cred of the CIO. When IT products are appropriate managed via product management, the impacts for the business should be digital products that are useful, usable, and get used. And CIOs suggest this is the case for both internal and external focused products. Here the business gets better aligned tools from a customer experience/user experience perspective.
From this process, CIOs get to point to distinct products making an impact on the business. This is especially the case for customer-facing products where financial impact drawn from them. This makes IT more than just a cost-center that the CFO can’t understand. From an organizational design perspective, teams should increasingly be based on products, not technical function. As the glue that ties disciplines to product, CIOs see the potential for clarity and transparency coming from product management and a renewed focus on data, analytics, and elevated maturity for CX, business technology, and soft skills.
What is the biggest reason why CIOs should be ushering in PMs into the IT organization?
After last year’s WEF meeting, the editor of Fortune pronounced that every company is a technology company. CIOs agree. Given this CIOs needs to look for value and the opportunities to become the chief product executive. This certainly offers opportunities to expand the CIO’s role while benefiting the organization greatly. For this reason, CIOs believe that adding a product management function will expedite the paradigm shift from being order takers to delivering valued products and services. This, in the end, will boost productivity and morale.
At the same time, this will help organizations retain competitive advantage and thrive in an increasingly digital world. Digital transformation needs to transform the culture of IT from basic technology tool enablement to innovation and empowerment for both employees and customers. Building the right products brings focus, clarity, and alignment. Companies with vanguard CIOs have already taken this step and moved way past the order taker concept to delivering products, solutions, and services that enable the business ‘right to win.’
It seems clear CIOs are not doing away the project management function completely. However, they see product management as a part of driving transformative change throughout the enterprise. This change will lead to less order taking and more business transformation. This is a big deal for organizations attempting to weather the change being marshalled by the edicts of an increasingly digital economy.