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How to Establish Your Organization’s Product Management Model

Organizational strategy isn’t always clear, especially regarding product management. Many employees contribute to the final development and sale of a company’s product, including engineering, technology, and marketing teams.

Organizations can define their product management structure, allowing teams to focus on specific aspects of product development. A simplified management structure encourages teams to work together without losing sight of their overall objectives.

There are three basic models for product management:

The functional model
The general manager model
The platform model

Each has its attributes, advantages, and disadvantages. This article will discuss how each model works and how to incorporate them into your business.

The Functional Model

A functional model includes a chief product officer (CPO) and a chief technology officer (CTO). Both are colleagues who report directly to the CEO. The CPO oversees the strategy and vision for the product, while the CTO ensures the engineering team collaborates to develop a working product in line with the company’s objectives.

Organizations with established products seeking to scale for growth are best suited for the functional model. The company already has a viable product. Engineering teams become experts in its development and continually refine it to meet expectations.

At the same time, the product team:

Develops a strategy for growing market share and improving the customer experience
Handles pricing, marketing, and client interactions
Seeks to ensure that customers are happy with the product

If the product team learns of issues with the product from their clients, they’ll voice the issues to the engineering division. Both teams will collaborate to improve the product based on customer suggestions and complaints.

A functional model generally has more engineering team members than product employees. However, the product team is heavily responsible for customer satisfaction and sales analysis — critical metrics of the product’s success. In turn, the engineering team handles quality control and streamlining of product functions.

Organizations that choose a functional model for product development must ensure the product and technology teams work together and not on their own. Lack of collaboration can lead to mistakes and missed opportunities to scale the product for future growth.

The General Manager Model

Businesses that are at the beginning of the product development process or that have not yet attracted a significant market share for their product are best suited for the general manager model. Under this model, a single person is responsible for the product and engineering teams.

For the general manager model to worK:

The individual in charge must clearly understand product and engineering functions.
The general manager should know the steps involved in creating and marketing the product to consumers.

Frequently, the general manager will act almost as a mini-CEO. They’ll have responsibility for ensuring that the cost of the product aligns with budget expectations. If expenses exceed the budget, they’ll need to reform processes to meet the organization’s requirements.

It’s essential for engineering teams following the general manager model to have clear-cut responsibilities. If there is duplication of efforts amongst groups, there is a risk that employees will make mistakes or waste time. Both product and engineering teams must work hand-in-hand to ensure the appropriate amount of collaboration.

General managers can promote the product’s success by holding regular meetings with key stakeholders of the teams. Meetings assist with monitoring progress, ensuring all groups are on the same page, avoiding duplication of efforts, and encouraging synergy between divisions.

The Platform Model

The platform model is a hybrid between the functional and general manager models. Companies seeking to leverage the cloud for their technology products often choose the platform model.

A platform model begins with developing a primary platform that engineering teams use as a base for their products. The company may sometimes have several platforms designed for different customer needs.

Each engineering team retains responsibility for a platform and enhances it with APIs to provide a fully-functioning product for individual clients. A product team is available for each platform and partners directly with them for customer-facing matters.

The purpose of the platform model is to provide better agility in the development and sales process. The product team collaborates directly with the engineers and develops a complete comprehension of what the product can do.

When the company delivers the product to its customers, the product team ensures that customers understand its functionality. If problems arise, employees within the product team collaborate directly with the engineers to address them.

The leader of the platform model is either the head of platforms or the CTO. As with the general manager model, the director must understand the engineering and product processes.

Many organizations that use the platform model offer products that their customers can customize using their engineering team. If this is the case for your company, you’ll want to have product team members who can communicate the functionality of the platform and address questions as they arise.

Determining When to Change Your Product Management Structure

Usually, organizations change their product management model when they change their business model or when the market demands it. Some companies are in their early stages and simply need to set up their management structure.

You’ll recognize that changes are necessary to your product management structure when the following issues arise:

It takes too long for your team to deploy products to customers
There is duplication of efforts across teams
You need greater coordination between products and engineering
Customers are complaining about product features and efficiency
You are introducing new products or services

If you notice problems preventing your organization’s product from succeeding in the market as it should, it’s time to turn your attention to your product management structure.

Clarify Your Product Management Model for Future Success

It’s not always easy to figure out when you need to make changes to your product management model. Often, executives get caught up in their regular activities and fail to note when issues arise.

Senior leadership must pay close attention to changes in sales and customer satisfaction. If they note that clients aren’t happy or that revenue is declining, a shift in product management may be necessary.

It’s also crucial to set up a clear structure for product management when developing a new product or service. A straightforward management structure can reduce any hiccups in the development process and enhance collaboration among teams.

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