“We’re hoping you can settle this debate for us. Where should product management sit on the org chart? Who should it report to?”
Aah, the old org structure question. This is an easy one to answer: Product management should report to a product management executive.
Sure, it’s a flippant answer, but it makes an important point.
Would you have salespeople report to your CTO? Would you have developers report to your CSO? Would you have accountants report to your VP of human resources? No. Then why would you have a product manager report to anyone but a product management executive?
Companies thrive or fail based on product performance, and products are the lifeblood of an organization. No matter how good your marketing, sales, channel or brand, if you don’t have good products, you’re sunk. (As David Oglivy said, “Great marketing only makes a bad product fail faster.”) Product strategy and execution is too crucial to company success and growth to be subsumed under another function.
Most companies have a marketing executive and a technology executive, and there are executives in sales, operations, legal and human resources — so why not a product executive? Appointing a product management executive sends a signal to the organization that product is just as important as the other functions. Will this automatically make your products great? Of course not. But when product management reports to another group (e.g. marketing, technology), it may be more difficult to produce good products.
Placing product management under the technology or engineering function often transforms the role into that of a feature order taker vs. a strategic business leader. One of two things often happens to strong, business-focused product managers working inside the technology organization.
- They are slowly transformed into technical product managers (due to the strong technology orientation that comes from that group) instead of what the business really needs – someone to take responsibility for the commercial success of the product.
- They get frustrated by the focus on technology over business and market and end up leaving for greener pastures where they can practice “true” product management and where their full range of skills are more appreciated.
Placing product management under marketing can hinder the working relationship between product management and the technology or engineering function, due to engineering’s perceptions (accurate or not) of marketing. Plus, the marketing organization has so many other responsibilities – demand generation, sales enablement, product marketing, field marketing, brand, PR, analyst relations – that product management can get lost in the shuffle.
In a large percentage of leading organizations, we see the product management executive as a peer to the CMO and technology leader (usually a CIO, CTO or VP of engineering), as well as other functions like sales and finance. The title of chief product officer, while still rare, is becoming more common. Leading product organizations include not only the product management function, but also related functions like pricing, user experience and product operations. These shifts represent an acknowledgement of product management as a strategic driver for the company’s growth.