Tag Archives: Greg Sabatino

Placing Value at the Center of Product Management

Subtitled: What is product management? (part two)

Perhaps a better way to think about product management and its critical role in
ensuring organizational success is to envision three pillars. These three pillars
make up the entirety of the organization. The first pillar is Operations. The
operational pillar encompasses the executive leadership team, shared services
such as finance and human resources, and the remaining staff who spend most
their time ensuring that the organization runs smoothly. This operational group
generally makes up the smallest percentage of the organization’s total head
count.

The second pillar is the Value Creation Team. This pillar includes all the individuals in the organization who contribute to creating and sustaining value. This is achieved by producing new products, enhancing existing ones, or simply supporting the value that has already been created.

Depending on the size of the organization, a value creation team will be led by one or more product managers that are held accountable for achieving the company’s product objectives. Although product managers are responsible for achieving results, no product manager can do it alone. Effective product managers work closely with cross-functional product team members from across the organization. These include project managers, business analysts, engineers, quality assurance staff, research and development personnel, and customer support. The Value Creation Team pillar usually makes up the largest percentage of employees on a head-count basis.

The third pillar is the Revenue Capture Team. This team includes most of the marketing organization that supports the activities of the sales organization. These activities include lead generation, collateral development, and outbound marketing programs. The Revenue Capture Team also includes the entire the sales organization, whose mission is to contractually capture the revenue that results from the value of the products.

When viewed from the perspective of the three pillars, product management’s value becomes clear. The product management organization acts as the focal point for value creating and sustaining activities.

Communication and alignment are important to product management’s success, but they’re secondary to product management’s real mission — creating and sustaining value throughout the entire product life cycle. This role fully differentiates product management from all the other business functions and demonstrates why product management is so critical to company success.