A Small Business Guide to Smart Product Management

a person with collar shirt: Product manager showing virtually connected sprockets, ideas and changing technologies

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Product manager showing virtually connected sprockets, ideas and changing technologies

Few things are more exciting than the launch of a new product — or more terrifying if you’re a product manager.

You and your team have worked hard for months to perfect the product, and now it’s the moment of truth. Will it be a hit, or have you spent the past few months on a flop, killing your professional reputation in the process?

No one knows exactly why some products succeed or fail, but we’ve developed a pretty good idea over the years of the ingredients for a successful product development process. So, if you’re in this business, it’s vital that you know and exhibit these qualities.

Good product development management often is the difference between growing as a company and getting crushed by competitors. In order to be an effective, agile product development manager, you must possess a few key characteristics. But first, it helps to identify exactly what product management entails.

Overview: What is product management?

Product management refers to the process of researching, identifying, and developing new products based on customer needs so your company can produce and sell these products.

Effective product management will help a business correctly determine what customers are looking for and then develop a product with specifications matching those needs.

A lot of work goes into product management beyond the actual product development process.

Product managers must conduct extensive research into the customer base and its needs, identify key specifications, discuss with the development team what’s possible, and devise a roadmap for product development for the project manager.

Basically, you must handle all aspects of the product life cycle from start to finish.

Product management vs. project management: What’s the difference?

The difference between a product manager and a project manager is a matter of scope and overall responsibility.

While a product manager is narrowly focused on developing a product roadmap, the project manager takes that roadmap and breaks it down into individual tasks, creates a project schedule, allocates resources for the project, monitors its progress, assigns roles and responsibilities for the team, coordinates the product launch, and communicates with stakeholders.

7 characteristics of effective product management

Being a good product manager requires a lot more than understanding how to put a product together. These seven characteristics are a must for anyone hoping to excel in this career field.

1. Leadership

Like any manager, a product manager must have good leadership qualities. That means the product manager must be willing to listen to the team, lead by example, show empathy to others, have a detailed understanding of what needs to be accomplished, and be able to motivate the team to accomplish the desired results.

Leaders must also show that they can push their team to execute the project and accomplish the steps laid out in the plan on time and on budget.

Example: Sarah, a product manager for a bottling company, noticed that the team has recently been late filling orders. She calls the team together and, rather than demanding employees work harder to get products out the door faster, asks for feedback to determine why they have had difficulty getting orders out the door on time. She finds that workers have been dealing with outdated machines that frequently break down, prompting her to submit a proposal to the company to replace the machines with newer models that will not break down as often and will operate more efficiently than the old models.

2. Understanding the customer

Demonstrating a thorough understanding of who your customer is, what they want, and what kind of product will meet their needs is perhaps the most essential part of being an effective product manager.

That goes beyond merely gathering statistics on customer trends or poring over surveys — you must have a general sense of what your customer desires based on your intuition developed over years of interactions with the customer base.

Example: John, a product manager at an accounting software company, wants to better clarify who the customers are and what they want. He instructs his team to generate three customer profiles: one for the mid-sized business manager who wants to streamline the company budget, one for the small business owner trying to find their first budgeting software solution, and one for the head of household who wants to understand personal finances.

3. Knowledge of current and past products

It’s hard to develop a strong product future if you don’t know your past. By understanding past company products — what worked, what didn’t, and what was an absolute disaster — you’ll learn from previous mistakes and identify what characteristics about a product tend to make it successful.

While experimentation is important — see characteristic No. 7 below — it’s wise to avoid reinventing the wheel whenever you can.

Example: Caryn, the product manager for a consumer drone manufacturer, has received feedback from a customer survey indicating that there’s interest in a drone that can fly at much higher altitudes than the current product. However, she knows that a past effort to produce such a product ran afoul of Federal Aviation Administration (FAA) regulations, and she communicates this concern to the company owner. They decide to launch a study to better refine requirements for the future product to meet FAA regulations while satisfying customer needs.

4. Effective communication

All managers must be excellent communicators, and product managers are no exception. You must understand how to communicate with a diverse group of employees and get them all on the same page and collaborating together.

This prevents duplication of effort and makes sure your team is working with maximum efficiency. You also must clearly communicate the product strategy with an effectively communicated road map that clearly defines things like the product’s attributes and who is responsible for what.

Finally, you must take responsibility if anything goes wrong. As the manager, you’re the product owner and must act as such.

Example: Steve, a product manager for a scientific instruments manufacturer, is in the midst of guiding the development of a new calculator. To make sure everyone on his team is on the same page, he creates a detailed product strategy that discusses what components are to be developed and when, who will be responsible for each stage of the development, and stipulates daily updates so he can monitor the progress and communicate any changes.

5. Prioritization skills

In a business, resources are always limited. Sometimes you can’t get everything you want in a product, so you must prioritize features and capabilities that are of the most importance to the customer.

A product manager must do this not just because a product may leave out the more important features in favor of those that aren’t as essential, but also because a lack of prioritization may cause a product manager to try to get all the features done anyway and end up with an inferior overall product.

Example: Tina, a product manager at a video game company, learns about halfway through the development of a new role-playing game that they don’t have the funds to build out all aspects of the game. Instead, the company focuses on aspects of previous games that customers most enjoyed and decide to devote their resources to similar gameplay elements, thereby scrapping extras that they hoped would add value to the game but weren’t essential.

6. Ability to think strategically

Product managers must look at the picture and think strategically.

They must ask themselves, “Am I pushing out a temporary product just to satisfy customer demands for a few months that will get tossed aside two or three years from now, forcing us to start again from scratch, or am I developing a solution that can grow with our customers?”

Your products are your company’s life blood, so you must develop a concept map for products that incorporate a long-term focus.

Example: Tom, a product manager at an exercise equipment company, notices that customers show a strong preference for expensive, features-laden exercise bikes. However, the product doesn’t fit in with his company’s overall strategy of producing affordable exercise equipment for budget-conscious individuals, so he resists the urge to undergo an expensive product development process to meet what he believes to be a temporary demand.

7. Willingness to experiment

Developing new products requires an adventurous spirit. You must be willing to take calculated risks and experiment with new things that may fail.

By having a backup plan and a main product line that supports the business, you can branch out and try new things with your product team. This allows you to identify new opportunities for your business to expand beyond where your company is currently focused.

Example: Mary, a product manager at a cyber security firm, continues to provide support for the company’s main cyber security product line, but she wants to experiment with a pilot program for some new technology that will introduce security measures for clients who want as many layers of protection as possible. She sets aside a small amount of time and resources each week to devote to this pilot program to see if it will work and keeps the business owner informed of her progress.

Become more effective with software

While product life cycle management doesn’t involve all of the tasks of project management, you will still benefit from project management software.

This software can help you gather detailed analytics on customers, set up a project timeline, and draw up a strategic product development plan that fits in with your company’s vision.

Some software options go beyond product development and assist with product marketing and sales, in case you’re in a small business and wear multiple hats.

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