In an organization, where should product management report to? Sales? Marketing? Engineering? CEO? Customer Support? All of this is possible but where can it be the most effective?
Before we answer this question, let us make sure we are aligned on the role of a product manager.
In my opinion, the best spot for product management is to have it report directly to the CEO. Product is one of the most important functions in an organization because getting the right product/market fit is what brings in the revenues. So I would argue that this needs to be have a direct line to the CEO so that it is not only looked upon as a strategic function but also that it is held accountable for the company results.
Is there a second best place for product management? Every successful organization that I have worked for (B2B or B2C) has had product management report to Marketing. Marketing naturally is an external facing function that is responsible for identifying the target market, figuring out the product positioning and figuring out what will make prospects buy. There is a slight danger here of product management becoming “marketing” driven than “market” driven, but I think with the right leadership this can be avoided.
The slides shown below are my opinions on why it should not report into sales or engineering or customer support.
Would love to hear your thoughts on this via comments. Do you agree?
Software Product Manager by Gopal Shenoy 
When I was in business school 20+ years ago, we used the phrase “capital ‘M’ marketing” to mean a definition of marketing that was strategic. Small ‘m’ marketing usually was tactical, focusing on sales and market communication (advertising, trade shows, logos, etc.). But capital “M” marketing defined the essence of the company — who was the customer being served, what customer problems were being solved, how the company relates to competitors. For software companies that have VP Marketing from the capital ‘M’ school, Marketing is a perfect place for Product Management to reside. But, for software companies with “small m” VP Marketing, that would be a terrible place for Product Management, leading to product releases that just chase after feature gaps found in RFPs, guaranteeing that the software company will be a follower. In that situation, I agree that having a VP Product Management reporting the the CEO makes sense. I agree with others who point out that if Product Management reports to Engineering, the product management function ends up focusing on minimizing the development risk for each product release. And, if it reports to Support, it ends up working an enhancement list.
Product Manager should report to the Product Portfolio Manager, who in turn reports to the CEO.
I definately agree with this & this is the way many of the LARGE development companies do it (e.g. Siemens, Honeywell, etc). In this set up, Product Marketing is an ancillary function to the Product Managment vertical and the Product Marketing manager usually reports to the PRoduct Portfolio manager.
Having a Product Manager reporting to Marketing is just asking for short term, disasterous vision.
Maybe the problem in related to internal branding.
it seems that many people are not very clear, even within a company, what a product manager does…
Not sure whose fault this is.
Anna
I think I agree that PM shouldn’t report to engineering, but I don’t think I understand or agree with your reasons. Could you explain the phrases on your picture for that one?
Thanks Gopal for posting insightful and valuable topics.
My few cents:
1) Engineering Heads:
For sure Product Management should NOT report to engineering function. Whatever Gopal mentioned above, I have seen that syndrome. Engineering-Head is more focused on delivering product on time-lines. His entire focus is on time-lines – ready to compromise on QA, ready to scope-out (PM suggested) functionality/feature.
2) Sales Heads:
Again Gopal is right. These people just focus on bids. I was pulled into a situation when sales team were losing a bid to our competitor, and asked me to suggested a workaround in our existing product functionality so that their bid can be successful. Most of these heads don’t go beyond sales deals/bids, what competitor can offer etc.
3) Customer Support:
They can NOT be the ones for sure. Their entire focus is on customer SR resolutions. Somebody is in fire-fighting department, how can they be good in civil architecture and design of buildings?
4) CIO:
Somebody in comments above suggested CIO. CIO role exists only in companies which are implementing IT products or IT solutions. e.g. HSBC’s main function is banking but to support all this they need IT. So IT department is headed by CIO. This function does not exist (to best of my knowledge) in product based companies like SAP, Oracle, Microsoft, Adobe etc. PM function is for Product-based companies. So, this option of CIO is ruled out.
Even Gopal hasn’t considered this in pic at all. He is quite right.
5) CEO:
I am not sure about this role/function. I have little knowledge and lacks experience to comment about it.
I kind of agree to akismet’s comments above that CEO may not have enough time.
6) VP Product Management:
It could be possible but it is too sweeping and broad to make PM a full-fledged function. A VP and full hierarchy for PM? I agree there could be few more arguments both FOR and AGAINST this point but still kind of don’t agree to VP for PM.
To my understanding, PM people are few and thoughtful people. If they are mired into hierarchy, then essence of product management function will be lost.
7) My suggestion: Director Strategy
In many organizations, there is another lineage of hierarchy – Director Strategy.
To my understanding, PM should report to VP/Director of Strategy. I have seen this works well.
QA functions Group Manager/Senior Manager can also report to Director of Strategy.
Director Strategy is also involved in market research, competitor analysis, liaising with (big) customers. He has broader vision for whole organization.
Any other suggestion?
How about the CIO?
I don’t disagree with the theory or research that Product Management should be its own function.
But consider – the exact same discussion and same research is being done in UX communities, and UX researchers and designers have concluded that UX belongs in its own function, with a VP of UX.
There is even movement in the QA community to have QA be its own function. Some organizations have a “Chief of Quality” or “VP Quality”.
No one wants to be subservient to a VP of Marketing or VP of Engineering that doesn’t understand the particularities of their function. Certainly the VP Engineering is often completely clueless about how UX and QA work.
But – doesn’t this get to be overkill? At some point, where do we draw the line? A documentation specialist function with a VP of User Manuals?
At the risk of asking a controversial question, what makes Product Management more special than these other functions? (again, I’m not trying to argue that product management shouldn’t have its own function, but curious to know what people think)
The People, Products and Strategies courseware was designed to assist engineering and business students in visualizing and understanding the fundamental concepts that govern today’s new product development and manufacturing strategies within successful industry companies – new product development, various functional roles of people and the principles, and practice and strategies that drive today’s businesses. The strategies emphasized include the use of crossfunctional teams, concurrent engineering, design for manufacturing and design for environment, DFM, DFA, green design.
Product management can’t report to none of the above options. Each one of them has interests and goals which are not aligned, 100%, with product management. So, product management should get its rightful position as a standalone unit in the organization. Product management should be under VP products or VP product management that reports directly to the CEO.
I think that Marketing or Engineering is definitely not a good function to put product management into. If you consider a start-up environment, the CEO is tied up with fundraising. Additionally, the CEO is pulled in so many directions by sales, customer service, marketing, engineering, VCs, etc – it is almost like the CEO needs to have attention deficit disorder. Product management needs a stronger and consistent presence from an executive who can make decisions.
To me it makes great sense to report to the Chief Strategy Officer.
I really think this would depend on the size of the organization and the stage of the company.
The more ideal place would be to report into a dedicated products organization or perhaps even into a CTO function if there is one.
Sameer