Five years ago, when we published the first episode of This is Product Management, a podcast where I’ve since interviewed over 230 product leaders, the world of product management was very different than it is today.
People didn’t know what product management was, let alone how to do it effectively. There were no formal educational paths or training programs for the role. Many people were performing product management tasks, but didn’t actually have the word product in their job title.
A lot has changed since then.
We recently surveyed more than 550 product people for our 2020 Product Management Insights Report and found a profound evolution in the role. Strategies that used to give product teams a competitive advantage, such as user research and experimentation, are now widely adopted. In fact, through past surveys and in my conversations with the podcast listener base of over 15,000 people, I’ve noticed that questions have shifted. I used to hear “how can we make better product decisions?” often, followed closely by “why should we use research and experimentation to make decisions?” More recently, I hear this question a lot: “how do we become excellent at research and experimentation?”
Simply talking to customers is no longer a competitive advantage.
1. Product management drives digital transformation
By now, you’re surely aware of large organizations that have failed to adapt to changing customer expectations and trends in technology. Many of the largest companies in the world, such as General Electric, Citi, and Northwestern Mutual, have changed their strategies and allocated considerable budgets towards innovation and digital transformation initiatives with the goal of reinventing their product lines and culture to meet modern customer needs.
Product management’s influence on these initiatives has grown steadily. Nearly 60% of our survey respondents say incubating a new product or business line was high on their list of business objectives. In terms of product specific objectives, 50% say that reaching a new market or customer persona was a top priority, and 37% are working to add a digital product to a physical product or service business.
Digital transformation initiatives have clearly impacted the product management discipline in the last year. 76% of respondents said their role has either been moderately or significantly impacted. When we filter out respondents who work at startups, the impact is even more significant.
In 2020 and beyond, I expect we’ll see product teams emerge as leaders of digital transformation success. They'll develop the strategy and shepherd the execution using the best practices that they’ve discovered over the past five years.
2. Product management and insights teams combine forces to democratize research
Within the past few years, product teams have increasingly incorporated user research into their workflow to make better decisions. However, this speedy approach is very different than how market research teams at large organizations have historically conducted research. Our survey found there’s a disconnect between the two teams.
51% of respondents say they collaborate with market research teams or vendors on less than half of their product development projects, while a much smaller percentage – 10% – say they collaborate with research teams on almost every project.
About 31% of product teams that collaborate with the research functions at their organizations find market research teams or vendors to be moderately valuable and nearly 50% find them to be valuable or extremely valuable. These numbers are far lower than they could and should be.
Only 2% of the product people we surveyed plan to prioritize collaboration with market research teams. Given that approaches to data collection are evolving quickly alongside the increased pace of decision making within businesses, a lack of focus on collaboration may hold product teams back if they don’t get ahead of it.
I expect that product teams will find ways to incorporate traditional market research insights into their strategy and product decision making. Meanwhile, the field of market research will evolve to be more agile, meeting the needs of product teams who increasingly need to make more important decisions and do so faster than ever before.
3. Giving product a seat at the table is the next competitive advantage
As product management continues to influence high-level business objectives such as digital transformation and profitability, high demands have been placed on their time and resources. Our respondents say that internal politics and lack of resources are their most significant challenges.
The product management discipline is constantly evolving. It requires many skill sets, so it’s not surprising to see that teams struggle to keep up with best practices. 61% of respondents say they want to spend more time attending training and learning new skills. A growing number – 11% – say they spend exactly no time on professional development. Given an extra $250,000 for their product budgets this year, half of respondents would spend it on user research or experimentation, 21% would invest in training their teams.
To be successful in 2020 and beyond and achieve the mission critical goals they need to achieve, organizations need to give product leaders a seat at the executive table to inform strategy, as well as the tool and training resources they need to execute the most effective strategies.