Only three things happen naturally in organizations: friction, confusion, and underperformance. Everything else requires leadership. — Peter F. Drucker, American management consultant
In my first job in product management, I was based in DC and my developers were based in California. We were early adopters of agile methods but I certainly couldn’t attend daily standups; I wasn’t co-located so I couldn’t do some of the daily interactions that seem to be required today.
Instead, I flew to LA once a month and stayed for a week of development team meetings. I showed them what I’d been working on and they showed me new product features that were waiting for my approval. It seemed to work pretty well—the key was I tried to share the business and market conditions I was encountering. I gave them insight by sharing the product vision, personas, and market stories. They were free to use their judgment and I was confident they were putting the personas at the forefront of their thinking.
The thing was, I wasn’t telling them what feature to build; I was telling them what problem to solve. Even though I was in the marketing department, the product team and I were in sync; we shared a common set of goals and a shared understanding of our roles.
I’m often asked where product management should sit in the organization. Some companies put product managers in development; others in marketing. What are the merits of each?
Product management in Marketing
For some companies, marketing is a horizontal department, focused on strategy across all products and all markets. When marketing is a strategic department, product management can work nicely with sales, support, development, and other groups—our goals are centered around shared product success factors.
In other organizations, the marketing department’s focus is promotion, branding, and lead generation. In this scenario, product management tends to get pulled into a technical support role for the marketing and sales teams, providing content for demos, presentations, ebooks, and sales enablement. For this type of organization, I recommend these departments hire product marketing managers who have both product expertise and go-to-market skills.
Product management in Development
For some organizations, the product managers are primarily concerned with the product and its technology, so making product management part of development makes sense, at least initially. As a technical role, the product managers participate in daily stand-ups, acceptance testing, and development briefings on the state of the product.
Having the product manager or product owner close to development ensures that the team is always focused on the right priorities and provides instant access to market insights. The product manager can explain the client’s workflow or skill set to help the team decide which of two options is best the target persona.
In these organizations, there’s a danger of product managers being so involved with daily operational issues that they are unable to spend time with customers and must rely on sales people for market insights. But there’s nothing like personal experience in the market to build credibility with the development team. Without it, the product manager role becomes more secretarial than strategic. Product managers get pulled into grooming a backlog using limited market knowledge and tend to take a more development-oriented view of the roadmap and backlog.
For this scenario, you’ll need a strong strategic product manager in the marketing department to drive the tactical decisions made by product managers or product owners in development.
Product management in Product
Nowadays I’m seeing more teams centered in their own department under the VP of Product, sometimes called the VP of Product Strategy. This scenario ensures that the business, technical, and marketing aspects of the product are in sync. Since they all report to the same person, they will naturally have shared goals and clear responsibility.
(See also What is (and isn't) Product Management?)
For this team, you typically need one person for overall product line strategy, one for each active product, and one person dedicated to each target market. Ideally you want to create a cohesive team of strategist (business expertise), technical (product expertise), and go-to-market (market expertise) for each product or product line. The titles are less important than the shared goals and clear definition of roles and responsibility.
As for physical location, co-location is less important for these three roles; instead put them near their primary interfaces. I like to see the strategist close to the executives, the technical role near the developers, and the go-to-market expert near the market of target customers.
Here’s the thing: there’s no “best practices” organization chart. Your company is unique. What works for others may not work for you. All we can do is ensure that each team has the skills they need and close interfaces with their counterparts in other organizations.