I think it’s surprising, given how critically important product management is to most tech companies, how few people really know anything about it. A lot of companies (including tech companies) either don’t have a Product Management person or the Product Management function doesn’t exist at all.
So where should the Product Management function live on the org chart? Obviously, there’s no one-size-fits-all answer. The answer depends on:
If you’re running a product-based technology company, the Product Management function needs to be owned by someone in the core inner circle of the business, such as a C-level officer. If your business is product based, it’s critical that your Product Manager have a seat at the executive table. You shouldn’t have products reporting into someone who reports to the CEO.
In a startup that’s especially true. In a lot of early-phase tech startups, the Product Management function is actually run by the CEO or founder himself/herself – the person who incepted the idea for the business. There are a lot of B2B startups where the CEO only focuses on products because he or she had the idea in the first place.
But the CEO shouldn’t be completely enveloped in products alone. The CEO needs to be thinking about all the moving parts of the business and not just products. In some cases, you’re better off bringing in an outside CEO because if your CEO is focused solely on the product itself, who’s going to focus on getting it sold?
For companies where technology and products are not the core of the business, product management doesn’t need to report to the CEO. One approach might be to have product management report to a C-level officer, such as a CTO or CIO who reports to the CEO. If yours is not a technology business, but technology is an enabler (such as Ford or DelMonte, e.g.), product management doesn’t really need to have a seat at the executive table. Instead, it can proxy through someone who does have a seat. However, it’s still important that the Product Management function exists and gets proper attention even if technology is not core to your business.
The question of scale, or where you are in your business growth trajectory is also important when it comes to product management. For example, eBay is a business where the whole business is the marketplace. They don’t stock merchandise or make their own products. All they do is connect buyers with sellers.
eBay’s ‘product’ vision for the marketplace is core to the business, but in this case it may not make sense for product management to report to the CEO because the company is highly decentralized. Each part of the business has its own General Manager or Vice President. Groups are broken into subgroups and each sphere has its own product person.
At eBay’s scale, decentralizing product management makes perfect sense. In smaller businesses, decentralizing product management is generally neither necessary or wise.
The most important thing is that product management needs to be recognized as a function. Someone owns it and has the necessary autonomy to make important product decisions. However, your CEO should not also be your VP of Products unless the rest of the executive team is strong enough to make sure other aspects of the business are getting the necessary attention.
What you don’t want to do is tell someone they’re responsible for product management, dictate to them what has to be included in the product and then make them responsible for product metrics, too. A true Product Manager cannot be accountable for any metrics if you’re telling him or her what features to include in what order. They have to truly own the Product Management function.
If a Product Manager is not empowered to really do the job, that’s okay but don’t give them a title such as VP of Products. Give them a more appropriate title and say they’re a Program Manager or something. Don’t mislead them or anyone else by calling them a Product Manager when they’re not.