“The Customer-First Organization”: The Rise of the Chief Product Officer
Technology and InnovationCustomer Focused GrowthTechnologyTechnology, Data, and Digital
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Sean Roberts
May 08, 2020
5 min read
Technology and InnovationCustomer Focused GrowthTechnologyTechnology, Data, and Digital
Technology has become central to remaining competitive, both to enable the iterative cycles required to constantly optimize products, and as a stimulus for demand.
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Adapting to constant innovation and transformation has become the only way to compete in rapidly disrupting markets

Every company must think and act like a technology company to remain relevant in the current competitive landscape.

We are in the age of the empowered customer. In both B2C and B2B alike, the customer is more empowered than ever before, with more data (both performance and social) to support their decision making, and lower barriers to switching loyalties. For leaders, this has created an imperative to structure and build organizations which can listen to customers and respond at speed. The cost of inaction is irrelevance.

Technology has become central to remaining competitive, both to enable the iterative cycles required to constantly optimize products, and as a stimulus for demand. In both our client interactions and in conversations with top product leaders, we’ve seen a rising need for chief product officers (CPOs) who are tech savvy, commercial and customer-focused.

The most advanced companies are developing platform offerings, becoming convenors of eco-systems and gaining invaluable insights in doing so. The product function has been at the eye of this storm, accelerating new approaches to the market and lubricating customer-focused conversations across diverse functions, from marketing and technology to the lines of business. As a result, product has been given an increasingly loud voice with a seat at the top table, and the remit to actively drive change and revenue growth. In building product functions, companies are creating a stabilising connective tissue between technology and the customer, allowing them to create new digital propositions, ways of working and to develop partnerships with technology organizations to broaden their reach.

The ideal product leader needs a broad skill set -- but be prepared to make some trade-offs

Today’s product leaders span a wider variety of competencies than their historical counterparts

For product leaders, previous titles or functions are less important than their ability to span the breadth of experience necessary for success. Expansive-thinking product leaders come from a range of backgrounds including technology, business and marketing, to mention a few. While many senior technologists have been too far removed from the customer, and chief marketers may lack the technology depth and skills required, the ideal product officer spans enough of these areas to draw the functions together cohesively.

Whether transforming legacy organizations or scaling digital natives, the best product leaders look the same. First, being the advocate for the customer is at the core of their remit, so direct customer experience and commercial acumen are must-haves. Secondly, technology understanding; although the levels may vary according to the type of product leader required, technology expertise is needed to command the respect of the technology function and build a successful partnership. Thirdly, defining a well-considered roadmap requires exceptional stakeholder management skills and a strategic mindset, along with the ability to balance a multitude of requests against the related trade-offs.

These requirements hold true across both B2C and B2B product functions. They may be more clear-cut in the B2C environment, where products tend to get updated more regularly and across a wide range of channels, and historically have had more of an aesthetic focus than B2B counterparts. Increasingly, however, B2B organizations are incorporating a B2C mentality, with the understanding that customers appreciate intelligent interactions with products at work as much as they do at home. Strong design approaches, a push for good user experience, and ultimately a desire to automate low-value tasks are driving B2B companies such as Slack, SAP, Salesforce and Microsoft. Both B2C and B2B share the goal of allowing their customers more time for productive interaction, rather than repetitive tasks.

CUSTOMER-CENTRIC
  • Customer obsessive
  • Building a USP/differentiator
  • Data-driven
  • Service delivery
STRATEGIC
  • Connectivity between functions
  • M&A and Parterships
  • Product strategy and management
  • Prioritization
TECHNICAL LITERACY
  • Complex environments
  • Agile/dev-ops experience
  • Innovation
  • Engineering capability
COMMERCIAL ACUMEN
  • Alignment to stakeholders
  • Pricing and investment
  • Relationships
  • Translating technology

Great span across all of these elements is rare, and trade-offs will have to be made

In reality, it is extremely rare to find executives who are strong in each quadrant. Short of a product leader who has a computer science degree, studied design, earned a Harvard MBA, has worked both in start-ups and mature companies, is commercially-oriented, and has a very high EQ, trade-offs will be necessary.

The most common trade-off scenarios that we encounter are:

  • Experience scaling a native digital firm
    vs.
    Experience transforming a legacy firm
  • Commercial acumen
    vs.
    Technical expertise
  • Innovative and visionary
    vs.
    Execution-oriented

To make smart trade-offs, it is essential to have a clear vision of what success looks like in the role, and where direct reports may be able to compensate for leadership gaps. For example, corporates in transformation may want to know how they can maintain current success while also producing game-changing innovation, for which commercial acumen is key. Meanwhile digital natives may have a greater need for technical expertise and marketing experience in order to scale successfully and solidify brand perception. Either way, a high-performing product structure hinges on every function and process working as cohesively as a well-oiled machine – and it is the product leader who has to bring it all together.

“One of the things I love about product management is that people enter it because they have a real passion for connecting people and technology or people and digital experiences”

Brian Harris

Looking ahead, as the need for new CPO profiles grow, product leaders have the opportunity to create purpose-driven structures and programs that train junior talent into tomorrow’s leaders. In this sense, the ideal CPO will be one who is strong both in attracting and developing talent.

“For your talent to progress, connecting with internal and external communities of practice is crucial. Managers in a product function should be responsible for coaching junior team members, especially on the soft skills. They need to create opportunities for hands-on learning of managing stakeholders and communicating ideas.”

Martin Eriksson

Framework for discussion

The ideal product leader comes in different varieties depending on your business, your strategy, and the maturity of your product function. The following set of diagnostic questions can help inform and frame your thinking around the most appropriate talent for your needs.

Current situation

  • Is the product new to the market?

  • Is there product buy-in from the top team?

  • Is product development core to the business strategy?

  • Is product more aligned to marketing, or technology, or a business unit?

  • Who does the product function report to?

Current capability

  • How sophisticated is the product function?

  • What are the processes/structure in place – e.g. waterfall, agile, full-stack tribes and squads?

  • Is the product team aligned to the business strategy?

  • Is the product function continuously iterating and innovating?

  • Is there a talent pipeline for the product function? Is the Product leader engaged in succession planning?

Strategy