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By Amit Somani – Managing Partner, Prime Venture Partners
These words carry profound implications in today’s dynamic business environment. Products wield an unprecedented influence over companies, shaping their strategies, financial performance, and overall success. While we peer into the future, it becomes increasingly evident that the destinies of products and businesses are irrevocably intertwined, this symbiotic relationship is even more pronounced in the digital age.
In this blog, we delve into the insights shared by Amit Somani – Managing Partner, Prime Venture Partners on the evolving landscape of product managers and CEOs. We’ll also explore whether the future holds a merging of roles and whether product managers will ascend to the CEO position. We will also try to understand whether CEOs continue to nurture and champion products, especially those who have climbed the ranks through a product-oriented path.
Elon Musk’s involvement in groundbreaking ventures like Tesla and SpaceX, which seemingly transcend the traditional boundaries of technology, underscores the profound changes reshaping industries. It echoes the sentiment expressed by Marc Andreessen years ago when he proclaimed that “software is eating the world.” Satya Nadella’s recent observation that more digitization occurred in two years than in the initial two months of the COVID-19 pandemic highlights the accelerating pace of transformation.
In light of these developments, we contemplate the emergence of a new breed of CEOs. Unlike traditional CEOs who often rise through finance or sales backgrounds, will we witness a wave of visionary product leaders ascending to the helm of organizations? Let’s explore the genesis of this transformative shift in leadership dynamics as we navigate the intricate relationship between products, technology, and the leaders of tomorrow.
A product manager can be compared to various roles and metaphors, each highlighting different aspects of their responsibilities:
1. Conductor of an Orchestra: Much like a conductor directs an orchestra without actually playing the instruments, a product manager oversees the entire product development process. They coordinate and inspire a team of individuals to work together harmoniously towards a common goal.
2. Midfielder in a Soccer Field: In the middle of the action, a product manager plays a pivotal role in facilitating communication between different departments or team members. They are often responsible for maintaining control, distributing tasks, and ensuring that the product development process flows smoothly.
3. Charles Darwin (Anthropologist and Scientist): Like Charles Darwin, who deeply understood consumer and human behavior as well as the evolution of species with his theory of evolution, a product manager needs insights into consumer behavior. They must be attuned to changing customer needs and market dynamics.
4. Engineer: Product manager roles need the analytical mindset of an engineer to make informed decisions about product development. They must understand technical aspects, feasibility, and constraints to create realistic product plans.
5. Diplomat: Diplomacy is a crucial skill for product managers. They must navigate diverse opinions, manage emotions, and handle conflicting priorities among team members, stakeholders, and other departments. Their role often involves bringing people with different perspectives together to achieve a common goal.
Let’s dive deeper in the form of three key pillars:
1. Customer-Centricity: Who is the customer & why does it matter to them?
This foundational pillar revolves around an unwavering customer obsession. To channel the wisdom of Paul Graham, founder of Y Combinator, “Build something people want.” This means identifying who your customers are, pinpointing the problems you aim to solve for them, understanding why your solution matters to them, assessing their willingness to engage with your product, and determining the optimal way to deliver a seamless experience. Customer obsession forms the bedrock of successful product management.
2. Insight and Innovation: Exceptional Product Managers, whether in large corporations or startups, share a common trait, they possess profound insights and are adept at navigating the evolving landscape. They excel at tracking shifts in consumer behavior and business dynamics. Moreover, they have a keen eye on technological advancements and understand how these changes can fuel transformative product innovations and elevate customer experiences. In today’s tech-driven world, being technologically savvy is paramount for product management roles and even CEOs, as highlighted by Clayton Christensen’s theory of disruptive innovation. It’s a realm where a deep understanding of technology can make all the difference, regardless of your role.
3. Operational Excellence: The devil is often in the details, and this is especially true in product lifecycle management. Operational excellence is about meticulous attention to minutiae, including prioritizing tasks, orchestrating product launches, and measuring performance against key metrics. This is where the rubber meets the road, and it’s essential to grasp the significance of operational excellence. Whether you come from an engineering background, project management, or another discipline, embracing this aspect is vital. It’s akin to the responsibilities of a startup CEO, who must be willing to tackle any task, no matter how granular, as they are the ultimate accountable authority.
These three pillars form the core of effective product management. Now let’s shift our focus to the perspective of a CEO.
What defines exceptional CEOs, especially in the context of technology, product, software, and internet-driven businesses, is a critical question. These businesses, often encapsulated in the acronym ‘FANGs’ (Facebook, Apple, Amazon, Netflix, and Google), which collectively generate a significant portion of S&P 500 profits, provide a unique backdrop. Over time, the lines between these tech giants and traditional companies, such as GE and Ford, are becoming increasingly blurred, as exemplified by Tesla’s evolution.
From my perspective, grounded in an entrepreneurial mindset, the role of a CEO in these contexts can be distilled into several key elements:
1. Financial Acumen: The CEO must possess a deep proficiency in financial matters. This includes managing and analyzing financial numbers, ensuring a healthy cash flow, and securing financial resources, whether through investor relations or revenue generation from customers. In essence, it’s about sound financial stewardship.
2. Execution and Product Delivery: Central to the CEO’s role is the execution of the company’s strategy. This entails bringing innovative products and experiences to customers, for which they are willing to pay or investors are willing to invest. It’s the art of making the company’s vision a reality.
3. People Leadership: The heart of any successful organization is its people. CEOs must prioritize cultivating a positive company culture and fostering a people-centric environment. This skill is shared with Product Managers, but the CEO’s role often extends to being the public face of the company. They interact with a wide array of stakeholders, including internal teams, external partners, and government entities, and often participate in public speaking engagements and strategic partnerships.
4. Strategic Vision: CEOs must possess the unique ability to navigate both the granular details and the broader strategic landscape. This means zooming in to address specific issues while maintaining a holistic perspective to envision the bigger picture, the forest, and the trees, as it were.
Let’s dive deeper in the form of three key pillars:
1. Zoom in and Zoom Out: Ability to paint the vision & execute the minutiae.
The capacity to both envision a compelling, often unprecedented future and effectively execute the intricate details required to realize that vision. It’s about being able to paint a captivating picture of a world that goes beyond conventional imagination while also diving deep into specifics. As one saying goes, great managerial CEOs set and hit targets that are clear and understandable to everyone, while outstanding entrepreneurial CEOs and Product Managers achieve targets that are beyond the realm of ordinary comprehension – like savoring a molecular gastronomy dish that defies the ordinary.
2. People Leader and Manager: The ability to organize, inspire, and drive results through people. Unlike the role of Product Manager, which often resembles that of a soccer midfielder or an orchestra conductor, the CEO’s role necessitates actively managing individuals. This entails leading, motivating, challenging, assisting, and even making tough decisions such as performance improvements, terminations, hiring, and onboarding. Proficiency in people skills is indispensable for CEOs, and it’s worth noting that not all Product Managers or engineers naturally excel in this area.
3. Customers and Capital: Successful CEOs and Product Managers are adept at managing three vital aspects – Customers, Cash Flow, and Investors. They have the skills to nurture strong customer relationships, ensure a healthy cash flow, and effectively engage with and manage investors. These are the three pillars upon which the success of any business or product vision is built.
These are the three cornerstones of their effectiveness in their respective roles, manage people manage capital, and be able to paint the vision and then deliver to that vision.
Here are the key similarities between CEOs and Product Managers:
1. Capital Allocation: Both roles involve decisions related to the allocation of resources, not just limited to financial capital but also encompassing human resources, time, and technology. This entails determining where to invest resources to address specific problems or opportunities effectively.
2. Decision Making: Decision-making is a central aspect of both roles. CEOs and Product Managers must make crucial decisions, often in the face of uncertainty and ambiguity. Their ability to make sound decisions shapes the direction of the company or product.
3. High Agency: Great CEOs and Product Managers exhibit high agency, meaning they take proactive and determined actions to overcome challenges and find solutions. They are action-oriented problem solvers who don’t get bogged down in discussions but seek ways to get things done.
4. Micro and Macro Perspective: Both roles require individuals to balance micro-level details and macro-level trends. Understanding industry-wide macro trends and applying them to make informed micro-level decisions is essential. This involves looking ahead to anticipate future developments.
5. Communication Skills: Effective communication is a shared skill set. CEOs and Product Managers must excel in written and verbal communication, inspiring teams, and empathizing with stakeholders. Their communication skills are critical for aligning teams and conveying a compelling vision.
6. Ecosystem Management: Managing complex networks of relationships and stakeholders is a vital aspect of both roles. CEOs and Product Managers need to navigate and align various moving parts within and outside the organization to achieve their goals. This involves fostering collaboration and synergy among different elements of the ecosystem.
Here are the distinguishing traits between CEOs and Product Managers:
1. Leadership Style: CEOs typically lead by authority, holding ultimate responsibility for the organization’s performance. They often manage a large reporting organization and may report to a board. In contrast, product roles often lead through influence, as their role doesn’t always entail a significant reporting structure. Leading people and managing an organization is a key CEO responsibility that may differ from the more product-focused roles and responsibilities of Product Managers.
2. Execution: Delegation vs. Collaboration: CEOs must excel at delegation, particularly in larger organizations. They delegate tasks and responsibilities to their teams. In contrast, Product Managers, especially in smaller startups, may struggle with delegation as they tend to be highly involved in the product’s development. Additionally, Product Managers are often collaborative in nature, working closely with cross-functional teams. This collaborative skill can be advantageous for transitioning to a CEO role because CEOs also require influence and collaboration skills in addition to delegation.
3. Strategic Focus: The CEO’s strategic focus encompasses the entire business holistically. They are responsible for setting the overall strategic direction of the company. Product Managers, on the other hand, primarily focus on product strategy, which is an intersection of the business vision and how to deliver solutions to customers. The CEO’s strategic responsibilities are broader and encompass the entire organization.
4. Key Metrics: CEOs concentrate on overall Profit and Loss (P&L), cash flow, and the overall health of the business. While customer satisfaction is a shared concern, CEOs have a more comprehensive set of metrics to monitor. Product Managers are often focused on product-specific metrics such as Net Promoter Score (NPS), conversion rates, Monthly Recurring Revenue (MRR), or other product-related performance indicators. Their focus is primarily on how the product aligns with customer needs and contributes to revenue generation.
While both roles require leadership and decision-making skills, the CEO’s responsibilities extend beyond product-focused aspects, making them accountable for the overall performance and strategy of the organization.
Here are some examples of Product Managers who successfully transitioned into CEO roles:
1. Sundar Pichai – Google: Sundar Pichai, a former Product Manager, is now the CEO of Google. He exemplifies a classic corporate product leader turned CEO, demonstrating that product management skills can translate well into executive leadership.
2. Stewart Butterfield – Slack: Stewart Butterfield, the co-founder of Slack, has a background in product management. He played a pivotal role in shaping Slack into a successful business, showcasing the potential for product managers to become CEOs, especially when they co-found the company.
3. Marissa Mayer – Yahoo: Marissa Mayer, while initially known for her role at Google as an engineer and product manager, transitioned to become the CEO of Yahoo. Her experience in product and brand management and technology leadership contributed to her CEO role, even though the outcome at Yahoo was mixed.
These examples illustrate the trend of product managers ascending to CEO positions, whether in large corporations or startups. The fast-paced nature of technology innovation and the need for leaders who understand the dynamics of product development and technology advancements make product managers well-suited for CEO roles.
In the coming decade, it’s likely that more product managers and technologists with deep technical knowledge will assume CEO positions in multi-billion-dollar companies. This trend is driven by the imperative for organizations to stay ahead in a rapidly evolving tech landscape.
Amit Somani – Managing Partner, Prime Venture Partners
Product Managers oversee the entire product development process, coordinating and inspiring cross-functional teams, maintaining control, and ensuring smooth progress.
Exceptional CEOs exhibit financial acumen, execution, and product delivery skills, people leadership, and strategic vision. They must navigate both micro and macro perspectives, manage people, and capital, and have the ability to paint a compelling vision while executing detailed plans.
Both roles involve capital allocation, decision-making, high agency, balancing micro and macro perspectives, effective communication, and ecosystem management as core skills in managing resources and driving success.
CEOs often lead by authority, managing a large organization and being accountable for overall performance. Product Managers often lead through influence, working closely with cross-functional teams. CEOs excel at delegation, while Product Managers may have a more collaborative role.
Several examples like Sundar Pichai at Google and Stewart Butterfield at Slack demonstrate that Product Managers can transition into CEO roles effectively, especially in technology-driven companies. Their understanding of technology, customer-centricity, and innovation make them well-suited for executive leadership roles in rapidly evolving industries.
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