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What is the Product Management Process?
The Product management process enables teams to develop the right solution for all stakeholders. It’s about using data and experience to establish why a certain feature or product is what customers need. And it’s about creating a product that will satisfy all internal stakeholders and other parties.
This process guides strategic planning and has oversight of the profitability of new products. A product management process generally involves:
- Customer visits
- Market research
- Product definitions
- Feature lists
- Product roadmaps
- Customer support
- Success metrics
- Obsolescence plans
Companies have a real opportunity to improve their product management processes. Research shows that while a fully optimized product manager can increase profits by 34%, only about one-half of companies have a consistent product management process. Thus, an effective product management process is an opportunity to gain a competitive advantage.
How Does the Product Management Process Differ from the Product Development Process?
Product management role is to lead and guide the product management process. They are responsible for representing all stakeholders from the front end when products are merely concepts until the company launches a marketable product (from start to finish, this is called time to market.)
The product development process is a subset of the product management process that is concerned with executing and launching a product idea. The product management process is broader.
The product management process tends to look at products from a customer and product marketing perspective, while product development is more concerned with the detailed design of the product. It is also concerned with the project management involved in bringing a solution to market that meets business goals.
The product management process is also distinct from product lifecycle management. Product lifecycle management concerns new and existing products and product lines. It manages each phase of a product’s existence until it is ready to be replaced in the market.
Whereas product management process is concerned with developing new solutions and bridging stakeholders and product developers, product lifecycle management involves the shepherding of in-market offerings right through to the product’s obsolescence.
What is the Role of the Product Manager?
Product managers develop a product vision and a product strategy to achieve it. They connect stakeholders with the product team’s development work.
Product managers are concerned with hearing the voice of the customer. Their role is to…
- Research the market
- Analyze the competitive landscape
- Derive product requirements with the user experience in mind
- Prioritize new product features
- Ideate to conceive product ideas that are aligned with the vision and the strategy
- Create go-to-market plans to ensure a successful product launch
The product manager’s job starts at the beginning, when products are mere concepts and continues throughout the development process. Throughout the product management process, product managers continue to represent customers and other stakeholders.
What are the Five Main Stages of the Product Management Process?
Product Strategy
Product strategy defines what products to develop and how and when. It entails creating a product vision that is aligned with the high-level corporate strategy. It then involves crafting a means to express that corporate strategy in a portfolio of products.
During this product strategy phase of the product management process, planners create a timeline for developing new products to optimize a product portfolio. They define the sources of new products, whether developed internally, acquired from the outside, or purchased and rebranded for resale. The product strategy should coordinate a business’s product lines, platforms, and derivatives.
Product road mapping often occurs during the product strategy phase. Product roadmaps are a visual representation of a company’s strategy. Their aim is to connect the product vision with the development team. They help align the cross-functional team around the strategy and aid in decision-making and investments.
Good roadmaps spur innovation and lead to better products because they reveal the key differentiators and messaging the sales team can use to meet profitability goals and other financial KPIs.
Roadmaps also improve execution by showing how the product backlog will roll out over time. Product roadmaps help product managers and product owners make decisions around technology requirements, resource allocation, and product positioning throughout the product management lifecycle.
Discovery Stage
One of the consistent challenges of creating great products is product discovery. An important portion of this discovery stage is idea management. This is the process of managing the portfolio of early-stage concepts, brainstorming around them, fleshing them out, researching them, and, eventually, moving them into the development process. It begins to connect concepts to user needs and market needs.
Product Discovery also includes:
- Gathering potential customer input through interviews, focus groups, and other research methodologies
- Observing users as they use clickable prototypes or interact with mockups to inform UX design and to create personas that inform the design and marketing teams
- Creating user journey maps based on user research and customer feedback (also known as story mapping)
- Prototyping and validation: testing the viability of the product and its functionality (a/b testing being a well-known example)
The discovery stage is best conducted within a protected space where early stage product concepts are shielded from bureaucracy and undue Management interference. Within this protected space, product managers and their team members can concentrate on product-market fit, alignment with product strategy, and technical feasibility.
The discovery phase is an opportunity for companies to organize their investments in new products, and remove as much risk from the final product as possible. If the product is fit for the market and for the product portfolio, then new ideas are removed from the protected space and are ready for further definition.
Product Definition: Epics, Stories, Customer Feedback and Prioritization
The next step in the product management process is to create a detailed product definition. This includes preliminary assessments of the market, features pricing, etc. The aim is to create an initial spec that the product manager can communicate to a development team.
Agile software development often employs user stories and epics to define products and the tasks involved in developing them. Based on customer input, product managers create user stories, which are product requirements expressed from a customer’s perspective.
Epics take the major tasks required to realize these stories and break them into smaller, more specific ones. Each user story usually requires one to four weeks of work, called a sprint in Agile methodology. Epics are the larger iterations that may take several sprints to accomplish. Sometimes, several epics that serve a common organizational goal are called an initiative.
A product management process may also include business justification. Often the justification is made by financials and by showing how a given metric exceeds target thresholds. It may include a collection of metrics that represent progress toward product outcomes. This business case may include:
- Estimates for conversion rates, click-through rates, activation rates, consumables trail, cannibalization, ASPs, NPV, IRR, payback period, gross profit, and operating profit.
- An assessment of the business risks.
- A Business Assessment that verifies commercial and, where applicable, regulatory readiness
- And early phase report that provides evaluation of technological feasibility, manufacturability, and costs
Finally, the product management process involves prioritizing product managers’ various projects in development, following a product management methodology. They allocate resources in keeping with these priority lists. Companies use their risk profile and their strategic direction to guide investment among newly approved projects.
Minimum Viable Product (MVP) Development
During this next stage of the product management process, the development stage, the teams execute a detailed design and prototype of the new product. Teams alpha-test a prototype and collaborate with customers iteratively.
They take the customer feedback they receive and incorporate it into prototypes. In parallel, marketing, sales, and manufacturing begin to create the launch and manufacturing platforms to support the emerging product.
This phase often ends with the team developing a minimum viable product. This is the least costly version of a product that demonstrates the basic functionality and that will attract the richest user feedback. Product teams then iterate the MVP to improve or add new features.
It is important to understand that the MVP is a learning opportunity. Often your best customers are your best advisors and critics.
Go To Market
In the last phase of the product management process. the team develops a commercialization plan for the final version of the product. This go-to-market phase includes marketing and sales plans, including any necessary sales training.
The go-to-market plan must also demonstrate product quality, and product performance, and that the feature set is optimal. The plan must also demonstrate sufficient customer support capability.
The product management process then directs managers to operationalize the manufacture and customer support for the product. Test marketing may enable the company to continue leveraging customer feedback for product improvement.
During this phase, Management also approves the team’s budget and go-to-market plan. In a final check-in with Management, the team demonstrates that the product operates as promised and that the market and sales plans are in place. The team may also look into the future and begin to imagine a next generation of the product.
The product manager’s job isn’t over when the go-to-market planning is complete. Product marketing picks up the ball to market and sell the product. But product management will continue to collect customer feedback to incorporate into the next release. Product managers monitor sales and begin planning for the next version of the product.
How does the process differ between software and hardware? (Agile vs Waterfall)
The waterfall approach is a generic term for traditional product development in which there are discrete steps and milestones. In the waterfall approach to product development, teams continue on to the next stage of a series of phases only after they meet their milestones. Like a waterfall, the workflow is in one direction.
Most hardware or mixed-systems companies have traditionally relied on waterfall methods of development based on stages with gates and gate reviews. Software development tends to use an Agile or Scrum methodology.
Agile processes are designed to create new products that leverage customer collaboration at a lower cost. The Agile approach relies on sprints, cycles that combine development with customer testing.
There is a hybrid approach that offers the best of both worlds. They may draw upon the best of waterfall and agile to get predictability and consistency of one, with the speed and customer focus of the other. Some companies nest Agile sprints between the phases of a larger, milestone-driven process.
Contrary to popular belief, Agile is not all or nothing. You can borrow what aspects of it work for your industry and environment. If, for example, daily stand-up meetings work, borrow them, even without the rest of the Agile methodology.
Product Management Process: Two Examples
Amazon
Amazon’s approach to the product management process is focused completely on the customer. Their product strategy derives 100% from customer needs.
Amazon likes to work backward from its target market. First, a product manager writes a press release for the product. They simplify these documents so that they’re understandable by anyone. Ideally, they contain no tech jargon. The press release is short, about one page.
Then, Amazon’s product management process directs the team to reason backward from this brief press release to the final product.
A Director at Amazon said, “Once the project moves into development, the press release can be used as a touchstone; a guiding light. The product team can ask themselves, ‘Are we building what is in the press release?’ If they find they’re spending time building things that aren’t in the press release (overbuilding), they need to ask themselves why. This keeps product development focused on achieving the customer benefits.”
Amazon engages deeply with the customer experience. Then they focus on their internal process for creating a product that meets a very specific need.
Product Management Process at a Startup
The product management process at a start-up is no different from that of an established company. It involves idea screening, customer research, planning and prototyping, and developing a go-to-market approach.
But since startups have little margin for error, the product manager, who serves as the bridge between the development team and other stakeholders, is an especially crucial role.
The differentiator among startups is that product managers must be especially aligned with the company founder. The founder will usually already have a good sense of the market potential and the customer needs.
Founders are likely to be able to find a person who can make a technical contribution (like hiring an app developer) more easily than they are able to find a product manager whose role involves the ability to make good judgments based on the very best evidence. The position asks a founder to make a very good hire in the startup phase.
Tips for Creating the Best Product Development Process
Carefully Define the Role of the Product Manager
Product managers are not project managers or program managers. As confusing as it is, these titles describe distinctly different roles. Product managers act as the interface between all stakeholders and the product development team that is responsible for product design and delivery. Product managers are about what to create and why.
Product Strategy Begins with a Clear Vision
Product strategy must be tied to overall corporate strategy. Then the strategy may be expressed in budgets and roadmaps. Product managers lack a clear product strategy and a clear criterion for evaluating and prioritizing product concepts. It all begins with a vision that product managers can articulate simply, preferably in a one-pager.
Create a Protected Space for Product Discovery
New product concepts are fragile. Think of them as hot-house flowers. The better product discovery processes allow discovery to happen so that product managers and their immediate teams are not badgered by fire-fighting about existing products. Neither can senior managers bog down the discovery process in too much bureaucracy. Product managers need a space to synthesize the customer knowledge they’ve created, brainstorm, and use their imaginations so that such activities are supported and valued – and not as if it’s a distraction from “real work.”
You Cannot Have Enough Customer Research
Be in no hurry to rush products into development. You cannot gather too much data on customers. The better your products will be the better you understand their worlds and challenges. Take your time and use multiple tools and techniques to understand them better. It is less expensive to take the time upfront than to develop the wrong product.
Create a Minimum Viable Product that Stimulates Learning
The purpose of an MVP is to 1) validate a concept and 2) learn as much as you can from customers. The best MVPs provide the most learning. You then apply that learning to the next iteration. This fast and flexible iteration and learning cycles get the results developers expect from Agile.
