The times they are a-changin’ in the world of product management. By that, I mean the process of developing and refining products has been turned on its head by the phenomenal success of FANG and their peers. When I started my MBA in 2004, this discussion would have been about FMCG companies like P&G. If we talked about tech, we would probably end up debating companies making “real” products like HP.
And for a good reason too. We were still recovering from FANG-like companies raising zillions of dollars selling pet food online before literally blowing themselves up. Back then, we were fascinated by Myspace, Amazon looked like this, Netflix still shipped DVDs, and we used Yahoo Mail.
In the last decade, my project roles have changed as well. Fewer clients hire Citisoft consultants as business analysts, and more would like us to play the “product owner.” Every year, a new breed of product-related methodologies and tools capture our imagination. One day we are in the presence of Stories, Sprints, and Epics and the next day, we might find ourselves organized in Tribes, Squads, and Chapters (thanks, Spotify). Their love for inventing new terms can only be matched by the financial industry. I am happy to serve both. This blog, though, is not about that. It is about the shifting relationship between business strategy and product management.
Business strategy has always informed other organizational functions, and product management is no different. We are increasingly seeing product management validating and improving business strategy by incrementally refining the product-market fit. In companies that can adapt their organization to a scaled agile framework, the two functions tend to jive even better. For digital-first companies like Wealthsimple or Robinhood, being product-led is a natural fit. That might not work for most asset or wealth managers—they are still ops-led and tech-supported.
Don’t get me wrong, they all have multi-year digital transformation programs and are scrambling to hire talent (internally and externally) to scale their digital ambitions. It has even led to a paradigm shift in how a bank views itself and puts tremendous pressure on its employees to retrain when their CEO says they are in the technology business and their products happen to be in banking. Many of my friends at a leading bank were “requested” to join their digital factory. Six years on, I don’t know who had it better—the ones who got left out or the ones who spent time in the factory trenches.
All this makes me think—are financial services companies ready to be product-led? It has worked for payments. Will it work for others?
As consultants, we are lucky to have a vantage point where we see what is happening not only inside our clients’ offices but also at their peers. That is one of the main reasons why we get hired. While it is getting more and more uncommon, I still get called in to write detailed (read: multi-month) requirements for migrating to a new portfolio management ecosystem or outsourcing back-office operations. And I stay focused and try not to boil the ocean. I have done this for 20-person family offices to sizeable 1000-person investment offices, all in the recent past. While my colleagues on the sell-side have had a head start in having fungible biz-tech teams functioning as relatively independent pods, the story is often different on the buy side. Many banks have not been able to scale their “change-the-bank” business teams to support the continuously improving mandate of product teams.
I struggled to get face time with the business teams for two months at a recent wealth client. They were too swamped with parallel requests from independent scrum teams—many of them asking similar questions. They requested us to bunch up stories as opposed to sending them piecemeal. The irony was not lost on me. I guess it is true—the more things change, the more they stay the same.
Let’s be fair—there is increasing evidence of CEOs describing their corporate strategy using words typically found in a data strategy or a product roadmap just a few years ago. The pandemic has only proven them right.
Let’s also be real—every organization has a different pace at which they innovate. Even if they want their products and services to be updated every two weeks, they can’t scale all the skills at the same pace. Technical teams tend to scale faster than business teams. While they would like their future to be different, there is the present to contend with. Their business strategy dictates how they will fund their aspirations which translates to budgets, objectives, and milestones.
Product management, like every other function within the firm, gets anchored by these hard facts. Even when there is a seemingly open checkbook, it doesn’t take long to pull budgets if there is a perception of incremental business value not being delivered by teams positioned to make continuous improvements.
Further reading: There is a reason why I called out P&G and HP. The roots of the Product Management function are often credited to Neil McElroy’s 800-word memo at P&G (later known as “The Brand Man”), where he argued for a single-minded focus on the Brand/Product and using market data to improve the products constantly. Shortly after, Bill Hewlett and David Packard started the HP Garage, now known as the “Birthplace of Silicon Valley,” and applied those principles in establishing the HP brand.
