The 5 ways Product Management prepares you to be a successful CEO
You don’t have to be a product manager before you’re a CEO, but it certainly helps
I recently re-read the classic Product Management memo written by Ben Horowitz (now 20 years ago): “Good product manager, Bad product manager”. He describes a product manager as the “CEO of the product”.
While I think much of that characterization still rings true, it sparked an internal reflection about the role of a CEO compared to that of a Product Manager.
Since leaving strategy consulting and joining eBay as a Product Manager, I have filled both roles, sometimes simultaneously, over the past 15 years. My personal experience is that Product Management has proved to be an excellent learning ground for my advising companies on how to grow (as with my current role at The Venture City), and also for my founding and leading various tech startups.
While I don’t suggest that you have to be a product manager before you’re a CEO, it certainly helps! This is a summary of the five key areas where the product management attitude and skillset provide a great foundation for transitioning into a CEO role.
1. Building the vision
Every new product needs a vision. It is a compact expression of the overarching goal i.e. the ultimate reason for creating the product. It describes the future that the product will create. This vision is then used to guide product-related decisions and ensures that everyone stays focused on delivering that goal. The Product Manager facilitates the creation of that product vision and effectively becomes the guardian of that vision.
Similarly, one of the most important responsibilities for a CEO is to develop a clear, long-term vision for the business and ensure that it is communicated and understood by the entire organization, and customers too. Internally, this allows teams to align resources, prioritise appropriately, and translate short-term projects into long-term results.
The skills required to create both the Product Vision and the Corporate Vision are very similar. In particular, the needs and concerns of a variety of stakeholders must be captured and considered, and the final version should be a vision that inspires people, motivates them, and connects them to the product/business. Both the Product Manager and the CEO need to “think big” and develop an ambitious plan, which is more likely to engage people and lay the foundation for change. Finally, an experienced CEO and Product Manager know to keep their visions separate from their executional strategy i.e. the steps to achieve that vision. While a product/corporate vision tends to stay relatively constant, a product/corporate strategy will likely change as customer feedback is received and the market itself evolves.
2. Developing goals
Both CEOs and Product Managers know that if they don’t know where they want to take the company/product, then there’s no way to develop a plan to get there.
Well-defined goals complement a clear vision, and are particularly important when it comes to prioritisation decisions (covered later).
OKRs (Objectives and Key Results) is a framework for defining and tracking objectives and their outcomes. OKRs aim to connect objectives to measurable results, and can be set at the company, team, and/or personal level. When everyone in the company/team understands where they need to go, everyone can work together towards that goal.
By identifying three to five high-level objectives, along with their associated key measurable results, Product Managers ensure that teams stay focused on solving customer problems (versus developing the next “cool” feature), and can objectively measure progress (or lack thereof), and assess whether they have met the goal (or not).
Similarly, CEOs use OKRs to ensure that employees always know what is expected of them, and help each team and individual understand how their work supports and aligns with the overall company vision, goals and objectives.
3. Making data-driven decisions
A great Product Manager understands the importance and power of data. This runs the gamut from monitoring changes in the market and competitor intelligence, generating customer insights through surveys and focus groups, identifying unmet needs in behaviour metrics and user funnel analysis, through to assessing project progress (and course-correcting if necessary), and retrospectively evaluating the success of a project.
Of course, it is not just about having more data. Trends in metrics are generally more insightful than point values, and deciding which metrics to measure and track is probably more important than the measurements themselves. Experienced Product Managers also know that it is important to understand the strengths and weaknesses of the analytics tools being used.
Similarly, CEOs understand the importance of data in making making consistent, objective decisions. Many CEOs strive to build a data-driven culture within their organisations because analytics provides a framework that makes it easy to measure, compare and evaluate trends, progress, targets, and achievements.
A data-driven culture does not mean that every decision should be based on numbers alone: gut-feel and experience are, of course, invaluable, and using the wrong metrics or measuring them incorrectly/inconsistently can lead to poor decisions.
However, when implemented correctly, metrics/analytics are critical to a business’ success. As Peter Drucker (the inventor of modern business management) said: “If you can’t measure it, you can’t improve it.”
4. Prioritization
A product team co-ordinates technology, data and design to solve real customer problems in a way that met the needs of the business. There are inevitable trade-offs to be made between these broad areas, and also within the classic project management triangle of quality, cost, and time (you can only select two to be fixed; at least one is always variable).
The way to deal with these trade-offs is through effective, pragmatic prioritization, a core skill for any successful Product Manager. Prioritization forces the team to think about why a project idea will have impact, and to be honest about the effort that’s needed to achieve it. Combined with a clear Product Vision, effective prioritization also makes it (relatively) easy to resist scope creep from key stakeholders.
Similarly, CEOs face similar prioritization challenges at a corporate level: resource allocation, investment decisions, and budgeting all involve difficult decisions about ranking complex options. Prioritization ensures that teams “do the right things”. CEOs can leverage simple tools from a Product Manager’s toolkit (e.g. “Effort vs Impact”, “RICE: Reach, Impact, Confidence and Effort”, and/or “Weighted scoring”) to powerful effect.
While I believe that prioritization is an essential skill for any CEO, it is particularly critical for early stage/ startup CEOs. Theirs is a world of severely limited time and resources, and prioritization is probably the one task that separates successful startups from those that fail. Larger, more mature companies are less exposed to the success/failure of individual projects; however, over the long-term, they too must prioritize appropriately and consistently if they are to grow and achieve their goals.
5. Authority and leadership styles
If asked to identify the biggest difference between a Product Manager and a CEO, many would immediately highlight the disparity in authority between the roles.
In theory, CEOs have the privilege of being able to make executive decisions, reallocate resources, and impose change unilaterally across the organization. On the other hand, Product Managers drive the vision, strategy, design and execution of their product/service. The emphasis there is very much on the verb “drive”, since Product Managers do not have the authority of the CEO, and must rely on a range of soft skills, such as influencing, persuading, negotiation, and effective communication to achieve the desired outcomes.
That said, a purely authoritarian leadership style is rarely effective. Democratic (decisions based on the views of all team members), Strategic (creating a vision and then influencing others to voluntarily pursue that vision), and Transformational (setting challenging goals for themselves and the team) leadership styles are considered far more effective in most situations. It should be obvious that a Product Manager’s skillset encompasses most, if not all, aspects of the latter leadership styles.
Similarly, even authoritarian CEOs must work with stakeholders over whom they have no direct control, particularly those external to the organisation. Product Managers understand the importance of collaborating with key stakeholders (both internal and external), managing their expectations, and the benefits of frequent, clear communication. CEOs must employ a similar approach to deliver corporate growth.
Conclusion
The product management mindset and skillset provide a great foundation for transitioning into a CEO role. The ability to build and communicate a clear vision along with associated actionable goals, prioritizing effectively using data-driven decisions, and leading through negotiation and influencing, are all core skills for both a successful Product Manager and a CEO.
