Product managers have crucial roles in software companies, (mckinsey.com) but from a talent-management standpoint, they are frequently disregarded. We can tackle this industry-wide problem with four levers.
Software is a primary growth driver for any firm, and one of the most important responsibilities in that company is still product management. (mckinsey.com) Amidst the increasing significance of data in decision-making, heightened attention to customers and design, and the advancement of software-development techniques, the product manager’s function has transformed to encompass all facets of ensuring a successful product. Because of this, product managers are frequently ranked among the top talent priorities by CEOs and other technology leaders. (mckinsey.com) Inversely, the McKinsey Product Management Index shows that businesses are underfunding this vital talent pool.
Product managers at top software businesses are surveyed by the McKinsey Product Management (mckinsey.com) Index to learn more about the skills and facilitators that produce high-achieving product managers (Exhibit 1). The systemic deficiencies {mckinsey.com/industries/technology-media-and-telecommunications/our-insights/the-product-management-talent-dilemma} around software talent management were brought to light by this research; in fact, less than half of the product managers feel ready to take on their current responsibilities or develop into future product leaders.
Product Managers Impact Every Aspect of the Product by Investing Time in a Variety of Crucial Areas
The variety of tasks that require product managers’ attention is shown by the McKinsey Product Management Index. An ordinary product manager’s days and weeks are dispersed, so they must be adept at taking on many hats and setting strict priorities (Exhibit 2).
A wide range of decisions are made by modern product managers. (mckinsey.com) For instance, about 80% of product managers actively engage in design processes, over 80% are involved in decisions on how to go to market, and nearly 50% are involved in pricing decisions. Furthermore, 60% of product managers possess fundamental analytics abilities, allowing them to examine metrics and derive conclusions without the assistance of analysts.
The Lack of Talent Management is Widespread
The talent-management procedures related to the product manager position are unexpectedly inadequate, given the pivotal role that they play. This disparity is noticeable in the industry at huge Silicon Valley software corporations, early-stage tech startups, and established businesses in other industries that are moving towards a more software-focused focus.
For instance, only 35% of product managers feel that they are clear about what it would take to advance in their companies, about the same percentage feel that they are adequately coached and mentored, (mckinsey.com) and about 20% say that their organisations have very successful programmes to find and keep the best talent.
We note a number of underlying factors contributing to this skill development disparity. First, unlike in engineering, organisations have not (mckinsey.com) consistently defined an expert track for product managers, and there are few roles in the product organisation that include managing people and teams. If they aren’t managing more people, this can keep product managers from developing or feeling like their careers are moving forward.
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Furthermore, there is frequently a lack of clarity regarding the leadership development model for product management, which outlines the attitudes and behaviours that managers at different levels are expected to exhibit. Consequently, the sole means of evaluating product managers is through the effectiveness of their product. (mckinsey.com) Product managers tell us that they think doing the right things is not as important as being in the right place at the right moment to become part of a successful product in order to advance in their careers at their companies.
{mckinsey.com/industries/technology-media-and-telecommunications/our-insights/the-product-management-talent-dilemma}
Furthermore, very few software organisations have implemented systems to facilitate the learning that comes with product management—a skill that is generally acquired on the job. Product managers frequently begin their careers in other departments, including engineering, design, or marketing, and they bring with them a certain set of abilities from other positions. (mckinsey.com) But in order to wear the many hats that product managers need to wear, this transitional talent needs assistance.
The fact that most organisations only employ a small number of product managers and as a result, (mckinsey.com) they frequently rank lower on HR directors’ agendas, exacerbates the problem.
Companies can create a top-notch product management talent programme by incorporating a number of components.
To create a top-tier programme for product management talent, there are four important levers to pull.
First, describe the organization’s leadership development model for product management. (mckinsey.com) Included in this should be a clear, practical explanation of the organization’s expectations and desires for its product managers. It differs from the traditional list of capabilities used to evaluate individuals and should represent the organization’s priorities and strategy. A leadership model, on the other hand, is described as specific descriptions of desirable behaviours, such as “acts to reach timely closure on decisions.” (mckinsey.com) Competency models, on the other hand, are frequently expressed as inherent traits, qualities, or values that product managers should have, such as “is decisive.” Additionally, the leadership model ought to describe how various organisational transformations are implemented. {mckinsey.com/industries/technology-media-and-telecommunications/our-insights/the-product-management-talent-dilemma} What are the differences in the behaviours and mindsets of a principal product manager who is well-established and migrating to a director of product, for instance?
Secondly, give the product managers access to organisational resources that facilitate their further development and training. Rotational programmes, (mckinsey.com) regular product reviews that emphasise coaching and knowledge sharing over inspection, putting oneself in other roles (answering support calls or giving customer demonstrations, for example), conducting skip-level one-on-one sessions, offering formal mentorship programmes, providing regular growth-based feedback, and so on are just a few ways to achieve this.
Third, use a field-and-forum strategy to provide a comprehensive learning experience. Through our work with technology firms, we have found a number of guiding ideas and programme techniques. The first is that doing is the best way for most adults, even product managers, to learn; watching videos or sitting in classes is not as effective. (mckinsey.com) Furthermore, activities rooted in their daily work environment help product managers learn more efficiently than general product management courses. {mckinsey.com/industries/technology-media-and-telecommunications/our-insights/the-product-management-talent-dilemma} As an illustration, we have implemented a programme called the Product Management Academy, wherein product managers undertake challenging projects and receive weekly coaching to help them succeed (Exhibit 3). It is crucial to remember that these educational initiatives need to be customised to the various shifts that each organisation faces. Furthermore, (mckinsey.com) it’s critical to track key performance indicators for these programmes that gauge participation as well as their subsequent efficacy in order to put real numbers on the “soft stuff.”
Lastly, senior leadership should consider hiring to be a strategic goal. Senior product managers at best-in-class software organisations frequently report devoting 3 to 5 percent of their time—that is, a half-day to a full day—to hiring. Getting three things right is essential to effective recruiting:
figuring out and communicating the company’s distinct value proposition for product managers while utilising a variety of sourcing methods (such as meet-ups, online forums like Hacker News, internal talent scouting in other departments that are likely to produce product managers, and “acqui-hires”)
an effective hiring procedure that eliminates implicit prejudices and assesses candidates’ practical talents (e.g., via case studies, in-person product concept presentations, {mckinsey.com/industries/technology-media-and-telecommunications/our-insights/the-product-management-talent-dilemma} analyses utilising actual product data, cross-functional interactions to evaluate collaboration with engineering and design, etc.)
One of the most important talent pools for every software development company is product management, however it frequently receives insufficient attention. (mckinsey.com) A comprehensive talent-management programme with multiple facets is necessary to have a world-class product management department. We advise the chief HR officer and the head of product to make this a shared focus.