A common question in the world of Product Management is where exactly the role should sit in a company’s organization chart. Some people claim that the role “needs” to be part of Marketing. Some people claim the role “needs” to be a part of Development. Everyone seems to have some opinion on the matter, and often it’s a result of an agenda to have greater influence on the design, development, and prioritization of product improvements — whether this is an implicit or explicit agenda.
But if we put all the political jockeying and agenda-running aside, the flat-out truth is that the Product Manager, and his or her surrounding team, needs to be as independent as possible. They need to be the hub around which all the spokes of the organization rotate, and they need to be empowered to tell people “No” when and where the need arises. They need to be able to push back on agendas, challenge ideas that don’t fit the strategic goal of the company and the product, and to have someone at their back to whom everyone else in some way, shape, or form, must bow.
For this reason, I am a firm believer that the only person to whom Product Management should report is the CEO or COO of a company or division. And, if that means (as it often does) that there needs to be some “insulation” role between the CEO/COO and product management, the company should invest in a VP or Director of Product to play that part.
Any other situation inevitably leads to conflicts between the people to whom the Product Manager reports and the needs of the Product Manager to independently strategize, prioritize, and execute on the right problems to drive their product forward.
Let’s take Development, for example, since it is quite common in tech companies to see the Product Management team report to a CTO or to a Vice-President of Engineering. When a Product Manager reports through Development, there is a natural tendency for them to focus on technical needs of the product over market needs of a product. There is also pressure through the “chain of command” to prefer the proposals, needs, and requests of those within the Development team over those of external stakeholders, often people who are actually closer to the market and the customer than the development team. Plus, development teams on the whole tend to be insular and secretive, not wanting to show things that aren’t “done” yet — this aspect of the development team can creep in to a Product Management role very insidiously, and slowly the PM becomes far more internal-facing and loses touch with the market. Lastly, a Product Manager, just like any employee, wants to make sure that their direct supervisor thinks that they’re doing a good job. Therefore, even when there’s no overt pressure to conform or prefer the agenda of the Development team, there’s often a covert bias that plays into the daily decisions of the Product Manager.
A similar thing can happen if the Product Manager finds themselves directly reporting to a Marketing and/or Sales team, though with different indicators to be on the lookout for. Now, one might think that it would be “natural” for a Product Manager to thrive under the team that arguably has the most direct and impactful interactions with the market, prospects, and existing clients. And while that is true — the possibility for direct market interaction can be much greater in this environment — the problem is that it all comes tinged and tainted with making that next sale or landing the next big account. inevitably, a Product Manager working within a Marketing organization is going to feel pressure to prioritize what the Sales and Marketing teams are hearing over the direct insights of the Product Manager and over the other ideas both within the company and without. These tend to be very short-sighted, sign-the-deal, improvements — and unfortunately they are almost universally one-shot improvements focused on a single client who may or may not represent the market as a whole. As a result, the Product Manager turns the product into a custom-developed tool, rather than a broadly-applicable product.
You can create similar hypotheticals for other organization structures that might put a PM under different umbrellas — Support would prefer immediate customer pain over long-term payoffs; Service organizations would prefer internal tools and improvements over external UX and UI improvements; Finance would want to focus on items that reduce the bottom line, but may not improve the top line. For nearly every proposal, there’s an agenda that will ultimately serve to weaken the role of Product Management.
Now, that’s not to say that conflicts never occur with the CEO/COO of a company, should the PM report directly to him or her. However, the CEO or COO of the company ultimately has the veto power over nearly any direction that anyone in the company might want to go in; thus, there’s nothing special about having that power or authority over the PM. Additionally, it’s usually the CEO/COO who adopts or proposes the vision of the company and has leverage over the strategic direction of the product as a whole. And in order to make those decisions, they — like a Product Manager — ideally take the input from their management team, who presumably represent the interests of their respective teams. In startups, the CEO often is the Product Manager; and as a company grows, it makes very little sense to move that responsibility out from under the CEO and into another team — because only the CEO has the responsibility for the vision and direction of the company, and by placing the Product Manager directly under the CEO, he or she has the best position from which to work with all of the other stakeholders in the company.
A Product Manager works best when they work independent of the hidden agendas and necessary self-interest of the varying departments within an organization. And the only way to ensure that they retain this independence is by placing them in their natural role on the org chart — directly under the CEO/COO.