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The State of

Product Leadership
Insights from 300 Technology Product
Management Executives and Managers

A Pendo and Product Collective Study


Table of Contents
Introduction.....................................................................3

Survey Methodology......................................................4

The Product Leader Profile........................................... 5

Roles and Responsibilities............................................. 7

Feedback and Measurement....................................... 11

Reporting Relationships............................................... 14

Job Satisfaction and Progression................................ 16

Recommendations....................................................... 18

The State of Product Leadership A Pendo and Product Collective Study 2


Introduction

The elusive product leader. Who are they? What do they do? What makes them
effective? Large, seminal studies have been done across various corporate leadership
roles, but product management leadership remains a role with much less examination.
As software products have moved to the cloud, and product expectations have been
shaped by the elegant and intuitive experiences of consumer and mobile apps, great
product leadership is at a premium.
To get a better understanding of the state of product leadership, we ventured out into the wild to study product
leaders in their natural habitat. We surveyed 300, predominantly B2B, product leaders who own or lead teams
focused on software products. We asked about their responsibilities, effectiveness, organizational structure, career
path, and satisfaction.

We found some surprising things:


• Contrary to popular belief, most software product leaders don’t have a technical background.
• Product leaders have a wide range of responsibilities that extend far beyond the product roadmap - all the
way out to things like go-to-market execution, and revenue marketing.
• Most companies don’t have a dedicated product division or chief product officer, and product management
most often reports into the marketing organization.
• Despite the rapid growth in new tools and methodologies, product teams still rely on traditional customer
feedback and product development approaches.

To be fair, we also found some expected things. For example, product revenue is the most common success
metric used by product teams. This ebook walks through the key findings from our research, outlines a profile of
today’s product leaders, and aims to shine some light on what to this point has been an under-studied role.

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Survey Methodology

Survey Methodology
We focused our research on software companies based in North
America. In November of 2017 we surveyed product leaders from
a wide range of technology companies looking to understand
the key roles, responsibilities, background, career path, and
overall job satisfaction of product leaders today.

Companies Surveyed
Nearly 50% of the responses came from companies focused
on Software as a Service, while another 30% focus primarily on
on-premise offerings. Other companies have hybrid offerings
- with both cloud and on-premise applications, while 10% of
respondents own digital products within enterprises whose
primary business is outside of software.

Almost all respondents - 90% - have products that serve the


business to business (B2B) space, with the remainder having
consumer-facing products or a mix of both consumer and
business products, such as banking or other financial services
applications.

Company size 21% 21%


Company size was evenly distributed with companies varying in
size from less than $25 million in revenue to more than $1 billion. 17.3%
15.3% 15.3%

10%

<$25 million $25-50 million $51-100 million $101-500 million $501-1 billion >$1 billion

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The Product Leader Profile

The Product Leader Profile


The survey helped to illuminate an interesting view of the
average software product leader including their seniority,
background, and current role.

Years of Product Management Experience


Unlike a lot of careers in the technology industry such as
engineering, UX, support, or sales, product managers typically
do not start in that role directly out of college. They spend some
time in other roles before transitioning into product. Among our
respondents, over half of them have a tenure of 6 - 10 years in
product management, while another 30% have been in product
management roles for 11 - 20 years.

Current Role
Respondents were evenly split across across executive,
management and individual contributor roles. Respondents with
the longest tenures in the product management role were likely
to either be executives or individual contributors - indicating
that product managers are split between career paths that
grow towards a senior leadership role, or remain an individual
contributor.

33.3% Executive 37.7% Management 29.0% Individual


(I manage managers) (I manage individual contributors) Contributor

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The Product Leader Profile

Career Path Split - Executives and


Individual Contributors Have the Longest
Tenure
Another key question that we were interested in exploring was:
how do people get into product management? In the software
industry there’s often an assumption or expectation (often job
requirement as well) that product managers have a technical
background, and have perhaps done a stint in development prior
to making the switch to product management. Interestingly, our
respondents told a different story.

Academic or Professional Background


Prior to Product Management
Although 40% of product leaders in our survey do have a
technical background the majority do not. Nearly 60% of
respondents have a business rather than technical background.
The implication? Companies that are looking for product
management talent, may want to look beyond the engineering
department to find their next great product leader.

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Roles and Responsibilities

Roles and Responsibilities


“What would you say you do here?” The answer, according to
our survey, is “a lot.” Product leaders have a very wide range of
responsibilities, and own an array of functions.

Product Team Responsibilities


Product leaders in our survey reported some expected
responsibilities like product strategy, and design, or roadmap
prioritization. But product teams also reported some unexpected
responsibilities such as owning product development, go-to-
market strategy, and sales enablement initiatives.

We also asked product managers about the functional areas of


the business that fall under their management. Again, there were
some expected results - such as UX and design, but also a wide
range of other functions. Over 50% of product teams reported
owning development functions, while nearly 50% owned some
marketing function, and another 40% also owned market
research functions.

Functions Owned by the Product Team


The range of product management functions and responsibility
definitely varies by company. As company size increases the
breadth of responsibility decreases. Product managers at
companies with more than $100 million in revenue are much less
likely to have responsibility for marketing, design, and customer
success functions, suggesting a narrowing of role specialization
in larger companies.

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Roles and Responsibilities

Product Management Responsibilities by


Company Size
Although the remit for product teams was higher than we had
expected, there are still many instances where product leaders
must lead by influence - whether it’s for a few extra engineering
hours, or some marketing attention for a particular product.
We wanted to see which departments product teams felt most
aligned with for functions they don’t directly own.

Product Management Alignment with


Other Functions
Product leaders reported the strongest influence with marketing
and customer success teams, and the weakest influence with
engineering teams and sales teams. Weaker alignment with
engineering may represent resource constraints, or frustration
with the pace of delivery. In either case it’s an interesting finding,
reflecting a relatively high level of dissonance with product
management’s closest internal constituency. Product leaders
should look to cultivate productive relationships with their
engineering teams to maximize their effectiveness.

Speaking of effectiveness - we wanted to find out where product


leaders think they are effective at their jobs, and where they
struggle. For a range of common tasks we asked all of the
survey respondents to rate the effectiveness of their teams.

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Roles and Responsibilities

Product Team Effectiveness Highly Effective

Product teams consider themselves largely effective at all of


their core responsibilities. Areas that were rated the weakest
included customer advocacy and sales enablement. Product
leaders tended to rate themselves higher in the more visionary
aspects of their jobs such as product vision and go-to-market
strategy, and lower in more execution oriented functions like
development and roadmap prioritization.

This disparity is interesting since product leaders generally


describe themselves as more tactical than visionary. It may be
that they spend less time on visionary activities, and as a result, Highly Ineffective

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Product leaders not only considered themselves to be more
tactical than visionary, but they believe that tactical skill is what
is most in demand today, and will be in the future. Despite the
importance of powerful product vision, product teams are still
primarily focused on the nuts and bolts of shipping product. This
Your primary skill set
may represent a blind spot for product leadership. As the pace
of development and delivery increases in the world of software,
functional differentiators are much less durable. A strong product What your organization typically hires for/values most
vision and point-of-view are critical to long-term success. A
more tactical orientation may lead to a reactionary approach
to prioritization, and ultimately cede innovation and market What the best product managers will look like in five years
leadership to competitors.

And how do they ship product? We asked survey respondents Visionary Tactical
what development methodologies they currently use.
Unsurprisingly, Agile methodology is the most commonly used
approach with over 80% of respondents indicating that they use it.

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Roles and Responsibilities

Development Methodologies
More surprising is how many product teams still rely on
traditional waterfall methodology. More than 50% of
respondents indicated that they use waterfall in some capacity.
Waterfall is often regarded as insufficiently flexible to meet
the demands of modern software development teams, so it’s
interesting to see that it’s still in place for many teams. The
question the, is whether this mor traditional approach really
supports rapid iteration and product delivery.

The answer is “not really”. Despite the broad adoption of Agile,


and rapid growth of SaaS (heavily represented in our survey),
product teams are pretty far from continuous delivery of product
updates. We asked how often product teams ship new features
and products.

Launch Frequency
Less than a quarter of respondents reported launching features
on a monthly cadence, with the rest launching either quarterly or
annually. And only a very small percentage of teams ship more
than one product per year. This is pretty far from the regular,
continuous delivery that the shift to SaaS is expected to provide.
Either Agile isn’t being fully implemented (hence the 50% who
still use a waterfall approach in some capacity), or perhaps the
lack of alignment between product and engineering teams that
we also uncovered in the survey is leading to more “lumpy”
delivery of features and functions.

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Feedback and Measurement

Feedback and Measurement


Customer feedback is one of the most critical sources of insight

4.23
to inform the decisions that product teams make every day, and
generally product managers look to spend as much time with
customers as they can.

We can be forgiven for thinking that most product leaders would


see themselves as customer-led in their approach rather than
being reactive or competitor-led. Yet, when we asked survey
respondents, we heard a different answer.

Roadmap Decisions: Influenced more by


customers or competitors?
This was one of the most surprising results--and perhaps one of
the most consequential. True differentiation is one the hallmarks
of successful products, yet product teams are clearly focusing
on “me-too” features, perhaps leaning toward emulating
their competitors rather than blazing a new trail that delivers
unmatched customer value.
Customers
This finding goes hand-in-hand with product teams reported more
tactical (vs visionary) orientation. The power of an innovation
is based both on novelty and the extent to which it solves
customers’ pains. If a product team is reacting to competitive Competitors
behavior then the novelty of what they’re building may approach
zero. And if the product team isn’t listening to customers, the
likelihood of solving a specific pain is also fairly low.

More significantly, if companies across a market become too


tactical and reactionary in their approach they run a risk of
commoditization. And with that comes price pressures. Most
product leaders should look at these findings with alarm and
revisit their product roadmaps with an eye towards innovation
and customer-centricity.

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Feedback and Measurement

In addition to exploring their alignment with customers, we were


also curious to see how product teams go about collecting
feedback from customers. We asked the survey respondents
which methods they used most frequently to get and analyze
customer feedback.

Feedback Methods Used


Traditional methods of collecting customer insights dominated
the responses. Surveys were the most common response, with
over 80% of PMs indicating that they collect insights this way.
They were followed by interviews and focus groups as the most
popular ways to collect customer insight. Surprisingly, very few
respondents reported using experiments such as A/B testing,
or more advanced research methods like ethnography in their
approaches. These underused methods can offer a better
opportunity to gain true insight, as surveys, interviews, and
especially focus groups can reflect the biases of the interviewer
and result in uninteresting group-think. Adopting new research
methodologies is a significant opportunity for product teams to
differentiate. They help teams discover the true needs and wants
100
not explicitly conveyed during an interview or survey.
Individual Contributor
Another interesting finding: as product managers grow in
seniority and responsibility, their direct connections with
75
customers decrease. Executive

Customer Insight Collection: By


50
executives and individual contributors
Executives are much more likely to consume summary
information from surveys and NPS, but less likely to actually 25
get on the phone and talk to a customer. This makes sense as
executives are generally more time-constrained, but there is
never a substitute for a good one-on-one conversation with a
customer. By stripping away that primary data source, product 0
Interviews Surveys NPS User Groups

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Feedback and Measurement

executives may be missing out on insights about the product


experience, and opportunities to improve it.

We were also interested to learn which measurements they


thought were the most indicative of product and team success. To
that end, we asked survey participants which metrics they rely on.

Product Management Success Measures


Revenue and customer satisfaction metrics topped the list,
whereas actual usage metrics such as product usage or feature
adoption were often considered secondary measurements.
Revenue is the ultimate benchmark of product success, but
that poses a challenge for decision-making. Revenue is a
downstream metric–a lagging indicator. By the time some
element of the product experience shows up in revenue numbers
it’s too late for the product team to intervene and make a
change. Sentiment measures like NPS or CSAT can bridge that
gap and help to shed some light on how customers perceive a
product. However, in the absence of specific usage information, it
can be difficult to determine exactly how the product experience
is influencing customer happiness.

Another key metric of product success is customer retention


and churn, so it was surprising to see those measures largely
ignored by product teams. Likely, since the customer success
organization typically owns the renewal process, it’s seen as a
CS rather than product management metric. This is a mistake.
Yes, the CS team is responsible for customer renewal, but
considering how much of the overall customer experience takes
place in the product, the product experience is the number one
driver of retention and churn. This metric has a place alongside
revenue as an important product measure.

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Reporting Relationships

Reporting Relationships
It goes without saying that your boss has a lot of influence over
your priorities and the work that you do. The product team is
no different, which is why we wanted to understand where the
product team lives within an organization, and who they report
to. To begin to assess this, we asked our survey respondents
about the reporting structure within their organizations.

Product Management Reporting


Relationships
The results were somewhat surprising on two fronts. First, the
largest number of respondents indicated that they report into the
marketing team, while only 12% indicated that they are part of
an engineering or software development team. This represents
a pretty significant shift in the role of the product manager.
Historically in the software industry, product management teams
have been tightly aligned with engineering, in the most extreme
cases, serving as a glorified project manager for development
projects. Our survey shows that this has changed. This shift is
also a likely reason that our survey respondents report having
36.7% Business line 44.7% Marketing 12.0% Development/ 6.7% Product
poor influence and alignment with their development teams. (CEO, GM or equiv.) (CMO or equiv.) Engineering (CPO or equiv.)
(CTO or equiv.)
Despite the separation from engineering though, most product
leaders don’t have a seat in the boardroom. Only 7% of
respondents indicated that they report up to a chief product
officer (CPO). Product teams are much more likely to report into a
chief marketing officer (CMO) or other senior business executive.
This indicates that there is still a mindset shift needed within the
industry. As product experience becomes more and more critical
to the success of the business, companies will need to elevate
the visibility and responsibility of the product leadership function.

Next, we looked at how the chain of command for product teams


affects responsibilities and effectiveness. We found that product

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Reporting Relationships

teams that report into the CMO have a much wider remit than
teams reporting to other roles.

Job Responsibilities by Reporting Line


Product teams that report into marketing are much more likely to
have ownership over marketing-related functions such as pricing,
packaging, go-to-market strategy, and go-to-market execution.
This makes sense since these functions are typically owned by
a marketing organization even when product reports elsewhere.
Interestingly though, product teams that report into marketing
are more likely to own the roadmap and prioritization than
engineering-led teams. And they are more likely to have revenue
responsibility than line-of-business or CPO-led teams.

The differences aren’t quite as dramatic, but marketing-led teams


are also more likely to judge themselves as successful at their jobs.

Perceived Effectiveness by Reporting Line


Marketing-led teams perceived themselves to be more effective
at setting product vision, go-to-market activities, and achieving
revenue goals. It may be that product teams that report into
marketing are simply closer to the market - seeing the results of
sales and marketing activity for their products. However, from
our survey the product teams with the broadest remit, and the
greatest success are those that report into the CMO.

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Job Satisfaction and Progression

Job Satisfaction and


Progression
Net Promoter Score is a commonly-used methodology for
assessing customer satisfaction (our survey shows 72% of
product teams use it as a primary success metric). So, we
decided to use the same metric to assess the job satisfaction
of survey respondents. We asked them on a scale from 0 to 10
whether they’d recommend their chosen career path to a friend
or colleague.

Product Team NPS


An NPS score of 20 indicates that most of our respondents are
satisfied with their jobs, but are not highly enthusiastic. About
25% of respondents gave a “promoter” score of 9 or 10 for the
question. So if 75% aren’t highly enthusiastic about their current
career path, are they planning to change careers? We asked
respondents what they were planning to do for their next role.

Expected Next Job Role


Despite somewhat low enthusiasm, most product team members
plan to keep on keeping on. 97% of respondents expect their
next job to be in the same or a similar role. Clearly most product
leaders have enough job satisfaction to keep them on the same
career path. We were curious to see what, specific elements of
the job led to higher (and lower) levels of satisfaction.

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Job Satisfaction and Progression

Product Management NPS and Functions


Owned
We saw a significant variation in job satisfaction based on
which functions were owned by the product team. Teams with
ownership over engineering, UX, and market research functions
tended to be more satisfied, while teams that owned marketing,
sales, and customer success functions reported much lower
satisfaction. Product teams appear to be happiest when they are
focused on researching, and building products.

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Recommendations
With a deep, and frankly overdue, look into the state of product leadership, we found some interesting and surprising things. On a positive note, most product
leaders think they’re doing a good job, and most are reasonably satisfied with their careers. The majority are at least somewhat data-driven. However,
our survey uncovered a potentially troubling lack of strategic vision and customer orientation. Product leaders reported being primarily tactically focused
in their execution, and driven by their competitors rather than their customers. Clearly there some areas for improvement. Product teams that adopt these
recommendations have an opportunity to differentiate themselves and the products that they deliver.

Cast a wide hiring net


Our survey clearly showed that effective product leaders come from all different backgrounds. A prior career as an engineer is definitely not a prerequisite for
success in the product management role - neither for leadership or individual contribution. Hiring managers should take this to heart, and look more broadly
when recruiting team members. Great candidates may be getting overlooked.

Buy your engineers a beer (or whatever to jump-start the conversation)


Besides sales, product teams reported the weakest levels of influence and alignment with their counterparts in engineering. This may simply be an artifact
of delivery and resource constraints, but engineering is one of the most important product team constituents. Clearly product leaders have an opportunity to
foster a closer relationship with their engineering friends. You may find that those prioritization/resource discussions become a bit less painful.

Get out of “copycat” mode


No lasting product innovation or differentiation ever came out of copying a competitor. It was frankly somewhat disheartening to see most of the respondents
indicate that they are more competitor and customer led than truly innovative. Product teams should focus on their customer needs, and developing novel
ways to address them. Consider an end-to-end roadmap review. Ask your team how many items are about competitive parity vs true innovation. Then re-
prioritize appropriately.

Give product a seat in the boardroom


Product teams have a very wide range of roles and responsibilities - they own functions from engineering, to marketing and sales. Yet, they very rarely have
a defined C-level leadership role, and most likely report to other operational or marketing leadership functions. As more of the customer journey (for business
software in particular) takes place within the product, the product experience becomes a driver of business outcomes. Companies should consider elevating
product leadership to a more visible and responsible position within the senior leadership team.

Add product adoption and usage to your success metrics


Most product teams measure themselves using product revenue and NPS, and there’s nothing wrong with that - really. However, there is opportunity to more
effectively measure success. Revenue and satisfaction are downstream measurements, and aren’t terribly useful as diagnostic tools. Product teams should
look to add some metrics around product adoption and usage. They can be more predictive, and when analyzed alongside satisfaction scores can help
product teams understand how the product drives (or doesn’t drive) happiness.

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