Product development and innovation in the consumer goods industry has never been easy. The involvement of many stakeholders creates a multitude of opportunities for even the most promising innovations to go off track. And competing priorities can cause organizations to lose sight of the initial product and business goals.

The COVID-19 pandemic has further complicated the development of consumer products. Consumer beliefs and preferences will continue to evolve rapidly, forcing companies to redouble their efforts to embed the voice of the consumer throughout the product development process. As Steve Jobs famously noted, “You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new.”

In addition, companies must continue to prioritize innovation even as the pandemic puts pressure on budgets. Such investments can bring significant benefits: McKinsey analysis has found companies that invest in innovation during a crisis outperform the competition on market capitalization by 10 percent; investing in innovation after a crisis gives them a 30 percent advantage.

Last, companies will have to rethink innovation and collaboration in remote-working team structures. This dynamic will place more importance on roles and skill sets that involve orchestrating and integrating product development processes.

In our work with consumer-goods companies, we have identified a critical need for a product manager to connect these many stakeholders someone who is ultimately accountable for delivering consumer and business outcomes. The consumer-goods industry can learn from the evolution of product management in the technology industry and empower product managers to play this critical role.

A modern approach to product development

Many organizations will rapidly test new products and ideas to meet changing market demands, but this complex operating environment increases the urgent need for a sophisticated product management function. A modern product manager acts as a catalyst and objective arbiter of competing interests and perspectives in the product development process to facilitate both “designing the right thing” and “designing the thing right.”1

The consumer goods industry in many ways defined the notion of a “product” that addresses a specific consumer need and creates value. Tech companies built upon this product and consumer centric philosophy and created new ways to bring together different sources of insights to build world-class products. The modern product manager emerged from this evolution as a central role. In our work on strategic product efforts for consumer goods companies in recent years, we have found that specially appointed product leaders made a significant impact. We believe consumer goods companies can gain insights from how the product-manager role has emerged in the tech industry and, increasingly, in digital companies outside of tech to solve persistent challenges in consumer-product development.

How the modern product manager enhances design to value and innovation

Successful product development requires teams to engage with experts across disciplines while aligning four critical development lenses business, design, consumer, and technical.

The product manager has emerged as a crucial force to steer this process and balance these lenses. This role combines the orchestration of an agile scrum master, the insights of a data scientist, and the consumer centricity of a design lead. In our experience, the most effective product managers look to orient new product development around a consumer-first focus, connect different functions, and facilitate an agile process.

Building a modern product-management capability

While an effective product manager can have a tremendous impact on innovation efforts, companies must also invest in creating an environment where these professionals can thrive. In this way, modern product managers are similar to data and analytics talent without the proper commitment and support from across the company, they won’t be effective. Companies should focus their efforts on several areas.

Organizational structure

Senior leaders should champion innovation in product development, but they shouldn’t control the process. Instead, they should delegate ownership at the product manager level. Top down micromanaging can prematurely squash promising ideas, devalue necessary iteration, and demotivate otherwise highly engaged team members. Senior leaders should instead focus their energies on resolving uncertainties and mitigating risks to help each of their teams reach its full potential. The product manager needs to be at the canter of the development ecosystem, empowered to make decisions and resolve differences throughout the process with the support of senior leadership.

To facilitate the evolution of project managers to consumer product managers, consumer goods companies will need to do more than redefine the role. Companies also need to articulate the product management leadership development model for the organization. This should include a concrete, actionable description of what the organization wants and expects from its product managers. It is not the same as the conventional list of competencies used to assess employees; instead, it should reflect the organization’s strategy and priorities. For example, many companies use competency models, often expressed as innate traits, qualities, or values, that product managers should have, such as “is decisive.” A leadership model, however, is expressed as concrete descriptions of desired behaviours, such as “acts to reach timely closure on decisions.” The leadership model should also articulate various transitions in the organization for example, how the behaviours and mindsets needed for an established, principal product manager differ from those required to be a director of product.

Source: McKinsey