Merging Product Management & Marketing into a Single Function with James Morehead

WEBINAR TRANSCRIPT:

James Morehead: I'm very happy to be leading this session today. I'm going to do a brief presentation and appropriately so, I'm actually doing this from a customer location; I'm in the middle of a roadmap session of this customer, and they let me step out to do this important event.

I am going to talk about the way we have structured product management and marketing at SupportSoft; how that differs from other experiences and other places I've worked; some of the advantages of having a merge function and some of the challenges.

I look forward to your questions.

I am going to walk through some of the traditional ways in which product management and marketing organizations are out together. I am going to look at the merged organization that I lead at SupportSoft; some of the key constituents, the roles and responsibilities of my team members and key metrics that we're held against.

Then, turn it to some of the benefits and challenges of organizing this way and wrap up with a couple of conclusions.

First, looking at the traditional organization options, typically product marketing and product management are split into two separate functions, reporting to a chief marketing officer or perhaps an intermediary. There are also organizations, and this is closer to what I had at Portal Software, where there's a solutions or industry marketing group, a product marketing team and then product management.

They are typically split in to two separate functions with potentially a third function handling industry marketing. Potentially with even larger companies, and this was certainly the case at Nortel Networks, there are strategic marketing functions in a corporate location and then field marketing spread throughout regions. There are many variants of the above.

Looking at what SupportSoft has done, just to give you a context on SupportSoft, so you have a sense of the scale of the company, we're about 280 people. We're an enterprise software company and we support a variety of industry segments and product offerings.

We have a single product management and marketing function. My team covers all products, all industries, and has responsibility for inbound and outbound marketing. We are a global organization. I have team members in the United States, Canada, Europe and India, and we cover three main segments: digital service providers - specifically around broadband services, large corporate enterprises, and more recently we are bringing a direct consumer offer just to make my organization even more complex.

Why do we have a merged organization. Let's start with some of the key constituents. There are a number of inbound constituents. There's the engineering team, who we work very closely with to define requirements; work through data releases and to asses the quality and output of the products vs the requirements we've defined.

We've gone a step further at SupportSoft where we actually have a very iterative development cycle where we get many products that are produced during the development of the product that we interfacxe with customers to test prior to the full integrated product being available.

This has given us an ability to have a real-time view of the product and is one of the advantages we get from an inbound, outbound combined unit. We can have the same person working with engineering, interfacing with a customer as we release steps along the way towards a full product.

We interface with legal primarily around contractual areas with our enterprise software agreements. We interface with professional services. Of course, we primarily sell to very large service providers and enterprises, and as a result there are inevitably field customizations that we want to assess and roll back into the product, and then there's customer interaction from a roadmap perspective.

There are constituents that are outbound in nature, which would be sales and sales consulting and sales engineering, working with those teams on responding to parts of the RFP that aren't covered under templates; working with them on pre-sales engagement, on industry events with customers, on speaking engagements with customers.

There is interfacing with corporate marketing who do all the collateral, the PR, and also relations/press relations, and the investor relations teams that deals of course with the investors in our company. We are a public company.

Having, again, this team that is very intimate with the product, also be articulate with these outbound constituents means that in any of these outbound engagements, those constituents can count on my team to drill down as deep as necessary or stay at a high strategic level. They have the flexibility to do so without having to bring another person into the meeting.

We also engage with the executive staff on product direction, forecast for product revenue, and all the planning exercises - and of course wrapped around all of this - we spend a lot of time with customers, prospects and partners evangelizing the solutions, getting their feedback and understanding how they are using the product, and helping to juggle all of those inputs in terms of prioritizing the roadmap.

Under the hood, there are lots of other things we do around competitive research, market research, usability to make our products world class. It's a juggling act as I'm sure everyone on this call can appreciate.

We look at the roles and responsibilities across my team; each of my team members has a lot of stuff on their plate that they have to worry about. In a split organization, the inbound and outbound, maybe not quite this cleanly, but they would likely split between an outbound being product marketing and inbound being product management.

In my team, I expect each of my team members to be able to handle all of these items at the right priority level.

Of course, there's customer interaction which I talked about; pre-sales support, RFPs, QBRs - meaning quarterly business reviews - and roadmap presentations like I'm doing today, as well as managing customers through a beta program.

On the outbound side, I won't read through all the bullets but a traditional infrastructure marketing you need to evangelize and sell enterprise software.

What is useful about having a team that's also doing the inbound effort, is that when they are doing a speaking engagement, for example, I can send my team to events that are technical in nature and maybe useful for part of the audience we're trying to reach without having to educate them; they have that intimacy.

The same time, I've selected people for my team that can talk at a strategic level but still have that intimate knowledge of the products under their hats when they need it.

On the inbound side, there's a tremendous amount of planning and research work that happens; supporting of mergers and acquisitions when they come about, competitive analysis and distilling all of this into the requirements that drive the engineering process which then supports the roadmap and release planning.

In addition to that, all the pricing, analysis, packaging and support for training.
So there's a lot on the plate of each of my merged product management product marketing individuals and as I come back to this later, that introduces some benefits but also creates some challenges.

How do you judge the success of an organization with so many constituents and so many roles and responsibilities. We definitely don't take the approach of a hundred different metrics where you get lost in the detail but we do tie back to some critical objectives.

I'll spend a little bit of time on this because I think this is useful. There are different ways of measuring success of an organization, and we're still finding as we go. I think there are some useful things we've done that you'll find helpful.

Like many companies, we do quarterly MBOs. Almost everyone on my team is on a fixed and variable pay structure. I find this to be extremely beneficial and helps focus my team when they could easily be pulled in the direction of the person that's yelling the loudest. MBOs help keep my team focused on the right things.

There's no question that MBOs with money behind them mean a lot more than MBOs without money behind them. Those MBOs are set quarterly, paid quarterly based on results aligned with corporate objectives. Our process is very quick. We have that done within two weeks of every quarter.

We've lined up our objectives for the quarter to come. It's typically a small number of objectives that have a high degree of control of the individual but are still strategic in nature; a small number of objectives - 4 sometimes 5 but no more than 5 - so that they are not just small activities but more significant efforts for the quarter - and that when you aggregate them, they are all supportive of corporate initiatives.

Like I said, almost all of my team are on a structure where they are actually paid objectives. Again, I find that tremendously helpful and at focusing.

We've also done, and had lots of debate on, well how do you tie product management in an industrial marketing context to the results of the business. Do you tie them to revenue. Well, if you do so, you've really created another flavor of sales. That means people that are working on established products have an advantage because their products have in quarter pipeline. Disadvantage is people are working on the future of new products.

What we've settled on, is pipeline per product. We need all of our products to be generating future revenue. The pipeline includes a current quarter and future quarters. Working with Siebel on demand which is our sales force automation tool, I'm able to provide a monthly view of every product of the actual pipeline that's being worked by sales.

We also thought about, do we do more of a top down market sizing approach or do we base it on the pipeline the sales is working. We chose to focus on the pipeline the sales is working because it's real and if there are companies or prospects that are not in the pipeline, my team will have visibility and can fight for them to be there.

This pipeline per product approach focuses each product manager on the future while tying the business results; it combines those two. It may not be perfect but it has certainly been a good focusing element. It helps my team know what they have to focus on.

Every quarter they have an objective. One of their standard objectives is to increase the pipeline per product by a certain amount, and that's one of the paid objectives they have.

Finally, there's release completeness. This is aligned with engineering. There are a number of items that fall underneath this but as you come out with a new product release, there are a number of things that have to be delivered and delivered with quality from product management to compliment the actual engineering deliverable.

This focuses each PM on ensuring that the requirements are thorough and are met and timed with the release. That includes sales enablement, training enablement, and other packaging and documentation tasks that either need to be done by product management or certainly monitored and tracked by product management.

What are the tradeoffs of an organization like this. Some of the benefits of this structure - is tremendous credibility in an enterprise industrial marketing complex with customers. As I go back to my Nortel days when I was in a marketing function but it was more of a sales comp hybrid field marketing sales role, when I was going into a touch customer situation, I would get the product line manager not the product marketing person because I wanted the person that understood the product.

I would choose product line management people who were articulate so that was a little tough in a structure like Nortel where it was split along inbound and outbound.

However, that experience really stuck in my mind, that I realized with customers, you want highly credible, articulate people in front of them in tough situations. As I took on the role of SupportSoft, I thought about structuring the team in a traditional product marketing/product managing split, but it meant to me that I've only got a limited number of resources, initially, and half of them may not be as valuable in front of customers - won't be used by sales - it won't be as efficient.

That ability to have credibility with customers means you can have really rich conversations around the roadmap, around product capabilities and keep customers pointed in the right direction. For example, if a product management person is in a meeting and a customer is talking about something they'd like, that product manager will be able to say ah, that's actually in the product and perhaps you didn't realize that; I can help make you aware of it.

It also means there's a very tight coupling between customer interaction and product requirements. Since the people who are owning and driving the roadmap and fighting for engineering resources are the exact same people that are talking to the customer, there's no telephone game risk here where you'll have a product evangelist who doesn't own the roadmap talking to a bunch of customers, tying that feedback and distilling it and then having to fight for that internally with the product manager.

On the flip side, if an inbound product manager rarely interfaces with customers directly, they may not understand or empathize with the need for a particular feature, requirement or product driver. That leads to no communication gaps between product management and product marketing.

Clearly, that's a solvable problem in that you would bring product managers along with product marketing periodically to help correlate and make sure they understand the customers but again that leads to the fourth bullet which is an efficient staffing model.

For the scale of company that SupportSoft is right now, the splitting of product management, product marketing, would definitely increase our staffing and I'm not sure it would do so and make us any more efficient - in fact I think it would probably make us less efficient.

I do believe though, and this comes into the cost, where to scale, you do need to specialize in the solutions marketing, strategics marketing and field marketing.

Some of the talent - and I use the image of a rubber band here because this has worked well, as described to others in my piers in SupportSoft, that one of the challenges of having a combined product management, product marketing organization, is that there is a constant series of tradeoffs and prioritization occurring.

You're being stretched between sales, engineering and corporate marketing and executives and investor relations, and - I tell my team you're kind of standing in the middle of these rubber bands connected to all these other executives, and if you stay close to engineering too long, either the rubber band of the sale is going to snap or you're going to get pulled back pretty hard.

So we have to prioritize and balance our activities between these groups. On the positive side, that means my team prioritizes because they are stretched in so many directions, they truly focus on what has the highest impact. It means there isn't just work being done for the sake of doing it; that there is always a priority and a driver behind it.

It certainly makes hiring more difficult because I need to find people that are articulate because they are outbound, and detail oriented because they are inbound and that's a tough combination to find.

I will tell you it's a very powerful combination when you find it. I'll throw a little advertisement in here - I am in the process of hiring multiple product managers right now so if you're interested please feel free to visit support.com but I'll set that aside now and indicate this means it does make hiring more difficult but I have been able to find the people I need, and do have a model of what these people need to look like.

There is a risk here that both sales and engineering can perceive they are being under-served and I'd say that ebbs and flows. As we get closer to the major release of a new product that will understandably pull the product manager closer to engineering to make sure that is done, or if you're in the requirement cycle up front where you are defining and locking down requirements, that will also pull them closer to engineering, and sales will be a little less served during that period.

On the flip side, if there's a big RFP going that requires product management heavy involvement, it can be pull product management away from engineering, or if there's a major trade show or event. So that's a juggling act and it requires a lot of diplomacy and visibility into the tradeoffs that are being made because the plus side, that credibility in front of customers, is so powerful, that it offsets this third bullet on this chart.

So to conclude, the merge product management and marketing function can be very effective and efficient, and having worked in very large company, Nortel Networks, where it was highly segmented into different functions, it meant that the product marketing people - talented, great at producing collateral but weren't intimate with the products, and on the flip side, product line management; fantastic detail oriented people that weren't as necessarily close to customers.

There's an inevitable tradeoff there. Portal Software, recently picked up by Oracle; we had a separate industry marketing group that played a very important role growing into new markets, and as a result was very capable there although didn't control the product roadmap which meant there was a negotiation necessary internally to translate what the customer needed into what was driven by product management.

So it can be very efficient and effective to break through those boundaries. They prioritize and act. It's really forced between balancing sales and engineering. There are other constituents but sales and engineering are by far the biggest ones.

I do believe inevitably there will be a split of functions as organizations grow, and likely the first step is to split out industry or solutions marketing, and perhaps for very, very large organizations, field marketing, although I must say from my own experience, that's perhaps the stuff that is least attractive since it can result in a fragmentation of the messaging.

I just wanted to share a few thoughts in the first 15-20 minutes of this session. I hope that was helpful.

Thank you very much for letting me attend, and if anyone found what I described as exciting, I've got open req's to fill so feel free to visit SupportSoft and apply.