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Here is a translation of the article Product managers for the digital world where McKinsey partners and consultants analyze trends and developments in the Product Manager profession, the different profiles as well as the changes taking place in companies.

At the crossroads of the worlds: between digital and Product-ownership

The role of the Product Manager is expanding due to the growing importance of data in decision-making, customer and design focus, and changing software development methodologies.

Product Managers represent the cement that binds the many functions that affect a product: engineering, design, customer success, sales, marketing, operations, finance, legal, etc. They not only have the decision-making power over what gets built, but also influence every aspect of construction through to launch.
Unlike the Product Managers of the past, who focused primarily on execution and were measured by the on-time delivery of engineering projects, today's Product Manager is increasingly the CEO. at the product level. They wear many hats, use a vast knowledge base to make trade-off decisions, and bring together cross-functional teams, ensuring alignment across various functions. Additionally, product management is becoming the new training ground for future tech leaders.
Knowing that more and more companies outside the technology sector are giving themselves the means to succeed in the digital age, it is essential that they obtain the right profile in product management.

A good Product Manager thinks and acts like a CEO

The emergence of the Product Manager “CEO of the product” is driven by changes in technology, development methodologies, and new consumer buying habits. Taken together, these elements make the case for a fulfilled Product Manager who is more outward-looking and spends less time overseeing day-to-day technical execution, while demanding respect and engineering quality.

Data rules

Companies today possess a wealth of internal and external data and use it to make all decisions regarding their products. It's natural that Product Managers, who are closest to the data, play a larger role. Product success can be measured across a broader set of metrics (engagement, retention, conversion, etc.) at a more granular level. Product Managers can have a widespread influence on these metrics.

Products are constructed differently

Product Managers now operate at two speeds.
They schedule daily or weekly feature releases. They create the product roadmap for the next 6 to 24 months. Product Managers spend much less time writing lengthy specs; instead, they should work closely with different teams to gather feedback and iterate frequently.

Products and their ecosystems are becoming more complex

While SaaS products are becoming simpler for customers, with modular features rather than a single monolithic version, they are becoming increasingly complex for product managers. Product managers must now manage multiple bundles, pricing, dynamic pricing, upselling, and pricing strategy. Lifecycles are also becoming more complex, with expectations for new features, frequent enhancements, and post-purchase upgrades. The value of the surrounding ecosystem is growing simultaneously.

Modern products are now just one element in an ecosystem of related services and businesses.

This has led to a transfer of responsibilities from Business Development and Marketing to Product Managers. The new responsibilities of Product Managers include managing APIs as a product, identifying and managing key partnerships, managing the developer ecosystem, and more.

Changes in the “execution pod”

In addition to developers and testers, product development teams include operations, analytics, design, and product marketers (or growth hackers) that work closely together in “execution modules” to speed up and improve the quality of development. In many software organizations, the model DevOps breaks down organizational silos and enables Product Managers to gain broader cross-functional insights and arrive at robust product solutions more efficiently.

The consumerization of IT and the important role of design

While consumer-grade, user-friendly software is part of everyday life, business users also expect a better experience from enterprise software. The modern Product Manager needs to know the customer intimately . This means being obsessed with usage metrics and developing empathy for customers through online channels, one-on-one interviews, and observation exercises to see, listen to, and learn how people actually use and experience the products.

Three archetypes of the Product Manager “CEO of the product”

There are three common profiles of the product CEO archetype:

• Technologists
• Generalists
• Business oriented

These three profiles represent the main ones, but not only. These Product Managers like any CEO work in multiple areas (for example, a Technological Product Manager is expected to be knowledgeable about key business metrics). Most tech companies today have a mix of technologists and generalists (see illustration below).

The Product CEO is the dominant archetype of Product Managers in Silicon Valley

Source: Interviews with Product Managers at leading technology companies; McKinsey analysis
As these three archetypes emerge, the project manager is a fading archetype seen primarily in traditional product companies. The day-to-day technical execution role is now typically performed by an engineering manager, program manager, or scrum master. This allows for greater leverage.

Today, a Product Manager works with 8 to 12 engineers, compared to a Product Manager who worked with 4 or 5 engineers, in the past.

Common themes among the 3 archetypes

The intense focus on the customer is emphasized in all Product Managers. For example, Product Managers at Amazon must write press releases from the customer's perspective to crystallize what they think customers will think of a product, even before the product is developed. This press release then serves as an approval mechanism.
There are, however, differences in how Product Managers connect with users. While a technologist might spend time at industry conferences chatting with other developers or reading Hacker News, the generalist will typically spend their time interviewing customers, talking to the sales team, or reviewing usage metrics.

A new training course for CEOs

Modern Product Managers increasingly fill the CEO pipeline for tech companies. Before becoming CEOs of Google, Microsoft and Yahoo, Sundar Pichai, Satya Nadella and Marissa Mayer were Product Managers and learned how to influence and lead teams to deliver products from planning to development to launch… This Experience is also valuable beyond technology: Indra Nooyi, CEO of PepsiCo, began his career in product management positions at Johnson & Johnson and Mettur Beardsell, a textile company.
While this type of background remains rare among CEOs, rotating product management programs are the new leadership development programs for many technology companies (for example:

• Facebook Rotational Product Manager
• Google Associate Product Manager
• Dropbox Rotate

Any criticism of the analogy between Product Managers and CEOs will indicate that Product Managers lack direct profit and loss responsibilities and direct reporting. It is therefore important for Product Managers with ambition to move into general management in order to broaden their experience.

The Product Manager of the future

Over the next three to five years, we see product management continue to evolve towards data (without losing empathy for users) and greater influence over non-product decisions.
The Product Managers of the future will be analytics gurus and less dependent on analysts for basic questions. They will be able to quickly create a Hadoop cluster on Amazon Web Services, extract usage data, analyze it and draw conclusions. They will be followers of machine learning concepts and tools specially designed for improve the Product Manager's decision-making.

We anticipate that most modern Product Managers will spend at least 30% of their time on external activities, such as interacting with customers and the partner ecosystem.

Such engagement will not be limited to consumer products – as the consumerization of IT continues, B2B Product Managers will communicate directly with end users rather than extracting feedback through multiple layers of sales people. and intermediaries.
Similarly, the background of future Product Managers will evolve to match this new role. A base in computer science will remain essential and will be supplemented by experience and design courses. Product Managers will know how to create mockups and leverage frameworks and APIs to quickly prototype a product or feature. Product Managers typically start their careers as engineers or as part of a rotation program. After three or four years, they can obtain an Executive MBA or a full-time MBA with a specialization in product management, which is becoming an area of ​​focus in several top MBA programs, and which we hope will will become more prevalent.
A key aspect of the profile of a future Product Manager will be the frequent transitions between products and even companies. A Product Manager at a large B2B technology company told us:

“To succeed in our business, it is essential that you constantly learn not only new technologies, but also new business models. Therefore, we are hiring a lot of people laterally from Google, Amazon and VMware and encouraging our Product Managers to rotate between products.”

Redefine your role in product management

We recommend that companies assess their current product management skills in 6 areas: anchoring in the customer experience, market orientation, business acumen, technical skills, interpersonal skills, and the presence of organizational facilitators. Companies typically focus on being the best in 1-3 areas and hitting the bar across the board (see Figure 2 below).
 

Product Manager maturity can be assessed in 6 areas

Once a company has established its product management foundations, it typically follows two parallel paths: recruiting new talent in strategic areas and investing in an extensive upskilling program for existing talent. For the latter, a field and forum approach has proven to be the best solution, where Product Managers work on real projects with regular coaching and feedback.
Software development should be a strategic priority for all businesses in today's digital age. Product Managers play a crucial role, serving as a link between software engineering teams and all other parts of the organization. Distinct archetypes have emerged in large tech companies that can lead the way for organizations embarking on creating new digital potentials.”

Source

Product managers for the digital world , Chandra Gnanasambandam, Martin Harrysson, Shivam Srivastava and Yun Wu.

Context & Translation: Sarah Mavro, Product Owner @UX Republic @MavroSarah