Product management has been prevalent for 10 to 15 years in retail banking and cash management, and for a shorter time in other fee-based areas and private banking. But the function has not been performing at an optimum level, which raises concern in senior management.
The product manager is still having trouble developing an effective annual business plan. We are talking here about the capacity of the product manager to (1) analyze the state of the business, (2), based on this analysis, recommend objectives, strategies, and plans to move the business. ahead, and (3) make a cogent, compelling case for his or her recommendations.
The product manager (and the entire function) is still learning how to have meaningful dialogue with sales personnel on the state of the business and on key strategic issues. There is plenty of contact with sales on specific customer issues, operating problems, technical questions, etc., but limited dialogue on strategic matters.
In the fee-based service business, there may be a "duality," with product management moving in one direction and sales, perhaps, moving in a somewhat different direction. In the retail business, "duality" can develop because of lack of effective dialogue between product management and marketing staff and/or between product management and the branch system.
The product manager may not be doing a good job of keeping management informed on the state of the business and on key issues affecting, or likely to affect, the business.
Role Remains Unclear
The role of the product manager in the organization may still not yet be fully understood by all functions. The role of the product manager in product development and pricing and sales support is clearly understood, in most instances. However, the broader role of the product manager in the business may not really be recognized.
The product manager may not be fully "on top of the business" (i.e., knowing what is happening and why it is happening in all parts of the business at all times). The manager may not feel as responsible for achieving business results as he or she should feel.
In some instances, the product manager sees the figures, but does not act aggressively to fix problems or capitalize on opoortunities. Management has to take the lead, which is not the way the system is supposed to work.
Landscape Has Changed
It should be noted that product management today is markedly different than product management in the early 1980s, when there usually were not enough people, nor the right people, and often limited knowledge of how the product manager should operate.
Today, product management is established, and working reasonably well. There are more people - and stronger people - in organizations.
They have broader responsibilities and they are making a significant contribution to the business. However, as noted, there are still some areas where improvement is needed.
In the beginning, there was not only limited understanding of the concept at the senior management level but, at the operating level, first-line management did not have a clear vision of the role of the product manager. This, of course, had a negative impact on the training and development of the product manager.
While many of the historical problems related to the development of product management have been resolved, there is still plenty of work to be done in the training area.
It should be recognized that the product manager has great responsibility, but limited authority. Consequently, many factors must be right in the operational equation if the product manager is to contribute fully to the development of the business.
Today, training in some banks tends to be sporadic and fragmented, and does not give the product manager a perspective on the total job.
Training tends not to put enough emphasis on how the product manager works and interacts with the rest of the organization.
Effective Training
There is more to the training of a product manager than acquired knowledge of specific subjects. The effectively trained product manager must have an in-depth understanding of the concept, his or her role, and a real conviction about how he is expected to operate.
Effective training requires what might be termed a "total system" approach. Training cannot be dependent on periodic classroom instruction or seminars or other fragmented approaches. The following elements must be present:
* An emphasis on on-the-job training, with the product manager "learning by doing" in real-world situations.
* Training must be day-by-day, week-by-week, month-by-month. No one is going to learn product management with a continuous training effort by the direct supervisor.
The product manager cannot work or be trained successfully unless an appropriate operating process for product management is in place. The proper operating process has a great deal to do with training.
As an example, it is obvious that the product manager will learn about the total business, the market, how to develop marketing strategy, etc., if he or she is required to do an annual business plan and to defend that plan before management.
Also, if the bank provides a product manager with pertinent business and market data and if the management expects the product manager to know a great deal about what the data is telling him about the state of the business, then the product manager is going to be effective in analyzing and understanding the business.
In the same vein, effective product management requires that, within reasonable limits, the product manager be able to have meaningful dialogue with his or her business. The senior manager who participates actively in this type of dialogue will contribute greatly to the development of the product management function and increase the contribution of the function.
The senior manager who does not have this kind of dialogue will impede the development of the function.
It is worth spending significant management time and resources on training. If the product management function is not weaknesses in the training area, the cost to the bank can be significant.
A Big Impact
The product management group can and should have a significant impact on the marketing effectiveness and profitability of the business unit. The product manager should lead in establishing strategic direction, developing products, pricing, and - importantly in the marketing area - providing appropriate support to sales.
On the latter, it can be argued that effective sales support and developing an effective dialogue between product management and sales and/or branches can have a major bearing on the effectiveness of the sales resource.
Mr. Wichman is president of William Wichman Associates, a banking and insurance consulting firm based in Cincinnati.
