Major banks use product management because it has proven to be an excellent way to manage a multiproduct business in a highly competitive environment. On both the wholesale and retail sides of banking, it has enabled institutions to respond to the challenges posed by the increase in the number of products over the years, the increasing complexity of products, and the impact of the major changes occurring in the financial services marketplace.

What is frequently misunderstood is that product management can also be highly effective in accelerating the development of people with business management skills.

By way of background, product management was adopted because it has been recognized that in today's complex and competitive market it is simply not feasible for business-unit management to give sufficient attention to each product and/or product category. Product management also enables the bank to manage each product as a separate business, within the context of business-unit strategy. On each product line there are people dedicated full-time to understanding the market and the customer.


It is easy to see, in a general sense, why a person who is given this kind of responsibility can develop rapidly as a business manager.Here are some more specific reasons why a product management function that is well managed develops effective managers:

  • The simple fact of delegating broad product management responsibility involves the manager in all aspects of the business, as opposed to focusing narrowly on a given functional task.
  • Responsibility for achieving business results is clearly assigned. Like senior management, the product manager has to learn to do "whatever it takes" to get the needed business results.
  • Placing business management responsibility on the product manager stimulates him or her to be entrepreneurial and continually on the lookout for ways to build business. It also stimulates the leader to be continually on the alert to identify problems that may interfere with the successful development of the business, and to propose ways to resolve these problems.
  • "Product management discipline" is a way of approaching the business that ensures that it is tightly managed.

The key elements of product management discipline are:Heavy focus on getting the facts on the business and on the market.

Analyzing the facts to determine what they are telling us about the state of the business.

Developing strategies to move the business ahead, based on analysis of the facts.

Staying on top of the business.

Knowing at all times what is happening to the business, why it is happening, and what needs to be done to solve problems and capitalize on opportunities.

Knowing how to make an effective case for a given course of action

Keeping strong focus on the market and the consumer.

It should be noted that in most instances the product manager gets this type of exposure relatively early in his or her career. This gets the individual well down the track in learning how to be a business manager sooner than would have been the case in a functional position.


A strong product management function can assist in attracting management talent to a bank. Applicants are quick to see that a well-run product management organization offers great opportunity for personal development and for learning the business.Also, a well-managed product management function gives senior management a good opportunity to identify talent early in the game.

If a person does well as a product manager and has some exposure to the business unit manager, it will be relatively easy for the business unit manager and first line manager to get a reading on the person's long-term development potential.

It has certainly been established in the packaged goods business that product management develops senior management. At Procter & Gamble Co., for example, the last seven presidents have been former brand (product) managers, and there are similar patterns in at other major consumer goods companies.

That business is clearly different from banking, in part because of the branding of individual products and the fact that each product line stands on its own feet.

However, bank marketing involves many of the same thought processes - for example, understanding the market and the customer, developing products to meet customers needs; developing marketing strategies and plans to get the customer to buy; "positioning" the product; and staying on top of the business.


Our observations over the years indicate that for people to develop effectively in a product management organization, there must be strong support for the product management approach at the senior management level. Strong support means that the product manager is well trained and has the tools to do the job (in terms of business/market data and marketing resources) as well as senior-level support for getting things done in the organization. The primary reason for senior management to support the development of a strong product management function is the need to manage a large number of products in a highly competitive, rapidly changing business environment.However, the people-development aspects of product management should not be overlooked. Mr. Wichman is head of William Wichman Associates Inc., a Cincinnati consulting firm that specializes in product management for banking and insurance companies.

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