Peter Franks, partner at Neon River, an executive search firm specialising in the technology sector, explores the role of CPO.
It’s difficult to overstate the demand for product leaders within European technology companies over the last few years.
Within my own tech headhunting career, product management leadership roles have gone from being a rare request to one of the most frequent searches we are asked to undertake.
What happened? Why did product management rise to prominence so quickly, and what are technology companies looking for when making such a hire?
Blurring Lines
Let’s take a step back and see how things used to be before this quiet revolution. Technology companies still needed to differentiate, successfully commercialise and build effective, user-friendly products. The big difference is in how they used to approach solving this problem.
Defining key product features and functionality would often be regarded as the domain of commercial leaders who sometimes had little understanding of the practicalities of building technology products. Grand plans were created, and then often delayed or scotched as unforeseen implementation problems occurred. The idea of “strategists” (commercial people) focusing purely on strategy, and “technology builders” (architects and software engineers) focusing purely on writing software seemed increasingly obsolete.
Companies started to realise that effective product strategy required not just thinking about the market and customers – but also understanding how technology is built. Product strategy wasn’t just about strategy, but software engineering too.
Furthermore, companies started to think that the engineers themselves shouldn’t just be there to execute someone else’s product vision – as experienced builders of technology products they should also have a lot of influence over the future direction of the product.
Customers also needed more input. Building elaborate and expensive new products without having tested their popularity seemed unnecessarily risky, and unlikely to lead to a great user experience. Instead, better to release a minimum viable product (MVP), and take an iterative approach. Through testing and learning, products could be developed in line with real customer behaviour and needs.
The lines were blurring between strategists and executors within technology businesses.
Differentiation
For internet companies, differentiation has always been a key challenge. In certain categories like online retail, travel and gambling, internet companies often sell products that are very similar or identical. Two rival online travel agents may sell the same flight at a similar price, or two online casinos might offer European Roulette to their customers.
Differentiation in this context is typically not about core intellectual property that cannot be replicated, but rather the creation of user experiences that delight customers and encourage them to use you rather than the competition. Some companies understood this very quickly. Booking.com rose from being a relatively unknown online travel business bought by Priceline for $133m in 2005 to becoming one of the largest and most successful online travel companies in the world through creating a strong user experience as well as highly effective search engine marketing. Amazon’s huge success has been in no small part down to their creation of a strong user experience – not just in terms of their online and mobile products but also the reliability and speed of their delivery services. Where the products sold may be similar – strong product management is absolutely key as a differentiator.
Finding a chief product officer
Whether the title was chief product officer, VP product or something else – many growing technology companies saw the need to hire a strong product leader and develop the product management function within their own business.
Because of the sudden rise in demand for the function, there was a clear imbalance from a supply perspective. This problem was even more acute in Europe.
Whilst finding candidates with strong engineering skills was far from trivial (they are also in huge demand), hiring a product leader who had a lot of experience of driving product strategy in Europe was tough. Many of the largest technology businesses were US companies, with virtually all their engineering and strategic product management personnel were based in or close to the headquarters in the US. As a result, European product leaders often focused on implementing or localising strategies developed elsewhere, and hadn’t always had an opportunity to take broader responsibility.
Tech businesses headquartered in Europe often lacked mature product management functions, and consequently there weren’t easy pickings to be had from local rivals. Headhunters started looking to the US for talent and seeing if they could relocate candidates to Europe.
This imbalance has also created opportunities. Engineers can now much more easily move into product management roles and gain influence. Companies are increasingly looking to develop talent from within. The chief product officer role seems overwhelmingly likely to continue to be a key asset for most growing technology companies.