Upskilling Product Managers.

Let's focus on service management as much as we do on product management!

@theservdesgroup
 

Abstract

In this article, The Service Design Group, the premier customer experience and service design consultancy in the US, discusses the difference between traditional Product Management and Service Management and Innovation. It's time to focus on customer centricity, desired outcomes and service-based innovations!

 
 

Background

A recent McKinsey article referred to product managers as "mini-CEOs." Premise: Product Managers provide "glue that bind the many functions that touch a product – engineering, design, customer success, sales, marketing, operations, finance, legal and more." We agree Product Managers play a critical role; however, we also feel the title "Product Manager" narrowly constrains this critical role to legacy models of management and innovation. At The Service Design Group, we advocate that Product Managers need to upgrade and expand their skill set, gain new responsibility, and (perhaps) edit their job title.

Time for a change

"Product Manager" narrowly constrains this critical role to legacy models of management and innovation

What's wrong with Product Management? The word "product" gives a hint. The traditional Product Manager role serves only the product, which, in our opinion, contributes to a closed view of the market. Since primary functions of Product Management include managing innovation, uncovering market needs and bringing new solutions to market, the role must have a broader orientation than just products.

Product Management must take on a new market perspective – one that fosters new thinking, discovery and development that extends well beyond the firm's current product portfolio. If you have read our article "Wake Up! We Are a Service Based Economy" you will know that, as economies mature, GDP shifts from a product-base to service-based (as a % of GDP). Put differently, growth comes from services, not products!

To upskill the Product Manager role, we believe:

  • 1. Product Management should anchor activities with Voice of the Customer (VOC) programs.
  • 2. Product Managers should apply a "jobs-to-be-done" framework to new product development.
  • 3. Firms must invest equally or more in service development (compared to product development).
  • 4. The role of "Service Manager" should gain prominence.

There are many advantages in moving from a product orientation to a service orientation. Here are the three big advantages we see:

  • 1. Focus shifts from "product sales" to "customer experience and outcomes"
  • 2. Market views expand
  • 3. Customer knowledge becomes institutionalized

Focus shifts from "product sales" to "customer experience and outcomes"

Service Management requires an intimate knowledge of the customer's job-to-be-done

Traditional Product Managers clearly understand the products they create and sell. They know the next round of incremental features to add and the price points they can command (or, more often, concede). Service Management, on the other hand, requires an intimate knowledge of the customer's job-to-be-done. Service Management mandates that firms continually monitor the pulse of customers and live and die by success metrics shared by customers and the firm: utility, warranty and value.

By deeply understanding customer needs and business success metrics, the Service Manager focuses on adoption, utilization, renewal and explicit value creation (as opposed to constantly updating the 3 year product roadmap and recycled marketing programs). The Service Manager knows exactly which outcomes move their NPS needle and drive positive customer experiences, and their recommendations and plans to improve customer experience and service levels are backed by their firm. In fact, the firm invests as much or more in customer experience and service delivery systems as it does in R&D. And, the firm measures success not by the number of transactions (sales) but by repeat business, wallet share and customer value.

Market views expand

The firm invests in developing solutions

A company that focuses on creating outcomes that match customer needs (aka satisfying jobs-to-be-done) rather than incrementally adding the next feature, function or product will, out of necessity, take a broader, more sophisticated market view. This expanded market view provides more "protection" (it expands the competitive viewpoint) and "opportunity" (it unlocks additional growth opportunities).

For example, a Product Manager at a traditional Product Manufacturing firm places hyper-focus on developing the next widget (that incrementally adds product value). The Service Manager instead develops and launches a solution capable of optimizing customer performance (complete with associated guarantees, service level agreements and performance-based pricing). Or, in another example, a Service Manager at a manufacturing company might create a new service that optimizes recurring maintenance. This Service Manager realized the opportunity to expand wallet share not only with existing clients but also with new clients that own competitive products!

The customer outcomes and jobs-to-be-done aperture always provides a more encompassing market view than the constrained product lens. This expanded perspective frees the Service Manager and the firm to look beyond today's products and make more strategic choices. The firm invests in developing solutions that gets an entire job done for its customers. The firm builds competencies as a platform or an end-to-end experience provider. As a solution provider, the firm enjoys an expanded market position and leverages its experience-based business model to drive recurring business (something that is increasingly difficult with the "one-and-done" nature of a product-based business).

Customer knowledge becomes institutionalized

Customer centricity provides a framework for prioritizing decisions and investments

To create a holistic and recurring focus on customer success, the Service Manager must continually capture customer needs and outcomes. This requires the Service Manager to build competency in qualitative and quantitative research with a specific eye towards uncovering hidden opportunities for growth. Over time, this customer research competency becomes a valuable asset of the company – an asset that guides development, marketing, sales, contracts, negotiations and training activities for years to come.

Compared to the traditional Product Management task of creating and maintaining a feature/function roadmap, the Service Manager builds a common language and understanding of the market and innovation opportunities from a customer centric point of view. This customer centricity provides a framework for prioritizing decisions and investments in terms of "meeting customer needs (and why that's critical)" or "not meeting customer needs (and why that's ok!)."

As an added bonus, when it's time to add new talent and transition the Service Manager to a new position, the replacement steps confidently into the role knowing that useful and complete market and customer insights exist. The customer centric framework the Service Manager builds and maintains ensures institutional knowledge is not lost.

Calling all service managers!

At The Service Design Group, we know it's clear: operating as Service Managers rather than Product Managers produces a broader view of the market, a better understanding of the customer experience and improved institutional knowledge! If you haven't already, we urge you to begin upskilling your Product Managers. We look forward to collaborating with more and more Service Managers in the future! For more ideas on how to tackle service-based innovation, check out our article "Models for Service Based Innovation."

Read next: Models for service-based innovation
 

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