Product Management is Key to Digital Business Success (ep31)
Nemanja: This is Chair, a place where we discuss innovations. After 30 episodes, we proved that innovations are so important today for individuals and companies as well. But there is another part of the story: who is running those innovations in the companies and on this subject, on the subject of the role of product managers. We are going to talk today with Predrag Popović, who is the Group Product Director at ASSECO Southeast Europe. Predrag Welcome to Chair, a pleasure to have you here today.
Predrag: Thank you for the invite.
Nemanja: I want to start this talk with you. Can you explain to me what the role of product managers is, what do they actually do?
Predrag: In a few words, the product managers are in charge of everything, which is connected with the product, with the product development. So in a few words, everything. But if we want to have some more, let’s say a formal definition of what product managers are doing, they are in charge of the entire lifecycle of the product. So management of the entire life cycle. What does this mean? It means actually, that, from the moment when we start with the idea about some product, till the moment when we retire some product or announce the end of the sales or the end of life or the product, they are managing the entire lifecycle. It usually starts with some discovery phase. When the idea is born, then we have some definition phase planning phase development phase, and as the last phase at the end of the journey comes this retirement phase when we decide to take out the product from the market. Let’s say, going a bit deeper than this. Some of the key activities that they are working on are market analysis, market research, analysis of the competition analysis of the competitor products, analysis of what customers are asking for, what are the customers’ needs. And these are the key activities that they perform. And of course, basically based on this, what they get as the information. They’re creating product visions and product roadmaps. Of course, besides these key activities, they’re also covering a lot of other activities. And they are working with a lot of other roles and people in the company. So they’re working jointly and closely with the sales and marketing people, defining, let’s say, go-to-market strategies defining the pricing, the licensing models, and doing the market research is all together and similar. They’re also working closely with the delivery people. So the guys who are in charge of deployment or delivery of the product on the customer side. It’s very important.
One thing is to sell the product. The other thing is to deliver the product in an optimal way to our customers. So the diversity, their activities are pretty much complex, and different activities are part of their job.
What is also important to be said here is that when we are talking about the product managers, sometimes we are calling this function, different names. Sometimes you’re talking about the product managers, sometimes you’re talking about service managers, sometimes you’re talking about product marketers, sometimes we’re talking about experienced managers, sometimes we are talking about business analysts. So we can call them in many different ways. All these roles are pretty much similar or if you want, the same. And all these roles are critical for companies, tech companies that want to produce tech products and to invest in their IP.
N: So based on everything that you said to me, they’re very important people in the organization right now for this. When we talk about innovations, because they are like in the middle, they’re a bridge between all the other teams. How hard is it to find a good product manager?
P: It’s not easy. The market is constantly growing. The demand for this kind of role, these kinds of people is rising. I would say every month. In the last two years, some statistics are showing that demand for the product managers is 30% bigger than it was two years ago, and constantly growing. So it’s not easy to find people who are capable of dealing with all the subjects that I mentioned. To be able to connect the business, the IT, the user experience and to build, let’s say, the product.
N: Maybe we can go deeper into their role. Based on your experience and your role, that you’re basically leading the team of those people, what are the challenges that they’re facing, what are the biggest obstacles that they need to overcome in their day to day work?
P: From one side they need to ensure that they are maximizing the benefits for the customers. They need to ensure agility, they need to ensure innovation. And of course, they need to ensure the profitability of their products.
N: As the bottom line, right?
P: This one counts, right. And then there is, let’s see the other side that they need to manage a very complex environment with many roles around them, and a lot of connections and dependencies. So this is actually the biggest challenge, they have to participate in all these processes, they will need to work closely with the sales, marketing, delivery, support, colleagues from finance departments and similar, so they have to put the effort into these activities as well. But they need to balance because they need to also do their own job, which is a product management job.
Balance is usually the answer for many things in life — and here, balance is the answer as well.
So they have to define priorities, they have to actually define what they are going to do, then to do things perfectly. And sometimes, what is a challenge there, and let me be a bit more plastic in explaining this. Sometimes, from the technical point of view, or operational point of view, some pre-sales activity might be the most important one, right? And then, okay, there is another customer, where we have an implementation project in place. So there are always some priorities, we have to always think that product managers cannot be in each step, we have to also keep them to do their primary job, which is product management and development of the product itself. They also want maybe an important thing, or the instrument that they have in their hands is also the empowerment of other people in the team to take part in their job.
N: Exactly.
P: This is one of the critical things. Sometimes, speaking about product management teams, usually, when we say, let’s give more power to the developer to decide about the product and about some product features and stuff like that. And for most people, that seems like a scary thought. Don’t go there, let’s not go in that direction. Now, developers are there to develop code, right? And product managers are here to decide about the product. It’s just the opposite. You know, we need all people who are working on the product to understand the product, to understand what they’re building, what kind of needs they’re satisfying for their customers, right? And what is also important, let me share my personal experience. When I came to ASSECO, it was like, three and a half years ago, we started one very complex banking project or product, a new product. Complex in the sense, okay, very, modern technology, stack architecture. So everything is perfect, microservice-based cloud-native, everything perfect, but the very complex business behind that. Very complex business calculations, business, banking business processes, and so on. And when we started talking with these young developers, the team was one very senior person who is Product Manager in the team, and plenty of very young guys who are developers, very talented. Yes, this is what I have to say. But really young now. So not much of the experience, you know. They were some engineers, QA engineers, you know, developers. And, actually, when they started, you know, they were feeling very good when they were coding something when they were changing the angular code, and then when they were doing some DevOps things behind. But they don’t even want to use banking words, you know, they don’t want to say credit importance, they don’t want to say exposure. They were using some other words, they were so scared about what they didn’t understand.
N: Because it’s probably a completely separate world…
P: Different feel for them, yeah! And now, three and a half years after we have those people that are becoming real experts for some domains. I guarantee that they can explain for some domains, why this calculation of the credit risk or no calculators should be like this and not like that in the banking business. And I do believe in this you know, everybody in the team has to be focused on this and have to understand the product. The old-time old fashioned way: I give you the specification, do it by the specification, is not here anymore. To be agile, and to understand your product is actually the key factor.
N: So based on what you said to me, the Product Manager here is an enabler for a team to grow and to learn about the product.
P: That’s right. That’s right. These product teams are really becoming teams lately. It’s usually in the past, we had the, for example, Product Manager and then we had some development teams. Now we are hiring teams in product management. So we have a product manager, who is mostly initially focused on the markets, externally focused. Then we have a product owner, who is, again, pretty much focused externally as the rest of the team, they have to understand the demand and what they’re satisfying, but mostly more focused on tactical stuff and how the development process works. Then we have also new roles, like the ProdOps role, of course, in all fashion. So the guys who are in charge of the operations and collaboration on the product development. Of course, I don’t have that kind of a role for all my teams. I see it as just a fashion. We have this need, but I don’t call them ProdOps…
N: So you mentioned that project that you started three and a half years ago, and how it was interesting. Can you share with me some other ones that you can disclose that are interesting, that you are working on right now? Can you show some spark of innovation that you’re enhancing with the product managers?
P: Okay, let me share with you may be a couple of intro information, my role, in general, is portfolio management. So my primary job is to deal with the entire portfolio of our ASSECO products. And this is a huge portfolio. So let’s say making the right moves on the portfolio level, understanding whether we need to invest in some products, whether we need to build some new products, whether we need to acquire something.
Because we have some gap in the portfolio, maybe we will not be that fast to develop something, maybe it will be much smarter to acquire some company, and to have these capabilities on the portfolio level.
So this is my general, what I do, and what is my main role in this sector as a group product director on the group or the group level. So in general, I’m dealing with the portfolio level topics, but also, of course, with the projects and the products which are below. One of the projects or products, which I will mention now is our digital platform product, which is probably one of the most complex that we had in place. You know, one thing is when you’re building the product itself, completely another story when you’re building the platform. Your platform needs to satisfy all the needs of the product teams. And also, of course, all the needs of the end-users or your customers. So building the platform was something that we started back than three and a half years ago, and what we also accomplished, and still investing in that, why I mentioned the platform because all our digital products now we are building on the platform that is more than 10 Plus, let’s say, different products, which we are building in different industries. And the platform is a completely cloud-native platform, a completely agnostic platform, a cloud-agnostic platform. Can run on every, let’s say infrastructure, it is a pure and true microservice-based platform. So I’m hearing a lot of microservice definitions. But pure and true microservices structure.
N: It was hype for a while, everybody was saying that they’re doing microservice architecture, but…
P: What I usually see in place, and I have to be pretty direct here. I see distributed, let’s say, monoliths, modern microservices in practice. You know, when you tell me, I have a microservice platform. And when you take out these components, everything will fail. Okay, man, that’s not a microservice platform. So I’m talking about the real microservice and cloud-native platform on which we are building additional search results, everything that is the idea behind and on the platform, we are actually building our business components in microservices, as well.
N: You mentioned that you guys are developing something internally, but when you see the gap, you acquire some companies and lately, you’ve done some of this work here in the region. Can you share with me some story there? I’m going away a bit away from the product managers, but I’m going to go back to them. It is an interesting story for me to hear from you who is doing this job. What are the challenges of this?
P: Yes, when we analyze our portfolio, if we see that there is some gap, as I mentioned before, and we see that we should maybe speed up some, let’s say, a capability in our portfolio, we tend to also scan the markets and see what is there on the market. Can we acquire some of the companies? So we have two major pillars in ASSECO. One is organic growth. So we are investing in our existing product portfolio and the new products. And the second important pillar is actually this M&A or growth through the M&A process. So acquiring other companies. So we are sometimes acquiring good businesses because they’re good businesses. So there is not a lot of additional strategic value. So I’m not in charge of that part of the business. But we are also acquiring sometimes businesses, which are strategic for us. They are filling some gaps, some capability, which we didn’t have or…
N: Or something new emerging on the market.
P: That’s right, or something we had, but it was not sufficiently mature before. So one of the examples is that at some point in time, we understood that you will need a bit more capability in the machine learning and AI domains. And we started scanning the original markets, from Turkey, Croatia, Romania, Serbia, and all other markets in the region and selecting, pre-selecting a couple of companies. And in the end, last year, we acquired one of the companies from the local market, “Things Solver”. And that company became a part of our group. Now, we are actually spreading this knowledge and these capabilities across different products. So we have currently more than 10 different products that are becoming intelligent, using “Things Solver” modules as a base. So products coming from the sales, marketing part of the portfolio, but also from the security part of the portfolio with some anomaly detection models behind, and similar.
N: So I always like to add some personal touch to the episode and ask some rather personal questions, regarding your career and the things that you have done so far. Since you’re doing a lot of innovations in different areas, I’m sure that you need to take some risks. Can you share some of the biggest risks that you took into your career and how they turned out?
P: Yes, taking risks is my daily job. So I’m doing it every day. And, in general, the risks, which I manage right now are portfolio level risks. So whether our portfolio products will tomorrow be executed in a way how it is supposed to be executed. Of course, the risks are there, and there is also this ratio, famous ratio — return to risk ratio. So if you don’t take risks, your returns are not going to be that high. So definitely, we are taking risks, everybody has to take risks. Also, my background is in banking. If you are in the bank, and you don’t want to grant a loan to somebody you will not be there anymore, in that industry. So every granted loan has some sort of risk. What is important about risks is that they are calculated, they are managed, and that is what we are in general doing on the portfolio level. If you ask me about some more specific risks that we took, I would say that one of the projects we see is this digital platform project, where we actually build a platform from four different products that are going to build on top. It was an endeavour with a pretty big risk behind it. Why was there a risk associated with this? Because today, technologies are changing very fast. And it’s the fastest pace of change in technology that we have ever had. So every year, there is some new technology replacing some legacy ones. And you have to build the product or the platform, on top of which you will build different, other products. And at some point in time, you have to be ready to take out some technology and to put in some new technology instead.
N: Because it’s already outdated.
P: It’s already outdated and you have to be flexible. So one of the key things or the key risks, which we saw then, is how to be ready to acquire new technologies in some soft manner. That does not require that you change the software on the customer side, since it’s similar. So this was one of the biggest risks, the project was actually at the biggest risk, also due to this. And there is this, let’s say, fragile spectrum methodology. I’m not sure if you’re aware of this, some products are trying to avoid the changes, fragile products. So they’re trying to avoid it and just skip the change. I don’t want to change anything. Some products are resilient. So they’re trying to fight back the change. So they’re fighting back the changes. Some products are usually called agile products that are trying to adapt themselves towards the changes which are happening around them. And there are some things called anti-fragile products, that are trying to embrace the change, and to make the best out of it, and to actually embrace the change, improve. And this is what we are actually doing and what we actually managed to do on the portfolio, you cannot say: ”Tomorrow we’ll have new technology, so let’s forget about it, let’s use the legacy one instead”. Because new technology is not there by chance, it’s there, because new technology brings something new to us, to some new value, to our customers. And we want to actually embrace new technology, to change the legacy technology, and actually give back this new value to our products, which are built on top and to our end customers. So this was one of them, let’s say, the biggest risks that we had. And the outcome of it is that we have plenty of products built on this platform, that we are also changing technologies. Plenty of things sampled in the four, three and a half years that we are developing, some of them pretty, let’s say big. In the context of the technology behind all these DevOps practices, Docker containers, orchestration engines were changing throughout the time… those specific technologies. So there, we already, let’s say, had chances to test this. And testing is one of the biggest things and the most important things in product development. So do testings with the customers, with the markets, don’t believe that what you build is the best or you have the best idea. Test the ideas as well. So this was one of them, I would say the biggest risks that I took, actually, during my career in development.
N: You mentioned testing. And, interestingly, my opinion is that with testing, you can change the product itself. It’s not just validating, it’s that you can go and reverse engineer with the testing.
P: Yes, one of the biggest blind spots, I would say, that product managers might have is not to test their product. So one of the biggest problems is that they are detached from the market, detached from the customer. So we have 10 smart people sitting together, thinking: “Okay, my idea is the best, I fell in love with my idea, and I will implement my idea no matter what, and it will be the best at the end of the day”. So this usually does not end up like that. So what we need to do, and what we need to do very often is to test, to test the assumptions, to test the products, to engage the customer on the product to validate. As you said, when we start with some idea, small chances are we’ll end up with the same 100% same idea, in the end, it will be more like 80%. We need to pivot, if the test is showing that we are not doing something good, we might decide to pivot to change them.
If a test is showing that for one module, we have a problem, customers are not asking for it, we might decide to sink it. You know, and usually, the question is, but we have already invested 50% of the investment for this module, why not continue? You want to throw 100% of the investment or just 50? So sink it in time, fail fast, don’t drag these things throughout the time.
And test and pivot. This is the most important thing, also the result of business cases or articles talking about this. What is the difference between good software development companies, and the ones that are not that good? The ones that have figures on the first line in the P&L and the last line in the P&L, which are rather stable or declining even. I’m talking about, of course, revenue and the profits. So for the companies who are doing these things well. The usual conclusion is that they are more open towards — externally open — basing their product development on the market research and the direct communication with the customer. And also agility is a very important part of it. So, to be able to pivot, to change and to adjust. The companies which are declining or keeping the same figures throughout the time in their P&L. Usually, they are more orientated internally they’re discussing the smaller groups, they discuss it like in some closed environment, and they’re trying to get the feedback from this closed environment. And this is maybe the crucial and the most essential point for every product manager, you have to be external view oriented. You have to be market-oriented, and market-driven.
N: Basically bridging the team with the outside…
P: That’s right.
N: What is the future of product management, where are we going with this role and maybe we can talk a bit more about what is needed from the education sector, government sector to get more quality people in this domain?
P: For product management the future’s bright…
N: Because you need so many people!
P: I need so many people in my company, the list is big, but not only our company, not only ASSECO Southeastern Europe. There is a need, the constant need, in all the markets across the world. And as we said this demand is just becoming higher and higher. So, high-quality product managers will not have a problem finding a job today in any of these markets. So, the perspective of this job industry is really good. What is important for the product managers to understand is that they’re not any more product managers of what we usually call the core product, they are now product managers of the whole product. So, the core product was actually zeros and ones, and the code behind. They are product managers of the whole product, of the entire experience of their customers with their product. So, it involves also the process of selling, the process of supporting or maintaining the product. So all these processes now are part of their job, they have to understand and make customers happy about it. The other important thing is what we said about the teams, product manager is not a role, it’s not one person, it’s a team. And everybody in the team should share part of the responsibility and should be empowered by the product manager to take every time a bit more while deciding.
This is also very important for the speed and agility of the product development process. And one of, for sure, of the biggest, let’s say, trends that are also impacting the product management, it’s a trend that impacts and disrupts all the industries. It’s a general trend, but it’s also impacting a lot of product management practice.
Is this an AI trend right? So, we are talking more and more about data-driven product managers, we are talking more and more about AI lead product managers, what does this mean? Product Management is here to rely on data, there are simple examples you have to understand. Basically which functionalities your customers are using, which functionalities your customers are not using, to understand why they are not using it… Which functionalities your customers are using the wrong way. You assume that they will use it in one way, but you see in the journey that something is different, what they’re doing. Then going one step further, you have to understand, to analyze the processes. We started with product management, analyzing internal processes. Let’s take an example of a bank. You’re focused on how to optimize processes from the bank perspective, how to make them more efficient. Then shift, change towards the customer, towards end customers of the bank. So how to make this customer journey more efficient and more pleasant for the end customers. Now we have tools on top, we have AI tools, like process mining tools that are helping us with this. Process mining tools that analyze the processes, show which part of the processes are working in a proper manner, where we have these reciprocal activities that somebody’s sending back all the time, the task from one to another. Where we have the highly costly processes there. They’re also analyzing our processes from the perspective of the customer.
So how this customer journey looks like. Is it fragile? So, he stops at every point of time then continues or it is a one-stop-shop. So he comes, buys and finishes everything, which is what we actually want to achieve at the end of the day. So, all this is supported by these tools. Then going one step even further, we have models, which are helping us to define the best next action in the tool for the customer. So my application becomes a bit of a product manager itself, saying okay for you, as a customer and for similar ones. I’d advise you to do this as a next step. So now these steps are just going further and further for the software as a service. So, let me also share that data-driven product management is becoming even more important. So product managers have to understand what is the lifetime value of these customers, what is the term ratio of their customers and all these insights which they can take from this data. So, in general, currently today, product managers are asking these systems questions, systems are giving back the answers and based on this information, they are changing the product itself. In the future, the role of the machine versus the role of the human is becoming more important. Again, maybe product managers will be machines. But we don’t know. Currently, we cannot say where this is going to end. Nobody can predict this. But definitely, this role of data is becoming crucial for understanding your own product and actually building your product. Of course, this data is not only internal data, which you have to, even in this definition phase of the product life cycle, but you also have to plan to capture. These are also the external data coming from competition coming from other external sources. And all together it gives you insights, how to define licenses for a product. You can define them in one way, in another, you can define a license per user, per click, per call, whatever. How to define the best licensee for the products, all these things. And all these things are actually based on the data behind them.
N: Based on everything that you said to me, the role of Product Manager is changing very fast. AI is influencing that at a very high pace.
P: Yes, that’s right. That’s right. And they have to be also agile. And pivoting their mindset is, because we are pivoting the products, we have to pivot the mindset of the Product Manager. In the past, it was a role which was more towards this core product, towards: ”Let’s build something and hope for the best”. Now we are verifying things much faster. All these data are used for verifying if the product is going in a good direction. So we can have an impulse very fast. We implemented the first customer and we see that he never clicked or he’s using completely wrongly the functionalities which we put there. So all these trends are impacting and this role is changing very fast. And what is also important, is that some new skills have to be acquired throughout time. Mostly around this AI. And big data.
N: Predrag, thank you so much for this conversation I enjoyed today, and for you out there subscribe. Next Thursday, next innovation.
P: Thank you very much.
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