I have been asked multiple times by founders who hired a Chief Product Officer (CPO) and then ended up wondering often: What’s the value, after-all? Could we do without the role?
In today’s issue, we deep dive into:
Breakdown of key responsibilities of a CPO role that make it a winning role in the organisation
In order of importance, what is CPO most and least expected to do?
What CEOs/ Founders can do to empower and allow CPOs to become successful
For Product Managers in senior roles, this issue will also help you to know the skills you should work upon if you aim to be VP, Product / CPO in next 3-5 years.
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CPO Role break down
The first mistake that founders and CEOs do is that they assume they know the strategy and just need a person to execute on it and start looking out for a CPO/VP of Product. This sort of expectation may lead to best of the product leaders to either quit soon enough, or become process executors.
(Below four responsibilities are not in order of priority. See next section)
The first responsibility of a CPO is to: Drive product strategy and its execution in collaboration with rest of the organization.
The CPO role is the first responsible and accountable to come up with (in collaboration with PMs in the team) a compelling strategy that lays down at-least below 4 aspects:
Who are the Customers
Which market are we in
What would it take to win in that market for the targeted customers?
How to differentiate with our offerings
How to build products that customers love
In order to lay down above, the CPO would also sometimes engage in Product Vision exercise. However, in some organizations we also see CPOs utilizing the company vision if it is already product-drive in its tone.
In order to fulfill the first responsibility as a CPO, he/she has to tackle the difficult task of aligning with rest of the leadership including the CEO on the market trade-offs, team capacity and prioritization with the aim of not dictating what it would be, but with the aim of getting a sign off on the direction.
The second role of a CPO is to be able to build a great product management culture in the organization.
Many aspects might come to mind when it comes to product building culture, but nothing is more important than hiring the right product managers who have seen the appropriate stage of product lifecycle. Example if your company is all about scale, you might look for product managers who have a growth mindset and have worked at that volume of impact.
Hiring is the first step. CPO is responsible to empower the product leaders in the company to be able to get things done - i.e to be able to help them with internal dynamics and politics that there might be. But also by ensuring they get right mentorship and training when needed.
Great product culture just doesn’t sit within the product management organization, it also needs to be represented well in the CXO pool or the leadership pool. CPOs play an important role in making sure there is a product-driven thinking across the functions of design, engineering , sales, marketing and more.
The third responsibility of the CPO role is to able to build a robust and effective product development process that works well with cross-functional complexities of the organization.
Product organization is expected to launch products, iterate and build market success with rest of the organization and hence the responsibility of setting up the right product development process that works well across the company is important and vital. This includes documentation, roadmap handling, managing inputs from outside the product organization and other trade-offs across the organization.
CPO might build these effective processes with the help of his/her product leaders and product managers and is able to build upon his/her strong relationship dynamics to influence quick and iterative product building culture.
The fourth responsibility of a CPO is to drive business success.
CPOs cannot be building product strategy and culture in isolation. He/she has to be well informed and aware of revenue and cost drivers at play. CPO is the right arm to the CEO especially in companies where product has been established as an important aspect of strategic execution. As much as the CEO, CPO is equally accountable for business metrics such as market share, profit margins, cost savings and more.
What is most important and least important for a CPO?
While one could say all four responsibilities are equally important, based on my experience and observations, I conclude that there is a certain order to above. In order of priority:
Business Success
Hiring and growing great product talent
Product Strategy
Roadmap and Execution
So, why do I say Business Success is the most important? I believe that the CPO role is an executive role that is equally important for business success as the CEO - hence the stakes are high, and the role is not easy.
If the business is in a cost-saving program, CPO cannot be living in its product strategy and growth mindset bubble if the company/business is at risk of survival. If the business is in profit margin enhancing program because existing products just suck at profitability, the CPO is expected to drive product programs that can do that. CPO readily understand the pulse of the business and manages product outcomes accordingly.
The second most important role of a CPO is hiring great product talent and then help nurture them to become stars. This is an incredibly difficult skill: to have an eye for great product talent and then being able to give them enough protein so they stay in the company.
One good hiring can 10x the impact of a product area, whereas a wrong hire in product leadership position can take down the entire company slowly and unnoticeably. I often talk about the fact that it is becoming easier to hire a product manager but getting more difficult to find the great ones.
Without going into the third in order i.e product strategy, I would like to jump to the least important (in order of priority, but probability must-have skill to have) is to be able to form a culture of execution in a company with predictable roadmaps - which means the plan is sticked to even when the plan maybe to continue to iterate when failure arrives. But there has to be a plan.
I call it least important for a CPO is because if the hiring and product management culture is done well - then the ability to form meaningful roadmaps and good execution can be left to the other product leaders in CPO’s team - it is a mix of trust and empowerment of the team below.
How can CEOs/Founders empower CPOs?
So going back to where I started. Sometimes founders and CEOs try to do product before hiring a product leader - they may be successful or not - but they tend to start believing they have good ideas and they need someone to just execute it.
But in essence, as soon as you hire a Product Leader at VP or CPO level, you need to delegate the product strategy and planning to him/her. A smart CPO would take that opportunity and would come back to you to get a buy-in. It's not blind faith in the CPO; rather, it's believing that he/she will do a good job at it and also take into account cross-functional views including yours to turn a good outcome.
Secondly, if the CPO is coming up with new transformation activities and processes in your company, you need to back him/her up. This could mean they want to change how product is built, how product organization evolves, how product is viewed in the organization and more. This may cause conflict in executives and other leadership positions since it involves a shift in power and balance - but the founder/CEO needs to back the CPO to be able to drive these changes.
Lastly, you need to know that you have not hired a magician - things won’t change fast enough. It generally takes CPO few months to find the cracks and another few months to plan the changes. Building a strong relationship with the CPO opens avenues to understand what to expect and anticipate future developments.