Ep. #6, Product Manager as CEO

Craig: This week we want to talk about this idea that's been floated around for a little while, that the PM is the CEO of their area. I was actually at a wedding this past weekend, and it came up. The guy looking to get into product management, he's like, "Well, what do you think about this idea?" And, well, 45 minutes later, we kind of got to some conclusion about it.

But I thought it'd actually be fun to kind of come back to this topic. It's a thing that's often talked about. If you're not familiar with it, it actually comes from a really, really wonderful essay by Ben Horowitz that's about 15 years old now.

Rimas: I think it's a little bit more than that, but definitely before the dot-com bust.

Craig: And to be fair, if you actually go and find it on the Andreessen Horowitz blog now, he caveats and says, "This is really old; it may not be relevant for today." Yet, people still cite it as a pillar of product management. And just to read a little of it, there's some context here.

Starts off, "Good product managers know the market, the product, the product line and the competition extremely well and operate from a strong basis of knowledge and confidence. A good product manager is the CEO over the product." It goes on and goes into more of a "good product manager, bad product managers. Bad product managers have lots of excuses," etc.

There is a lot of really good insight in there. For that one piece right there, in that second sentence, "A good product manager is the CEO over the product." That's the thing I've heard a lot of times. And I think there's a lot of strong opinions about it. And we just thought it'd be fun to dissect that a little bit today.

Rimas: So, "product manager as CEO." Do you want to just start it off, right off the bat, and say "Do you agree with this? Yes or no?"

Craig: "Yes or no," it's hard, right?

Rimas: It depends, it depends.

Craig: Our favorite phrase, there. I can see a lot of where he's coming from, right?

That idea of 'You don't make excuses, the buck stops with me.' I fully support that idea.

There's a lot of analogies that are drawn throughout the rest of it. But as the PM, you should be responsible for your area, so I don't disagree with that at all.

Rimas: I'll agree with that. I think that it's one of these situations where you may not be the one building product. I mean, you're shepherding it, but if something should go wrong, you're basically on the hook for all the problems.

Craig: Yep. I mean, the CEO, you're responsible for the company's success or failure, right? If that doesn't happen, the buck stops with you. So, agreed on that front. But I think there's one interesting piece right off, that the PM has no responsibility. Or they have responsibility, no ability to actually enforce that responsibility over other people. So, no authority.

Rimas: So are you saying that they have no way to coerce individuals to do what they need to do?

Craig: You might be able to through pain. But not through any normal means, right? Which, as the CEO, you do have an ability to fire people.

Rimas: Sure, but I still think PMs have the ability to coerce teams to doing what they need to do. I mean, that's one level of power, isn't it?

Craig: So, where are some of those examples? How do PMs actually accomplish some of that?

Rimas: Well, actually, I like to talk about something a little bit different when it comes to "PM as CEO of product," and that is, how does the PM actually draw their power, in terms of owning that product area? Because I think there's a good social psychology study that was done back in the late '50s that kind of lends itself to this difference between product managers, CEO, and PM-as-not-CEO. I guess that's the characterizing we're with right now.

But the study by French and Raven, I implore all of the listeners to go check this out. It's on Wikipedia and there's a great summary of it. But basically, there's five sources of power when it comes to relationships with an organization: There's legitimate, meaning that the person has a position of authority. There's reference, meaning that you have some affiliation with the people that you're working with. There's expert power, meaning that you've got some technological knowledge about something that's important.

Craig: Which you may or may not have, right? That was one I think we've talked a little bit about before. If you come from that technology background, you have a little more authority. If you don't have that, it's harder. So, okay.

Rimas: For sure. And then the other two are coercive and rewards. Rewards, I think, is pretty self explanatory. You can get someone to do something if you give them the carrot in front of them, right? And that coercive one is the one I characterize more as like the Steve Jobs type, where you're going to try and get someone to do what you want no matter what. When I look at these five sources of power, I like to make the distinction that the CEO actually has legitimate, the PM does not.

Craig: Legitimate meaning?

Rimas: Meaning that you're in a position of authority; you can do what needs to be done, no matter what. You have the power to say, "Go do this." The PM does not have that power. But the other four, reference, expert, coercive and reward, the PM can pull all those off, along with the CEO, in any way as possible. I mean, the CEO has a little bit more power to do more expansive-type exercises with any level of power, but the PM can still pull off some of those ones.

Craig: So let's dissect a few of those, because I think some of those are probably pretty interesting, right?

Rimas: For sure.

Craig: So, what about reward? I actually don't have the ability to go and give you a nice bonus if you do a great job, usually. In some cases, there may be some exceptional cases where you can make that case, it can happen, or there's some slush fund. But how do you reward people as a PM?

Rimas: Well, you're assuming the money's the only thing that matters. Is it? I mean, for some individuals, that may be the only thing, right?

Craig: Sure.

Rimas: But there's other ways to reward individuals within the organization. And I think this comes up when we talk about PM as the selfless individual within the project team.

It's the team that's building the product, and they should be the ones getting all of the praise.

Because they're the ones that actually put it together, and that gives them some reward. Meaning that they've gotten some recognition, that, "Hey, I've done something. I've accomplished it, and here I am. I'm getting recognition within the organization."

Craig: I think that, essentially, that internal marketing for the team is huge, right? As the CEO you need to be a big cheerleader of the times. You need to corral the troops, get it going in the right direction, but then give that praise and make people feel like, hey, they really did a good job. As the PM, you can do a lot of that through internal marketing, right? A lot of people won't stand up and talk about the exciting things the team has done. It you do that, you're probably better than a lot of PMs. Or at least your team will think so.

Rimas: I love that word, "excitement." That's one of my favorite things to do in the organization. At least with the groups that I work with, I get super excited about everything that we're working on. And that actually is, how would you characterize that? I would say that it is--

Craig: The reason they don't hang out with you outside of work?

Rimas: Well, that might be part of it, but it's infectious. Everyone in the team gets worked up about it. And they feel a sense of affiliation, which is some of that referent power that we're talking about, where they feel part of a team that has actually accomplished something.

Craig: Yeah, and as part of the team, you hope you're all in it together. You're focused on actually building a business. You care about what you're working on. And if that's the case, then moving the business in the right way, seeing that happen and being thanked for it, praised for it and that showing off to the rest of the org, that usually helps quite a bit.

Rimas: For sure. So, let's go back to the expert power that we talked about a little bit before. We said that if you've come from a technology background, that might give you some authority over what's going on on the project team. But I always want to point out, that may not always be the case.

That, I think, largely depends on the type of organization that you're working with. Because there are different types of political rule within these organizations, if you try and pull that off in, let's say, a bureaucracy, for example, bureaucracy's very much about the rule of law: "This is how we do things. You have to follow a certain process," that kind of expert power actually might not work.

Craig: And I think it varies a little bit on the level of PM, too, right? Like, if you've got a more junior PM, you need a little bit more of that expert power because you don't have a track record to back it up with it. Whereas if you are more of a senior PM, you have a track record that kind of speaks for itself. You're also down on the details, right? You're more of a, what do we say, a strategy guy?

Rimas: Yeah.

Craig: You're not down in the weeds doing things. You're not as hands-on. You're still doing high-valued things, but it's a different level. So there's kind of a different level of expertise that needs to come with it. You need to bring expertise about the market, about the industry, where things are moving, competitors, etc.

Rimas: You mention the senior individuals. That's someone that can only get that kind of power by being with the organization for a while? Or can someone come in and just start off, right off the bat?

Craig: It depends. It depends on where you're coming from historically, right? Do you know about the space? Do you have a good track record? What's the organization like? Some organizations welcome new external expertise. Some people, it's very much in-house. Some organizations only promote from within, and you're expected to grow that way. So there's a lot of factors there, that you definitely can come in from the outside and contribute. But it depends on the organization, what the expertise is, and so forth.

Rimas: Yeah, this reminds me of a previous episode where we talked about hiring PMs.

It feels like trying to hire a PM is almost like trying to hire a CEO in some ways, because you're trying to balance all of these factors and sources of power that this person needs to pull from, to be able to be successful in this organization.

While a PM is, I think we're agreeing here, that they're not exactly CEO. But you have to almost treat it, that position, in hiring and such, to make sure that they can get done what is needed based upon whatever the executive roadmap may be for that company.

Craig: I think you hit on there that they need to have a lot of different skills and kind of be cross-disciplined. That's another thing, that the CEO is very common. I've only been CEO of a very small startup of my own. But the things I had to do that I really didn't want to around accounting or marketing or sometimes engineering, you basically have to span everything.

As you grow you still have people who have more expertise in those areas, but the buck stops with you and all of those things roll into you. So you've got to have some level of operating expertise across all of them. As a PM, it's very similar.

You need to know about marketing and product marketing, you need to interface with sales, you need to interface with engineering, you need to interface with customers, you need to market internally, market externally. So there's a lot of different hats you've got to wear. It varies based on the organization you have, of how much you do, which ones. But you do have to spread yourself across a number of different areas.

Rimas: Have you ever worked in an organization, or have you ever been that CEO that's used coercion to get to teams to do what you want? That's a loaded question, come on.

Craig: Given the teams I've worked with, I'm going to pass on the answer...

Rimas: Let's rephrase the question. Have you observed teams where PMs have been coercive? And compare that to, maybe, even an organization where you've been at where CEOs may have done that, or you've seen CEOs act like that. Give me some background.

Craig: I don't think I've ever seen a place where it created long-term success. In contrast, I've seen, actually, in a similar fashion, I've seen where monetary rewards were created as an alternative to coercion. "If you do this really hard thing, you'll get rewarded in this way." And it actually creates some long term damage.

So I don't know that either of them is healthy as a stopgap, which is where you usually find that kind of coercion, you find that kind of reward setup, right? It's meant for short-term gains instead of long-term gains.

Rimas: I mean, should I use the Steve Jobs example? I feel like that's the one that comes up all the time when I talk about CEOs and coercions. It's, "I am Steve, I do what I want, and you fall in line." Yet, everyone still followed Apple, and it is what it is today as a result. I mean, isn't that the counter-example to this?

Craig: I think if you have a really strong CEO, you have the ability to do that. If you have a really strong PM, they're not going to last very long just trying to do that, from what I've seen from experience. Because you don't have that legitimate power. With a CEO, if they're wrong, the company's gone.

And that is a different barrier that, we've gotta give a lot of respect to your CEO. You're there putting food on the table for a lot of people. A lot of people had invested a lot into a company when they joined. You're responsible for making that successful. So there is a separate kind of set of responsibility that truly comes along with that.

Rimas: For sure. Now I've got all these visions of all these people that are relying on a CEO to do a good job to make sure that the company stays solvent, because otherwise they're out of a job. But, in contrast, if you're a chief product officer at a fairly large company, you may have that same responsibility, wouldn't you?

If you are managing a product line of something that brings in a billion dollars, don't you have the same kind of legitimate power?

Craig: True, but I think you maybe have a few more chances. You've got other checks and balances in place, right? There's other people looking on the outside, and by that time, you've built up some experience of doing that. Hopefully you're not missing, over and over and over, otherwise, how'd you get into that role?

Rimas: I coerced peopled to get into that role. That's what I did.

Craig: Coming back to this idea of, "Can a CEO do it?" I think we had a really interesting example from our last episode where I remember being so data driven now. That was the way of overcoming that, right? So there are other ways to counterbalance that.

In product, you usually have to show up with hard data, which is another form of that expert power, right? If you show up with actual data, which you should be doing as PM, not being driven purely on intuition, in some ways you're being more thorough than maybe the other side of it.

Rimas: Somehow we've worked data back into every single episode, I love that. Okay, so data makes you an expert, possibly, right? I mean, we probably can have another episode just on "intuition versus data." I think we've kind of settled, maybe not totally, on it. You need to have both to some extent, and I think we touched on it in that same episode.

Craig: You missed one of them that you hit on earlier, that I think actually the PM might have some actual source of power that the CEO might not as easily.

Rimas: What's that?

Craig: Referent.

Rimas: Oh, the affiliation one. That's the one we have not yet talked about.

Craig: So this one, I think, is really interesting. That without that legitimate power, as a PM, right? Without that ability to come in to fire someone, to give them a raise, to say, "You have to listen to me, because I said to do this." You have to find other ways of getting things done.

We've hit on a lot of them. But I think one of them is bonding with your team, right? Having a shared sense of vision, value, you affiliate with that team and there's a sense of bonding there.

Rimas: Yeah, I think one of the things that I like to do as part of that is actually define a set of product principles for whatever it is that we're working on, whether it be at the project level or just for the group at large. Because those principles are what should guide us in terms of how we think about our customers, how we build that product.

So that at least creates some kind of, like you're saying, cohesion between all the individuals. That way, anytime we give a presentation in front of the organization, anytime we talk to customers, we always have the same themes that, "Hey, this is who we are and this is how we're going to deliver something."

Craig: How's that different from a company set of shared visions, though? Doesn't a company, most of the time, have something like that?

Rimas: If it's a good company, they should. I mean, they should have their mission statements, they should have their quarterly, yearly goals, or whatever it is that they use, OKRs, V2MOMs, whatever.

Salesforce loves to do the V2MOM thing, where that all cascades down through the organization, such that everyone has a shared set of values that go from Mark Benioff all the way down, right? And that's what kind of pulls the organization together. I think OKRs do accomplish somewhat the same task, but I think those great organizations have those processes in place to pull that together.

Craig: Now, do you just go and mirror the organization, then? Because, don't you just feel like it's part of the bigger organization? One thing I've seen that's very empowering is when a smaller team, smaller product area, feels really bonded together, right? And that happens at a smaller group rather than the bigger company.

They feel like they have a clear goal, they're all aligned, while they're tied to the bigger company. That creates some really powerful unity, and I've seen product teams make a lot more momentum that way, sometimes, than by differentiating from the larger org.

Rimas: There's a distinction I want to make here in that, yes, things may cascade down from exec levels down to the team's PMs, etc. Going through the motions is one thing. But you actually,

when you define these things, product principles, goals, values, whatever they may be for your group, you really have to live them and you have to espouse them on a daily basis and in the work that you do.

Because if you do not do those things, then you've just gone through the motions. And there's not going to be any team cohesion whatsoever.

Craig: What happens if you disagree there?

Rimas: Well, you shouldn't. Because as a team, you should be doing this together.

Craig: Now, if you disagree from the upper level, that cascades down, right?

Rimas: Well, then that's a larger issue, right? And this gets back to the types of power that are used from the levels above to you and your team. Because, depending on the type of organization that you're in, bureaucracy, the expert-type organization, which is the technocracy, where they lead by knowledge, etc., depending on how that organization is, will dictate whether or not you should believe it or not. If you're in a bureaucracy, you kind of just take whatever's above you and you say yes.

Craig: Sure, so then how do we get that affiliation, right?

Rimas: Well, the affiliation, it can be done many ways. And one of the things that I think of is drawing that shared vision. I mean, it's kind of like the values thing that we've just been talking about. But you can do that on a much smaller scale than you would like: "I'm going to define a five-year vision." You can define a vision for the next three months. You can define a vision for the next six months, and it could be rallied around a single project.

The important part that I think needs to be done is that you need to show value for your target audience as a PM. You do that as a CEO as well, but you're going to have to do it on a much smaller scale. It's just the difference in scale there.

Craig: Yeah, and I think you have a different opportunity, too, on the people side. As the CEO, when you're having a drink with an employee, or out to dinner at the company event, you're still the CEO.

As the PM, when you're at a company offsite, you can be one of the group much easier. So you can actually build some of those personal connections much easier.

One of my favorite things to do, actually, when I come in as a PM of a new team, is have them over to dinner. Back in the South, having people over for dinner happens all the time. Bay Area, not so much.

We tend to say, "Let's go out to the restaurant here." Having people over? Maybe it's because we have no square footage, because it's the Bay Area. The idea of packing a team of eight people around a table that seats three comfortably, you bond. And you have some affiliation there, right?

Now, this maybe on the personal basis, but some of that can help quite a bit. There's having people over for dinner, going out for drinks, for coffee. Offsites, I think, are a super important aspect to this. And if you're not having a regular offsite with just your team unit, that's the product and the engineering, then you're missing out on a huge opportunity.

This actually comes back to some of what you were talking about before, that shared vision, that roadmap, that alignment of where we're headed, what our goals are. That's a great opportunity to do that, at a team offsite.

Rimas: I just want to point out that I think that depends, again, on the type of organization that you're working with. For organizations that are much more collaborative, I think that makes way more sense. I think for organizations that are much more command-and-control, I think you can still do some of that. But you're going to run up against new processes in the organization that may, for a lack of a better word, hold you back from using something like referent power to get a team to do whatever it is that you need to do.

You may have to understand the team and use something else to get them to that shared vision. Maybe it be reward, maybe it's using your expert power, or something else. But, again, legitimate as a PM--

Craig: One of your favorite, actually coercing them.

Rimas: Well, it's not my favorite.

Craig: But yeah, so, it's not that you have to have that affiliation, that referent power, it's one option out of many. And it helps to have the toolbox of all of them, right?

Rimas: Of course, and these are things that, you build that toolbox over time. This is something that I don't think you're just innately born with. I think as you become more senior and, as you become a PM that has been on the street a little bit longer, you're able to build this toolbox and know the levers based on the team that you're working with and the organization that you're in, to be able to effectively manage your product area without having to use legitimate power.

Craig: So, we talked a little bit, kind of all over the place. I want to come back to one thing we hit on a little earlier about communication. The PM's a great cheerleader internally for the org, to talk about how their team's doing, to get the right recognition. But the CEO is very externally facing; that is the face of the company, usually. Sometimes it's the brand, but a lot of times it's actually the CEO of the company. Is there any parallel there for the PM, really?

Rimas: Well, isn't it all the stuff that you do all the time? Isn't it going, speaking at conferences, writing blog posts, doing all that kind of stuff, and referencing your team as part of it?

Craig: Maybe there's some of that. But, I mean, I'm wondering if we're missing some pieces there, right? Yes, there's maybe speaking at conferences, if you're a developer-focused company. That's a thing that, even if you're not an engineer, you can do as a PM, assuming you have some technical background. Or you can just pretend really, really, well.

Rimas: Just like me. Just kidding.

Craig: There's blog posts. Yeah, that's a public written... I mean, but what about this actually kind of public representation of the company?

Rimas: So, wait, are you saying that the PM would be an external representative of the organization? Or the face of something?

Craig: Yeah, I mean, how often does that happen? Or how often should it happen?

Rimas: I don't know that I have a data-driven perspective on this. I think my terse understanding of it would be the, I think of the Ken Nortons of the world, right? And I think of Google as a result. That's someone that is not the CEO, but I had tied up respect and say, oh, that's a PM that is outwardly facing.

Craig: Yeah, and I think there's a range for every PM to have some of that flexibility. And I think if you look at, even, things like analyst relationships, right? Analysts would--

Rimas: Ooh, that's a good one.

Craig: Who would first talk to the product manager, then the product marketing manager, then the actual head of marketing. They want to stay as far away from marketing, usually. They want to talk to, a lot of times, ideally, the engineers. Usually that doesn't happen too much. Usually they don't let analysts go directly to the engineers.

But product's a nice middle ground where you're actually getting 'how a sausage is made' pretty clearly from someone close to it.

Rimas: Yeah, exactly. I think that's a great place for a PM to flex their outwardly-facing muscle, if you will, where they can put together all of those three different areas, where you talk about business, you talk about user experience, and you can talk about engineering or technology, especially for software products.

Craig: Yeah, and if you're at a smaller company, 10 or 20, that's a great starting point. A lot of big launches can still be driven from the press side, by the CEO there. But once you're at a 50-, 100-person company, you actually start to take on some of those press responsibilities. It all depends on the size of the launch.

Rimas: But what about for those PMs that are at the fairly large organizations? I think about the 10,000-person-company type places.

Craig: Expect to talk to the press. Expect to be a public face. Not every PM will be, right? At a 10,000-person company, how many PMs do you have, 50? 100? 200?

Rimas: A lot, let's leave it there

Craig: At a large, 10,000-person company, you're going to have 50-100, but 100 people that are certified to speak on behalf of the company publicly. At that size, most likely publicly a traded company, maybe not. It's probably going to have a certification process, or how do you actually get this approval and stamp and say, "Okay, they can speak for us."

But there is that opportunity there. Now, you're not going to come in as a junior PM right out of school, or right over from engineering, and have that ability. But there are kind of the B-list, C-list, D-list media that you can gradually start interact with. And analyst is a great place to start.

Rimas: Analyst briefings were probably one of the things that, when I first started doing them, were incredibly intimidating. But over time, I think you're right, you kind of get a sense of how to talk to external parties, how to talk up what you're doing and make the team look great as a result.

Craig: You start to say things like, "How we see the market moving." and "industry trends," and that sort of thing.

Rimas: And you get to use all those great emotional words like "exciting" and "powerful."

Craig: Actually, in reality, analyst and press are a whole other area of product that is an important one, sometimes foreign, especially early on.

But it's one of those things that, as you grow, you start to have more of those responsibilities just like that CEO.

Rimas: Exactly. And I think, as we start sussing up this conversation in between what it means to CEO, what it means to be a PM, we're seeing a lot of parallels. And that one difference, again, is just that legitimate power. You've got that authority as a CEO to just do whatever you need to do to your organization.

Craig: So, where we at? Are we 90% CEO, 80%? It actually sounds like we started off on one side of, "No, they're very much not." And as we went through the list of items of, what is the CEO doing? What is the PM doing? What is their skill set? What is their knowledge? We seem to be fairly close.

Rimas: I was probably, say, about 80%. I think that there's a lot of stuff that the CEO has to do that is not within the wheelhouse for PMs, that, again, comes back to some of that stuff that you said about having to deal with things like the financials, accounting, HR. Those are things that aren't necessarily PM concerns.

But the CEO has to worry about that stuff as well. Granted, they have individuals that are hired that are required to manage those areas; PMs don't have that. And, in some ways, if your project team doesn't have a project manager, as a PM, you're pretty much it.

Craig: Yeah, I think that's an interesting one, is that in some cases a product manager may manage a P&L, but usually they're not truly managing the P&L, just like the CEO does for the entire company, right?

Rimas: Exactly. So I think I would put it at 80%. I might bring that down just a little bit. I mean, I think there's a lot of overlap, but I think when it comes to the actual operations of the business, day in and day out, that's where the CEO's got way more responsibility than a PM.

Craig: Yep, and I think that it would be unfair to underestimate any of that responsibility and the high burden that comes along with that responsibility, right?

Rimas: Oh, exactly. CEO is an extremely stressful job. Like you said, you are on the hook for making this a successful business, making it a going concern, making sure that the individuals that are working as part of your organization are taken care. I mean, whatever benchmark you use to determine "taken care of," quote, unquote. But that's a lot of responsibility. I'm glad I just deal with the product right now.

Craig: Yeah, it actually sounds a lot easier right about now.

Rimas: I'm glad we agree on that. Okay, so we talk about CEO having way more responsibility, but I think with the PM being a job where maybe 80, 70, 60% of it is kind of like being a CEO,

I actually see being a PM is a great job to springboard into that CEO job. And I've actually seen that pattern quite often.

Craig: Yeah, I think it's a great trial, especially if you want to do your own thing where you have to do a lot of it, right? If you're a good PM, at an earlier stage, more junior PM, even more experienced PM but not strategy, high, high level, you have to do a lot of things.

So if you're thinking about doing your own thing, it's a great opportunity to, "What do I need to know about marketing? What do I need to know about sales? What do I need to know about the engineering? How do I create a roadmap? How do I create my messaging?" There's a ton of pieces that all tie together. And there's a lot of juggling that goes on.

So it can be a great springboard for, "How do I become a CEO?" Now, I say that as a CEO of a small startup, your own thing, five-person company, 10-person company, I think if you're coming into a 20, 100 person company, you may need more of that senior product experience, more of an experience running a large team. There's a different skillset as you come into a larger company.

Rimas: Well, that's the PM ladder that I don't think we've talked about that yet on this show. But I would expect that somebody that's going to do that for a very large organization, kind of climbs that ladder a little bit. Or at least does something expansive, amazing, maybe gets acquired or something like that. And then is able to then get to those higher levels.

But throughout this episode, we've talked about the PM actually getting that experience, being in front of customers, in front of the public, talking about things.

You're grooming yourself, ultimately, for that job. If you want it, go get it.

Craig: Yeah, and I think as we talk about having that more senior level experience, climbing that ladder, usually you've had some of the deeper experience some of the other areas, too, right? You have some experience either deeply in engineering, or in sales, or in marketing, and you have it in product. Because many CEOs come with a pretty diverse background but also miss a few. You have to have some area of expertise, and usually it's more than one.

Rimas: So, I think the lesson here today is, if you're really interested in becoming a CEO, be a PM. Because you'll be CEO-like, you will not be CEO of your product area, but you will be well on your way to getting the skills needed to kind of move up in that direction.