The product management approach

Jun 21, 2002 12:00 PM, Steve Hawley

It's becoming increasingly safe to assume that "doing video" is a legitimate business opportunity for telcos, and not just an over-a-beer discussion among the engineers, as it was not so long ago. Given this assumption, telco managers face a fundamental question: "How do we get from concept to revenue?" Some have a general understanding that getting a new media venture off the ground and focused on results takes more than just a few new line cards; some have researched it far enough to know that it involves the acquisition of television programming and movie content, software and new customer premises equipment.

Readers of my previous columns about two service providers that have been early to introduce TV services might remember the names of some of the technology suppliers and their products. For those of you who figure that this is enough and that it's OK to go out and start talking price with them because this guy in The Analyst's Corner listed a few brands of middleware and set-top boxes, let me assure you that it isn't quite so easy. With that, let's look at the important discipline of product management.

For virtually any technology supplier, product management is a fundamental part of business. A product manager has virtual (or in many cases, actual) profit-and-loss responsibility for the business of his or her product. The product manager knows what the widget is supposed to do, understands its underlying technology well enough to make informed product decisions, knows the widget's competition, communicates the widget's competitive advantages to the sales force in the form of an "elevator pitch," knows how much it will cost to build, manages the cross-functional team that conceptualizes it and gets it planned, funded, scheduled, built, priced, launched and ensures that there are effective sales and marketing tools to help it get sold. An effective product manager for a widget must be the absolute authority on the widget.

For any service provider to succeed in the complex and sometimes confusing world of new media services, or for that matter, any service, TV or otherwise, it is critical to have a product management orientation and a dedicated product manager. To understand the importance of product management to a service provider, let's step into the product manager's shoes. First, the product manager must answer some very basic questions before asking the company to commit capital and labor. 

Some of these questions are:

• What is the situation in your market? Are you trying to address an existing threat, thwart an anticipated threat, be the first to address a new opportunity?

• What is the competition? Is the cable TV company planning to offer voice and data? What makes it effective, and what can you do better? Do you offer any services that it doesn't offer?

• What percentage of your subscriber base do you want to serve, and have you asked them what they would want the service to be?

• Would the product help your company achieve revenue goals, strategic objectives and increase value for the shareholders?

• Given all of the above, what should be the desired features and functionality, and why? Should it be TV-only? How many channels and what's the channel line-up? Should it include video-on-demand?  Will it be bundled with your phone and data services? What would be the impact of these various options?

• What is the required schedule for the service's launch, and what are the goals for break-even and profitability?

The product manager formally evaluates all the above questions, with the support of the product team and sometimes with the help of outside research and consulting talent, to arrive at one of the key product management reference documents, the market requirements document (or MRD). The MRD describes the product and summarizes the world into which the product would be introduced. It contains rough financial estimates; for a TV deployment, it would include a video head-end, new network equipment, CPE, software and systems integration, including with the billing system. The MRD essentially ends up being a well-researched business case for the new service (or product). It's the way for the product manager to declare: "This is worth developing, with these features, by this date. Here's why it will help us beat our competitors, and here are the supporting pro-forma financials."  

The response to the MRD is a functional specification and product plan, which scopes out the resources and expenditures necessary to meet the functional and schedule requirements cast in the MRD. The product plan encapsulates the answers to a number of important questions. How much of the work is done in-house? Is new staff involved? What happens if implementation work is outsourced?  What is gained or lost, based upon specific technology and vendor decisions? If the costs outweigh the benefits, how does the allocation of more or less money affect functionality and launch date? 

Once all the options have been identified and prioritized, the product manager rallies the management team (and/or the company directors) to review the options and make decisions regarding functionality, schedule, resources, budgets, staffing and capital expenditures. It is not unusual for this to be an iterative process, at the end of which the product plan is finalized. If all this is done up front, acquisition, implementation and, not incidentally, supplier relations become much easier, rationalized by choices already made. 

How does all of this get done, you ask? As I suggested earlier, an effective product manager never works alone. Product management is a completely interactive process. What makes for an effective product manager? The best ones have that rare combination of business, marketing, technical and operational acumen; both big-picture thinking and down-in-the-weeds attention to detail. The effective product manager is entrusted with the authority to work across the company or with all levels of management. They are extroverts without the kinds of ego flaws that would prevent them to delegate work to team-members with functional and subject matter expertise. They also know that business is not always a democracy: they are masters of consensus-building that can also assert a tie-breaking decision for the good of the company.

Each department in the company selects a representative to sit on a product team that is led by the product manager. Someone from Finance, from Engineering, from Operations, etc. These representatives are given the responsibility to represent the needs and issues of their departments to the product team. Accordingly, they represent product issues back to their own departments' management. Now that we have a team, what happens next?

Allowing a product management mentality into your company is worth the effort. A requirements-driven product management orientation transforms technology and vendor selection from guesswork into an informed decision. Cool technology may result from the Field of Dreams school of product management ("If we build it, they will come"), but only whole-business thinking will increase the likelihood of profitability and in the long run, a level of customer satisfaction that increases job security across the company.

By the way, to reflect on the customer feedback concept raised earlier, if one of your suppliers' product managers asks you for your valuable input or to sit on a product advisory committee, don't assume that it's a sales call. Now that you know the product manager is trying to improve the effectiveness of your technology infrastructure, consider it to be a privilege and say yes!

Having had years of technology product management experience, some good, some bad, Steve Hawley is principal of Advanced Media Strategies, and may be reached via http://www.tvstrategies.com.