Product Manager's Desk Reference

745 Pages·2008·3.23 MB·English

by  Haines, Steven.

ADVANCE PRAISE FOR
THE PRODUCT MANAGER’S
DESK REFERENCE

The Product Manager’s Desk Reference is an encyclopedic refer-
ence tool for product managers everywhere. The material is presented
in an accessible, logical format with numerous useful templates and
outlines. This book should be a prominent addition to every practicing
manager’s library.

—L I N D A G O R C H E L S, D I R E C T O R , E X E C U T I V E M A R K E T I N G ,
UW–M A D I S O N E X E C U T I V E E D U C AT I O N

This book very accurately addresses the challenges I have faced dur-
ing my time in product management. I only wish such a complete
resource as The Product Manager’s Desk Reference had been
available to guide me throughout my career. I believe that from now
on, this book will stand as an important reference point for all prod-
uct management teams.

— M A R K E L L I O T T, V I C E P R E S I D E N T P R O D U C T
M A N A G E M E N T, S M I T H S D E T E C T I O N

This book is the quintessential, comprehensive body of work on prod-
uct management. It deserves a spot not only on the desk of every
product manager, but within reach of every person involved in the
creation, sales, or support of a product.

— T H E R E S E PA D I L L A, P R E S I D E N T, A S S O C I AT I O N

O F I N T E R N AT I O N A L P R O D U C T A N D
M A R K E T I N G M A N A G E M E N T

Haines strikes the perfect balance between theory and practice, com-
bining actionable, practical advice from his extensive professional
experience with just the right amount of background for why product
managers need to care about the underlying principles. This is an
invaluable reference.

— T O M S V R C E K , P H.D., M A N A G I N G D I R E C T O R ,
C O R P O R AT E E X E C U T I V E B O A R D

A very readable, well-written book that contains significant insights
and provides practical wisdom on the profession of product manage-
ment. An excellent guide for any product manager or marketing
professional.

—J I M D O E L L , V I C E P R E S I D E N T O F
M A R K E T I N G , T R E M C O , I N C .

The Product Manager’s Desk Reference reflects Steven’s consid-
erable experience and passion for product management. This book is a
comprehensive work that is much more than a text book. Each section
draws on Steven’s personal experience and includes insights into the
“why” and “how”—questions that are critical to the successful prac-
tice of product management.

—B I L L S H A N N O N , V I C E P R E S I D E N T –GMS P R O D U C T L I N E
M A N A G E M E N T, P I T N E Y B O W E S G L O B A L M A I L I N G S Y S T E M S

A great tool for every product manager…

—D AV I D P. H I L L, G E N E R A L M A N A G E R (A M E R I C A S),
C H O M E R I C S D I V I S I O N O F
PA R K E R H A N N I F E N C O R P O R AT I O N

A great reference tool for both new and experienced product managers
as well as product management executives.

—J U L I A B A I L E Y, D I R E C T O R , P R O D U C T
M A N A G E M E N T, M A R I T Z

The Product Manager’s Desk Reference is an essential resource
for anyone in the product management field. Steven Haines covers
this multifaceted topic in a systematic manner that makes the book
easy to navigate. His groundbreaking proposal that product manage-
ment become a formal discipline is an accurate reflection of the acute
need for these skills in the business community. The book will help
anyone raise their “Product Management Experience Quotient” and
make them more effective in their job. It is a true reference book with
useful templates and samples. I keep it near my desk for easy access.

—D A N O’D AY, S E N I O R D I R E C T O R P R O D U C T
M A N A G E M E N T, T H O M S O N R E U T E R S

THE PRODUCT
MANAGER’S DESK
REFERENCE

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THE PRODUCT
MANAGER’S DESK
REFERENCE

STEVEN HAINES

New York
Chicago
San Francisco
Lisbon
London
Madrid
Mexico City
Milan
New Delhi
San Juan
Seoul
Singapore
Sydney
Toronto

Copyright © 2009 by Steven Haines. All rights reserved. Except as permitted under the United States Copyright Act of 1976, no
part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system,
without the prior written permission of the publisher.

ISBN: 978-0-07-159135-5

MHID: 0-07-159135-4

The material in this eBook also appears in the print version of this title: ISBN: 978-0-07-159134-8, MHID: 0-07-159134-6.

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—From a Declaration of Principles jointly adopted by a Committeeof the American Bar Association and a Committee of Publishers

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A man is nothing without the women in his family.

To Mom, Debra, Alex, Gail, Alison, Lauren, and Ruthie;

A wise man is nothing without his teachers.

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C O N T E N T S

Acknowledgments
xxiii
Introduction: The Accidental Profession
xxvii

MODULE 1

FOUNDATIONAL ELEMENTS FOR PRODUCT MANAGEMENT
Introduction to Module 1
1

Chapter 1

What Is Product Management?
5

Question 1: What Is a Product?
6
Product Lines
7
Product Portfolios
8
Solutions and Bundles
9
Product Elements and Modules
12
Platforms
13
Question 2: What Is Management?
14
What Does a Product Manager Really Do?
15
Question 3: What Is Product Management?
18
Question 4: How Does Product Management Transform a Product?
20
New Product Planning Phases
21
New Product Introduction Phases (Execution)
22
Post-Launch Product Management
22
Product Management: A Holistic Activity
23

ix

Raising Your Product Management Experience Quotient (PMEQ)
26

Chapter 2

The Product Master Plan
29

The Purpose of a Master Plan
30
Plans Change
31
The Format of the Product Master Plan
32
The Value of a Product Master Plan
33
An Insurance Policy for Consistent Communication
35
The Basic Construction of the Product Master Plan
35
Major Documents Included in the Product Master Plan
38
A Personal Library
42
Summary
42
Raising Your Product Management Experience Quotient (PMEQ)
43

Chapter 3

Leadership: Creating Influence
45

You Are Always on Stage
48
Stay Calm, Even when Your Hair’s on Fire
48
Transformation
49
The Most Important Values
49
Leadership Behaviors and Mindset
51
Additional Skills and Subject Matter Expertise
55
Experiential Development
56
How Do You Improve Your Skills and Experiences?
57
Summary
58
Raising Your Product Management Experience Quotient (PMEQ)
59

Chapter 4

Cross-Functional Product Teams: Getting Things Done
61

Cross-Functional Team Definitions
62
Definition: A Culture of Discipline
63
Team Membership
65
Teaming Is Not Always Easy
66
Curing the Dysfunctional Team
68
Building Blocks of a Cross-Functional Product Team
69

x
CONTENTS

Product Team Responsibilities
75
Forms of Cross-Functional Product Team Membership
75
Clarifying Roles and Responsibilities
76
The Functional Support Plan
78
Team Membership across the Life Cycle
79
Cross-Functional Team Leadership
80
Summary
81
Raising Your Product Management Experience Quotient (PMEQ)
81

Chapter 5

Decision Making: What’s Next?
85

The Importance of Decision Making
86
Decision Making and Problem Solving
87
Saving Grace: A Case Study about Decision Making
89
Decision-Making Techniques
93
Combining Options
94
The Morphological Box
94
The Decision Matrix
96
The Decision Tree
97
Analysis Paralysis and Rational Ignorance
98
Gut-Feel Decision Making
100
Business Intelligence
102
Summary
102
Raising Your Product Management Experience Quotient (PMEQ)
103

Chapter 6

Finance for the Product Manager: Keeping Score
105

The Language of Business
106
The Basic Financial Statements
106
The Income Statement
107
The Balance Sheet
111
Cash Flow
115
Demystifying Discounted Cash Flow
116
Financial Planning for Product Managers
118
Creating Business Cases for Product Investments
118

CONTENTS
xi

Assembling Forecasts
119
Testing Planning Assumptions Using Sensitivity Analysis
120
Deriving Product Cost Models
120
Establishing Pricing Models
122
Preparing Product Budgets
123
Managing the Business
123
Making Sure the Product Is Achieving Its Financial Goals
124
Financial Ratios
124
Last Words on Ratios
128
Maturity Assessment: Placing the Product on the Life Cycle Curve
128
Using Scorecards
130
Summary
130
Raising Your Product Management Experience Quotient (PMEQ)
131

MODULE 2

MAKING THE MARKET YOUR PRIMARY FOCUS
Introduction to Module 2
133

Chapter 7

The Playing Field and the Players: Analyzing the Industry
and Competition
135

Becoming the Expert
136
What Is an Industry?
137
Industry Classifications
137
Putting Industry Evolution into Perspective
140
Carrying out Industry Research
141
Securing Additional Data
146
Processing the Signals
149
Competitive Environment
149
Competitive Positioning
150
Gaining an Edge: Performance Counts
151
Competitive Intelligence in Your Company
151
Competitive Intelligence in Your World
152
Ethics in Competitive Intelligence
153
With Whom Do You Compete?
154

xii
CONTENTS

Competitor SWOT
154
How Do They Do What They Do?
156
The Final Analysis
163
Summary
164
Raising Your Product Management Experience Quotient (PMEQ)
164

Chapter 8

Finding Markets to Conquer by Understanding Customer Needs and
Market Segments
167

The Common Denominator in Segmentation: Customer Needs
168
How Markets Are Segmented
170
Market Segmentation and the Marketing Mix
173
Describing the Target Market
174
They Don’t Know What They Don’t Know
176
Planning and Carrying out Customer Visits
179
The Voice of the Customer
183
Using Personas as a Way to Capture Needs
186
Your Research Strategy
187
Summary
188
Improve Your Product Management Equivalence Quotient (PMEQ)
188

Chapter 9

Preparing to Set Your Mileposts: Forecasting for the
Product Manager
191

Forecasting Basics
192
Forecasting Is a Cross-Functional Exercise
195
Validating Market and Demand Potential
195
Forecasts Are Built on Beliefs about the Future
198
Validating Assumptions and Applying Customer Preferences
199
How Much Can We Really Make? Deriving Market Share Estimates
200
A Case Study Example for Forecasting
202
Sales Forecasting
207
Making the Sales Forecast Useful
208
Demand Planning
209
Concluding the Case
210

CONTENTS
xiii

Summary
213
Raising Your Product Management Experience Quotient (PMEQ)
213

Chapter 10

Strategic Product Planning: The Inflection Point
215

Strategy Is a Dynamic Continuum
216
Using a Generic Strategy
217
Strategy Is Like Solving a Puzzle
218
The Waterfall Effect
219
Dynamic Strategy for the Product Manager
221
Strategy in Your World
222
The “Product as a Business” Strategic Planning Model
223
The Model: A Quick Walk-Through
224
The Product as a Business Strategic Planning Model in Detail
225
Step A. Baseline the Business of the Product
225
Organizing the Data
226
External Data: Industry and Competition
227
Customer Activity
229
Organizational Capabilities and Financial Health
230
Capturing Product Performance Data
230
Synthesizing Data and Creating Useful Information
236
Prepare to Tell a Story about the Product
241
The State-of-the-Business Product Strategy Review
244
Step B: Recast the Vision for the Product
244
Step C: Identify Strategic Options
247
Summary
250
Raising Your Product Management Experience Quotient (PMEQ)
250

MODULE 3

THE START OF THE PRODUCT’S JOURNEY AND THE NEW
PRODUCT DEVELOPMENT PROCESS
Introduction to Module 3
251
Limits and Benefits of Processes
256
A Generic Phase Gate Model
257
Processes Are Linear, Markets Are Not
258
Importance of the Right Pace for New Product Planning
258

xiv
CONTENTS