Using competency models to drive improvement in product management

Using competency models to drive improvement in product management

Mark Blackwell, Arkaro

As companies look to improve the product management function, a solution may be found in Competency Models. Whilst this may ultimately help, beware that a one-size fits-all solution may do more harm as the detail can mask issues that need to be addressed.  Perhaps more so than other functions the product management role varies from business to business. With a deeper appreciation of the problem to be solved, the journey to a customised solution may be as revealing as the destination

The challenge of Product Management Competency Models

Companies use competency models to drive excellence in staffing, training, and communication of job scope.

The challenge with developing competency models for product managers is that the product management function varies widely between industries, companies, and even business units within a company! 

There is no one size fits all Job Description of a Product Manager – and therefore there is no one size fits all Competency Model.

This variation stems from the role of the product manager as an integrator between the market side—asking what will customers value and pay for? And the supply side—asking what is our company willing to produce?

Product Managers optimise the tension between the market & the business
Product Managers optimise the tension between the market & the business

The challenge is that the specifics of the supply and customer sides of the equation depend on the nature of the business, the lifecycle of the products, the roles of R&D and marketing, the difficulty of production, in essence, knowing what is the limiting factor —  the bottleneck to company performance.

For example, businesses with short product lifecycles, such as software, will need product managers to focus on the front end of innovation with competencies in understanding customer and market needs. Longer cycle, or commoditised, asset intense businesses, perhaps in chemicals, will need competencies in extracting maximum value from the product in the extended maturity and decline phases.

Of course, there is much variance in between these extremes.  A business may have core technologies for the long term, but through product formulation have relatively short life cycle SKUs.  A relatively short product life-cycle business, following a history of acquisitions, may have a complex asset network needing rationalisation.

Therefore, before a product management competency model can be created for a business, the product manager function and responsibilities must be made crystal clear. This process includes:

  • Understanding current state
  • Determining what the tough decisions and tradeoffs are for the business
  • Determining who makes these decisions today and where are the gaps?
  • Identifying the business strategy that will guide the product manager which, for example, may inform relative focus on innovation & invested capital productivity.
  • Understanding the business strategy that sets the guardrails for product rationalization.
  • Defining ideal state

The Arkaro method is to establish answers to these questions with the target business unit. Note that different businesses in the same company may have different answers!

The outcome of these decisions is often captured in a policy table which gives the entire organization clarity on treatment of products.  How easily such a policy table can be generated is a good indicator of how well the product manager function and its responsibilities is understood and defined. Once this hard work of role definition has been done, a competency model can be developed.

Developing a Product Management Competency Model

An earlier Arkaro article introduced key roles and skills for a product manager.  This article builds on this for organisations wanting to take this further and develop a Product Management Competency Model.

There is a logical approach for developing a functional competency model broken down by the following steps,

  1. Align on purpose of developing model – what is the problem to be solved?
    Confirm that a competency model is the right solution for the problem.
  2. Identify performance criteria
    Avoid complexity. Focus on the criteria that matter
  3. Collect data on organization & individuals
    Look at the organization as well as individuals
  4. Develop an interim competency model
    View as a prototype
  5. Validate the competency model
    Test & Learn mindset
  6. Integrate into HR processes
    Including training

Indeed, as the team works through the steps, be prepared to revisit this question if needed. It is conceivable that other tools might be more appropriate.

But in any case, product managers shall find themselves interacting with other functions, perhaps more so than any other function generating complexity and different possibilities on how the work gets done.

Product Management

The diverse interactions also suggest that a design team for a Product Manager Competency Model be similarly cross-functional in make-up to ensure perspectives are captured and that the final solution will have the suitable buy-in.

Detailed RACI tables identifying how different functions interact may provide the “perfect technical solution”, but the complexity may easily confuse and lose communication impact. Perhaps first start with visualizations such as below to help define what work is needed and where it gets done, most importantly at the intersections where integration is required. Cross-functional team discussion may reveal that understanding is perhaps not as universally clear, or as formalized, as initially thought!

Product Management Competency Models
Note – the diagram is illustrative and may not reflect the work pattern in your organisation.

Consider following up with RACI table but be sure it will be used as a practical value adding tool. Experience would suggest that this is not always the case.

The key trade-offs decisions that need to be made for integration vary from business to business. In other words, the bottleneck that needs focus to optimize throughput differs. If organizations have adopted generic job descriptions without adequate contemplation on the real trade-offs arising from the business aspirations, such decisions may be happening informally in surprising places. For example, if sales are incentivized to build revenue in distant markets, whilst operations are focused on low-cost production who will be managing trade-off policy decisions on floor price, lead times and minimum order quantity???

Understandably an organization may soon realize that it has “unknown unknowns” in not only who does the work, but what work should ideally get done. For example, the rational for a Product Line Strategy may not have been realized. At this point an external diagnostic from Arkaro for deeper understanding of current state is valuable. This should start at organizational level and then move to individual level.

Following diagnosis of current state, the hypothesised criteria may be focussed, perhaps giving more attention to where the organisation has gaps.  There should be enough criteria to represent the critical activities – but not so many that the tool is too cumbersome.

One example list of criteria might be the following, but again the reader is cautioned against a “copy-paste” approach without going through the preceding steps.

Potential criteria for Product Management Competency Model

Nevertheless, once the criteria list has stabilised, that would be the point to draft more detail for each criterion. 

This interim model should be tested with key stakeholders, perhaps in a focus group. Of course, it makes sense that adjacent functions have Competency Frameworks that complement the design. Indeed, discussion may demonstrate that there is a similar need to clarify adjacent functions including marketing, business development and R&D.

The sequencing of the journey should now be clearer. 

  1. Align on purpose of developing model
  2. Hypothesize performance criteria
  3. Collect data on current state
    1. How do functions currently interact to get the work done?
    2. Determining what the tough decisions and tradeoffs are for the business.
    3. Determining who makes these decisions today and where are the gaps?
    4. Identifying the business strategy that will guild the product manager which, for example, may inform relative focus on innovation & invested capital productivity
    5. Defining ideal state
  4. Develop an interim competency model
  5. Validate the competency model
  6. Integrate into HR processes

Investing effort in the hard work of defining the business specific product management critical activities will be rewarded with an effective Competency Model. Arkaro can support and guide your team for a successful journey.

Mark Blackwell - independent consultant Arkaro

Mark Blackwell

With over 25 years of experience Mark has global line management and consultancy experience across innovation, product management, marketing, sales and supply chain built on strong analytical capabilities and business acumen.   
A 6 Sigma Black Belt, Mark was internal business consultant and productivity business leader in DuPont covering a range of industries including advanced materials, agriculture & speciality chemicals and nutrition & health. 

Mark is based in the Geneva, Switzerland area.