Nearly 23 Percent of Product Teams Now Report to CPOs and Prioritize Team Alignment with Design, UX, Marketing, and Customer Success Over Engineering
Pendo, creator of the leading product cloud for digital products and data-driven product teams, released the second annual State of Product Leadership study, a report that provides clarity on the role of product management within modern software organizations. This year’s report, produced in partnership with Product Collective, is based on a survey of 300 North American technology product management executives and managers from B2B and B2C companies reporting more than $25 million in revenue.
“Modern companies are reshaping product teams to become more collaborative, visionary, and empowered,” said Jake Sorofman, CMO at Pendo. “This study shines light on the patterns and priorities of high-performing product leaders and product management teams as useful guideposts for understanding how to advance your own product organization.”
Key findings include:
Chief Product Officers on the Rise
This year’s report showed a substantial shift in how companies structure product teams, including an increased emphasis on adding standalone senior leadership to steward the product management function. The study showed that 23 percent of product teams now report to a chief product officer (CPO), compared to just 6.7 percent in 2018. Despite this shift, 29 percent of companies still place product teams within the marketing organization.
Product Team Goals Differ Greatly From The KPIs They Are Measured Against
The study found that 77 percent are evaluated based on number of features shipped, over business metrics such as revenue or customer happiness. Further, even as product teams are expected to drive innovation and create differentiation, many product managers still see themselves as task-oriented, instead of visionary.
Product Teams Expanding Their Coalitions Beyond Engineering
In addition, the study illustrates shifting priorities in cross-functional alignment, away from engineering and toward other teams including design, UX, marketing, and customer success. Perhaps owing to solid alignment already established in this area, product managers cited engineering as their fourth-most important point of alignment, with marketing, design/UX, and customer success filling out the primary spots.
Other standout findings from the report include:
Product teams are less likely to let competitors influence their product roadmaps, with 35 percent citing customer feedback as the primary driver of their best feature release. Competitive product introductions were cited by 20 percent as the catalyst for product releases.
SaaS and hybrid product teams are much more focused on, and report higher levels of competency around customer engagement and retention.
Last year, most product managers reported they studied business at an undergraduate or graduate level to achieve their current role, while in 2019, technical backgrounds dominated.
“Product managers play a pivotal role in shaping customer acquisition and retention,” said Mike Belsito, co-founder of Product Collective. “There’s a wealth of places product managers can look to inform product direction. In this study, we’re seeing that the majority of product managers focus more on customer data and customer happiness to make decisions, two foundational elements for product innovation.”