Major banks use product management because it has proven to be an excellent way to manage a multiproduct business in a highly competitive environment. On both the wholesale and retail sides of banking, it has enabled institutions to respond to the challenges posed by the increase in the number of products over the years, the increasing complexity of products, and the impact of the major changes occurring in the financial services marketplace.
What is frequently misunderstood is that product management can also be highly effective in accelerating the development of people with business management skills.
By way of background, product management was adopted because it has been recognized that in today's complex and competitive market it is simply not feasible for business-unit management to give sufficient attention to each product and/or product category. Product management also enables the bank to manage each product as a separate business, within the context of business-unit strategy. On each product line there are people dedicated full-time to understanding the market and the customer.
It is easy to see, in a general sense, why a person who is given this kind of responsibility can develop rapidly as a business manager.
Here are some more specific reasons why a product management function that is well managed develops effective managers:
The simple fact of delegating broad product management responsibility involves the manager in all aspects of the business, as opposed to focusing narrowly on a given functional task.
Responsibility for achieving business results is clearly assigned. Like senior management, the product manager has to learn to do "whatever it takes" to get the needed business results.
Placing business management responsibility on the product manager stimulates him or her to be entrepreneurial and continually on the lookout for ways to build business. It also stimulates the leader to be continually on the alert to identify problems that may interfere with the successful development of the business, and to propose ways to resolve these problems.
"Product management discipline" is a way of approaching the business that ensures that it is tightly managed.
The key elements of product management discipline are:
Heavy focus on getting the facts on the business and on the market.
Analyzing the facts to determine what they are telling us about the state of the business.
Developing strategies to move the business ahead, based on analysis of the facts.
Staying on top of the business.
Knowing at all times what is happening to the business, why it is happening, and what needs to be done to solve problems and capitalize on opportunities. …