What Is a Chief Product Officer, and Why Should You Care?
Managing a company or business requires a lot of people. There are always many moving pieces, and it can be difficult to make sure all the different people are working in unison. In addition, as companies grow, the need for someone to manage every aspect can also become overwhelming. This is why more and more companies are hiring Chief Product Officers (CPOs).
CPOs take on several responsibilities, including overseeing the product development process, figuring out pricing, and building relationships with retailers. The Chief Product Officer is typically placed on the company’s executive team, which means they work with executives like CEOs, CFOs, CMOs, and CIOs. This article will explore the rise of the Chief Products Officer and explain how they play a valuable role in any business.
What is a CPO?
The Chief Product Officer is in charge of the entire product organization. The CPO is responsible for the value proposition, marketing strategy, competitive positioning, etc. They are usually a combination of designers, engineers, marketers, and other roles that contribute to delivering a great end-to-end customer experience. Leading this diverse cross-functional team means balancing the needs of different stakeholders, which is why they need to be organized and strategic. It also helps to have strong business acumen and be an outstanding communicator.
A key role of the CPO is to help make decisions on what products get built or not built. The CPO also advises senior leadership on what investments should be made to grow the company's bottom line. In short, these professionals play an essential role in any team by ensuring the success of a product from conception to launch.
The Change in Product - The Rise of the CPO
Product managers, product marketers, product inventors, and others have been hired at senior levels for decades. They usually report to a CEO or other senior executive. The function of these product-focused employees has evolved throughout time. A business's products are now the face of the brand, a significant aspect of the consumer experience, and a source of organizational innovation.
Also, the global economy has never been more competitive. Innovators and disruptive competitors may now easily launch a new product and take market share from you. These issues have increased the need for a well-planned product strategy. That's why CPOs are needed today more than ever.
Why is it a C-Suite Role?
Like marketing, product is no longer impacted by a single department. Instead, it's an enterprise-wide procedure that demands coordination across many teams. Product managers need to have C-level authority, resources, and influence to succeed. True product innovation distinguishes top organizations in today's competitive marketplace.
This person may represent the product team at the highest levels of the organization, build connections with other executives, and be in contact with key players in Marketing, Sales, R&D, and other departments.
Here’s how CPOs work with other C-Suite roles:
CMO (Chief Marketing Officer)
The CPO works directly with the CMO on growth marketing and must understand consumers and buyer profiles. The CMO is focused on getting customers in on the product and is responsible for constantly developing the sales funnel by managing ad campaigns and refining buyer personas. The CPO's value also shines after the sale as they help avoid turnover and maintain product value.
CTO (Chief Technology Officer)
Similarly, the CPO and CTO collaborate extensively on product design. The functions may seem similar at first. However, the CPO concentrates on what has to be done and why, while the CTO thinks out how to execute. As a result, the CTO oversees product development and has increased technical duties. For example, they decide what technology is required to develop new items.
How Chief Product Officers & Managers Impact Business Operations
In this age of digital transformation, CPOs have become increasingly important for businesses to thrive. In fact, the US Bureau of Labor Statistics reports a 20% employment growth rate for CPOs (compared to just six percent of other top executives).
Here are some ways that CPOs positively impact business growth:
CPOs define and identify solutions to a marketplace problem, need, or challenge
CPOs monitor the competitive environment to sustain product growth and market viability
CPOs make sure that there is consistency across the company when it comes to products
CPOs promote new products to investors, buyers, and other stakeholders
CPOs delegate responsibilities so that everyone is on the same page
CPOs take charge of the vision for their team
CPOs make the customer experience great
When is it Time to Hire a CPO?
The Chief Product Officer is a growing role, with record numbers of the C-Suite position being added to organizations globally. Whether or not your company follows suit might have a major influence on future revenue and growth possibilities.
If you aren’t sure if it’s time to hire a CPO for your company, here are some signs:
A CEO or other leader has been creating strategy and functioning as product management is becoming too busy to handle day-to-day tasks for the product roadmap.
After achieving product-market fit, your company begins going from a single product to a portfolio.
Your company and products(s) are expanding into new channels and regions.
As your organization is expanding, financial and product execution decisions are becoming more complex.
Your company has increased development expenses while being stagnant in terms of growth.
Your organization is trying to integrate a product portfolio, product strategy, and product-operating model after purchasing or merging with another company.
The Future of CPOs - What to Expect
The CPO job will change with the company and the maturity of the product department. A corporation may need a strategic visionary, a customer experience expert, or a commercial champion at various times. As the job acquires popularity in both financial and tech businesses, it isn't very likely that a single model will emerge. Instead, leaders will benefit by routinely examining the role's necessity and scope and ensuring its unrelenting emphasis on customer experience, which is the way to long-term success.
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