It’s Hard Being a Product Leader in a New-to-Product Organization

It's hard being a product leader in a new-to-product organization.

Speaking Frankly - It’s Hard Being a Product Leader in a New-to-Product Organization 

My heart broke when a product leader, one year into her new role, shared with me:

“Being the only product-minded person at my firm is lonely and often thankless. It is a combination of exhaustion, a lack of support, and deeper issues of mistrust coupled with high workload, a lack of autonomy, and this unspoken experience with others questioning your expertise.”

Unfortunately, her experience is far too common.

More & more companies – across all industries- are realizing that to compete & grow in our digital world, they must look, think, & act like digital products companies.

For B2B services companies, we call this “productization”, which essentially means turning intellectual property - a process, data, content - into a product that can be delivered in more scalable, replicable, and often tech-enabled bundles of value sold for a standard price to customers. 

To succeed, most companies decide to bring in new talent to lead product development and management and to model a “product mindset” for the rest of the organization. 

Yet, the journey these newly hired product leaders embark upon can be fraught with unique challenges. While everyone typically is committed and has the best of intentions, these pain points often arise from a misunderstanding of the ways product and services present differently. Typical challenges product leaders hired from the outside face at services companies include the following:


  1. Low Technical & Product Acumen at Leadership Levels

"Our CEO keeps coaching me to use different words. ‘No one understands what you are saying,’ he says.’ The lack of digital acumen on the leadership team is jaw-dropping."

One of the most common challenges faced by externally hired product leaders in an organization that is just starting its productization journey is the disconnect between their technical and product expertise and the leadership team’s knowledge. Often, these product professionals are misunderstood or undervalued due to a lack of comprehension of their skill set. The struggle to bridge the gap between their digital expertise and the rest of the organization can be a constant uphill battle. This can upend all aspects of productization from creating the productization strategy to making tactical decisions on technology investments.


  1. Risk-Averse Leadership Teams

"The equity partners are incredibly risk averse and need a lot of convincing to invest at the level we need to build and sell a product."

Typically, B2B services organizations invest in product development as part of engagements for existing clients. But to take a product developed for one or two clients and adapt it, market it, sell it, and maintain it often requires investment with uncertain revenue returns. Making this level of upfront investment is a new muscle for many firm equity holders. Risk aversion can lead to underinvestment in new product initiatives, dooming them to failure. 

Imagine a product leader engaged in a constant battle of persuasion, attempting to convince equity partners of the merits of substantial investment in product development. The resistance to change and aversion to risk can often feel like pushing against an immovable wall.


  1. Unrealistic Performance Time Frames

Setting overly ambitious performance time frames is another common challenge that we typically see product leaders face alongside underinvestment. Again, because B2B services organizations typically invest in product development as part of engagements for existing clients, leadership teams often expect revenue and even profit results quickly. As a result, they may underestimate the time it takes to develop, market, and sell new products. 


  1. Slow Organizational Pace

"The organization is moving too slow. I need more urgency, especially from marketing and the subject matter expertise I need to quickly iterate the product."

A significant challenge faced by external product leaders is the discrepancy in speed between the typical pace of agile product development and the rest of the organization. They're eager to iterate rapidly but are held back by bureaucratic hurdles and a lack of urgency. Marketing, subject matter experts, finance, legal, and other stakeholders may not be accustomed to the speed required in the digital product world. 


  1. Limited Access to Clients

Access to clients for testing and feedback is a requirement for good product development. However, in B2B service organizations, existing relationships between clients and service leaders can create barriers. We often hear, "My team needs to get closer to our clients to test ideas and find out what’s really working, but the partners won’t let us talk to them."

Being protective of client relationships is normal but without some protocols for product leaders to interact with clients, organizations run the risk of developing products that no one will buy or use.


  1. Ineffective Sales Strategies

"The consultants are not selling the product. They would rather sell higher-priced projects and when they do sell products, they make customization promises that are hard to keep.” 

Even if a great product is developed, it may not sell if the organization lacks the expertise to sell products effectively.  The seller-doers who are great at selling customized services (e.g., partners, consultants) often don’t have the incentives or skills to sell often lower-priced and less-customized products. And, tying back to under-investment, the organization may be unwilling to invest the resources into a dedicated product sales channel and the marketing needed to support it.


  1. Chasing Too Many Ideas

Lastly, external product leaders may find themselves chasing bad product ideas due to the organization's inability to assess market opportunities effectively. This happens when there is no agreed-upon process for vetting ideas. This also happens when the organization does not know how to constructively say ‘no’ to unneeded client customization requests.

"We don't know how to say no to a client - we think that being client-first means we have to say yes, we let them drive us to custom solutions time and time again."

The desire to prioritize clients' needs can sometimes result in a constant cycle of custom solutions, diverting resources away from scalable product development.


It’s a long list of challenges. BUT, if the leadership team does a few simple things at the same time they hire an external product leader, they can dramatically increase the likelihood that the product leader will succeed.


How to Help Externally-Hired Product Leaders Succeed:

To mitigate this challenge, establish clear protocols for client engagement and ensure that product leaders have opportunities to interact with clients. Transparent communication and collaboration between service and product teams are vital.

Address this issue by providing training and resources to enhance the sales acumen of your team. Develop a comprehensive go-to-market strategy that aligns with your product's unique value proposition.


  1. Leadership Team Alignment

Align the leadership team on the short- and long-term benefits of a productization strategy, the resources required to be successful, and realistic timeframes for hitting performance targets. Take pains to outline the practical implications and changes that will have to happen in order for product investments to pay off, such as reworking sales incentives to support product sales.


  1. Organizational Upskilling

Invest in raising the product and digital acumen of the leadership team and managers. Teach them how to recognize a 'good' product idea and how to evaluate the attractiveness of one market opportunity over another. Also, introduce them to concepts such as design thinking, lean product management, and agile development practices, and discuss the importance of speed and access to customers as part of implementing these concepts.


  1. Create a Process for Making Product Investment Decisions

Establish a clear process to decide which opportunities to pursue and to ensure existing product investments are on track. Develop criteria for evaluating ideas that are specific to product KPIs, not based on indicators of successful services investments, and don't be afraid to kill bad product ideas. 


  1. Find a Peer Community

Appreciate the importance of having a peer community where your externally hired product leader can find a safe space to receive support and share experiences. Help them avoid reinventing the wheel by learning from others who have faced similar challenges.

While the path for external product leaders in new-to-product organizations may be fraught with challenges, it's not an insurmountable journey.


Vecteris is here to help!  Schedule time with a Productization coach today.