“Software is eating the world.” The a16z’s famous quote from 2011 is still timely 12 years later, with the added idea that you need to build software products, not projects. And to build great software products, you need great product managers. That explains why product management is becoming increasingly strategic in organizations.
Having a product management mindset requires not only cultural change to a product-centric culture, but also a clear understanding of what needs to be done, how to mitigate risks, and where your product organization sits when compared to others. That’s where having a product management maturity model can help.
What is a product management maturity model and why is it important?
A product management maturity model is a tool that helps product leaders evaluate their organization’s performance in key product management pillars. It has different criteria – and levels – that help you understand if you’re strategizing, planning, and delivering products the right way.
If correctly used, a maturity model can help you learn where you are at, give a clear path of what you need to do to improve, and help you measure your progress as you evolve. Assessing your product organization’s maturity is helpful to identify risks, areas of improvement, and possible actions to expand your product team’s impact across the organization.
After interviewing more than 100 PMs and product leaders from companies in different stages, analyzing documents from communities like The Product Management Festival and Industry, and studying different maturity models available on the market, we came up with a practical maturity model that combines different important elements and can be used by any company.
It’s a simple framework that encompasses core aspects of product management. To assess where your company sits at, download our Product Maturity Model Matrix.
The 4 dimensions of a product management maturity model
Birdie’s Product Management Maturity Model covers four dimensions: People, Processes, Vision, and Strategy. Each of these dimensions has different levels of maturity that a company can achieve – combined, they give a clear picture of where a company sits and where it needs to evolve to achieve excellence. Let’s take a look at each dimension.
The people dimension assesses probably the most important piece of the product excellence puzzle: talent. Understanding the maturity of both your product leadership and your product team can help you identify gaps in knowledge and experience and guide you on hiring and performance management.
Product management is a lot about moving several different parts at the same time. Having the right processes, tools, and metrics in place is a sign of product maturity and an important element of the scalability and growth of a product team inside an organization.
A product without a vision hardly becomes a great product. Several companies don’t have a clear product vision or see it as the same thing as the company vision. The lack of a vision makes it harder to motivate and unite your team, build a strategy, and decide what to prioritize or to let go.
A product strategy is the how of a product vision. It is an important dimension because the strategy is what drives execution – it shows the path you ought to take to get where you want to get.
The 5 product maturity stages
The combination of the 4 dimensions generates 5 different product maturity stages. Moving to the next stage doesn’t necessarily mean getting rid of all of the previous stages’ characteristics; it’s more like adding other layers to it, especially in terms of understanding when and how to use each of these characteristics.
“A product organization in a strategy-driven stage still uses the product intuition from the first stage and the project management skills from the second, for instance. The difference is that maturity makes it easier to identify when to use each of the tools from this toolbox”, explains Alex Spengler, Head of Product at Birdie.
Stage 1: Intuition-Driven
This is a common level for early-stage organizations. It is normally characterized by the absence of a formal product management team or by a team that mostly executes ideas coming from leadership – something that might work in the beginning, especially as founders have a strong vision of what they want to accomplish as a company and are looking to transform that vision into reality.
Companies at this stage also tend to have no formalized product vision, strategy, and processes to prioritize features based on customer and market needs. Decisions tend to be made based on HIPPOs and not evidence – and the lack of criteria behind it results in a lot of inefficiencies, especially when trying to scale.
Stage 2: Project-Driven
Companies at this level start to formalize their product management organization, but product teams are mostly seen as process facilitators that help deliver products on time while ensuring product quality.
It’s not uncommon for product organizations at this stage to struggle to translate customer conversations into real needs – they mostly respond to feature requests, working almost as project managers.
Product teams at this level normally don’t have a vision, strategy, and roadmap shared with the rest of the organization. Product roadmaps change often – or don’t even exist – and some decisions remain unclear.
Stage 3: Customer-Driven
At stage 3, companies have a stronger product organization, some established processes, and shift their focus to listening to customers.
As the customer is the focus, customer-facing teams get a lot of power and influence over the product strategy. It’s not uncommon to see roadmap prioritizations that mirror customer projects or that deliver requests from a more “demanding” client – mostly because the organization lacks processes and tools to collect, store, and translate customer feedback into real user needs and outcomes.
There is a lack of a bigger context and market understanding and product strategy is still weak and short-sighted. This makes it difficult to make prioritization decisions and to define product metrics and KPIs that help to measure progress. Customer requests coming from Sales or Support not only impact the product strategy but also the corporate strategy, which is still immature.
Stage 4: Opportunity-Driven
On an opportunity-driven level, product organizations are able to have a better understanding of the market, competition, and their users’ needs. Multi-functional teams consolidate and become more autonomous, which aligns with a now-established product vision and strategy and defined goals and metrics. Product leadership becomes more strategic, has a stronger voice, and starts influencing the overall company strategy. Evidence is normally used to justify product decisions and to help direct other areas’ strategies.
Product teams at these organizations capture or access user feedback from different sources and analyze it to understand what are their jobs to be done and their pains. They also start to combine qualitative and quantitative data to segment user groups and understand which type of feedback ties to different profiles.
They can still feel overwhelmed with a lot of data to process, which leads to analysis paralysis mostly due to the lack of a customer feedback management system.
Stage 5: Strategy-Driven
In a level of excellence, decisions are made taking both strategy, the market, and the customer into consideration. Product has a very good understanding of customer needs and is able to lead strategy, P&L, and collaborate cross-functionally with other teams to achieve their goals.
Product organizations at this level have well-defined processes and a tech stack that allows them to focus on outcomes and to consistently check in using data and evidence – both from user behavior and opinion – to drive discussions and support all product lifecycle activities.
The product vision and strategy, together with the evidence and data that are used to make decisions, are shared with the whole organization and stakeholders from customer support, marketing, and sales have a clear understanding of how they can collaborate with what we like to call a product-centric approach.
Now that you know the different maturity levels, it’s time to assess your product management maturity. Download our product management maturity model matrix and do it now!