Digital acceleration, supercharged by the pandemic, has seen the role of Chief Product Officer (CPO) grow in importance. The 2023 CPO Insights Report produced by, product manager specialist, Products That Count and Capgemini found 30% of Fortune 1000 companies have a Chief Product Officer in 2023, up from 15% last year. This is expected to reach 70% by 2027 or earlier which is significant growth, bearing in mind that ten years ago, this role hardly existed outside the technology industry.
Andrew Demetriou, Associate Partner in Eton Bridge’s Transformation, Digital & Technology Practice with extensive experience in the Chief Product Officer market, takes a closer look at why this role has become front and centre in the race to gain the edge in the digital age.
Defining the Chief Product Officer role
“The role of Product has significantly evolved over the past few years, from providing solutions to well-understood problems to being the top of the funnel for customer discovery, onboarding, and success.”
2023 CPO Insights Report, Products That Count and Capgemini.
The product function can often be complex and is responsible for driving product strategy from idea origination to launch and beyond, all the while balancing the interests of the business, customers and the tech team. As such, Chief Product Officers manage across many different functions from software developers to product marketing and creative/design.
A Chief Product Officer focuses on why build a product and what problem is being solved. Building a great product means understanding the capabilities of tech, but also fully comprehending what users want and how they will use a product. A CPO has a foot in both camps – tech expertise combined with a laser-like focus on customers. Leading management consultancy, McKinsey & Co, describe product managers as:
“The glue that binds the many functions that touch a product. Unlike product managers of the past, who were primarily focused on execution, the product manager of today is increasingly the mini-CEO of the product.”
In a tech-first organisation, the Chief Product Officer is already accepted as a core member of the top executive team. In an organisation that has bolted tech on to traditional bricks and mortar, the role can look quite different, but is becoming increasingly more common.
Different businesses interpret the role in different ways, and the line between the various tech C-suite titles can often be blurred. Large corporates, who have traditionally had a Chief Information Officer (CIO) heading up technology, are increasingly hiring Chief Product Officers who have a seat at the same table on the leadership team and work with a CIO. This is increasingly common among businesses that are not seen as tech or product first and in a range of industries such as education, retail, banking, insurance, gaming, gambling and media.
Given how new this role is for many organisations – and for Chief Product Officers themselves – defining the role’s remit can be a learning journey for both the CPO and the rest of the leadership team. The role is likely to continue to evolve rapidly as it grows in influence and visibility and as Boards and CEOs come to better understand the role. It is becoming increasingly common for Chief Product Officer roles to be more closely aligned with commercial and marketing teams, rather than being seen as a role sitting purely in tech.
How do Chief Product Officers add value and why do organisations hire one?
What is the business case for hiring a CPO and where does this role specifically add value vis a vis the other C-suite members? Newly available technologies together with a change in customer behaviour – retail ecommerce sales globally have more than quadrupled to US$5.7 trillion in the last eight years according to Statista – make a compelling case for a rethink on C-suite skillsets.
Organisations are increasingly making space at the C-suite table for a product specialist who is outward-looking yet still commands the respect of the tech team. Education group Emeritus describes how a Chief Product Officer can be instrumental in driving Product-Led Growth (PLG), which puts the customer in the driving seat and leverages product experience as the main driver of sustainable sales growth. This marks a shift from more traditional growth strategies such as sales- or marketing-led.
Ultimately, there can be as many different value-adds from a Chief Product Officer as there are companies who hire them. A founder-managed business may benefit from handing over the product function to allow the founder to carve out a more purely CEO role, whereas a longer-established business may be looking to the CPO to ensure digital transformation delivers revenue growth, disrupt the market with new products or potentially add product through flagging M&A opportunities.
What makes a good Chief Product Officer?
The role can be a challenging one – there are multiple interests to balance, and the role is not always well understood at the Board level, or amongst C-level peers. What makes a good CPO and how this individual can overcome these challenges are two sides of the same coin.
The role is relatively new and differs depending on the type of organisation so backgrounds vary, but there are some things that all good Chief Product Officers do:
- Set Objectives and Key Results (OKRs) that serve the strategic goals of the business and align product with company culture and values.
- Build strong relationships and communication with peers – CFOs, CTOs and CMOs in particular.
- Understand the Board and their goals – making sure they are all aligned.
- Influence and communicate in an effective way – downwards, sideways and upwards in language they can understand.
- Budget effectively and get quick wins by prioritising smartly.
- Explain value and metrics in a way others can understand.
- Develop a product culture throughout the organisation so all are engaged without the need to micromanage.
- Maintain flexibility given the likelihood that their role will evolve.
Eton Bridge’s Transformation, Digital and Technology practice has extensive market reach and long-standing relationships across a range of companies from PE-backed to blue-chips. Andrew has specific expertise in the Chief Product Officer space and is passionate about the pivotal role they can play in driving business performance. Whether you are an existing Chief Product Officer, an aspiring CPO or looking to hire one, we would love to hear from you so please do get in touch and watch this space for further blogs exploring this evolving role in greater depth.
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