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Product Innovation

Meet the Chief Product Officer

There’s a new CxO in town as more enterprises expand product management teams beyond engineering

Engineering’s grasp over product development may be slipping. Just about one in four product teams now report to a chief product officer (CPO), who’s responsible for prioritizing product design, user experience, marketing, and customer success over straight engineering objectives.

So says a new report from product experience and management software provider Pendo. Its second annual “State of Product Leadership” study found that power is shifting away from engineering teams running product development to a newer structure that focuses on adding dedicated senior leadership to run the product management function.

The study found 23 percent of product teams now report to a CPO, compared with just 7 percent in 2018. Despite this shift, 29 percent of companies still place product teams within the marketing organization, the study found.

The study also found that feature numbers rule and business drivers drool: Seventy-seven percent of product teams are evaluated based on the number of features shipped, rather than business metrics such as revenue or customer “happiness.”

The growth of product teams outside the exclusive domain of the CTO or VP of engineering’s domain is a good sign. The survey found that these teams are increasingly embracing cross-functional alignment, away from just engineering and toward other teams, including design, user experience, marketing, and customer success.

The report also found that product teams are less likely to have their product road maps influenced by their competitors. Thirty-five percent cited customer feedback as the primary catalyst for their best feature release, while 20 percent cited competitive product introductions. Additionally, SaaS and hybrid product teams are much more focused on customer engagement and retention.

“Product managers play a pivotal role in shaping customer acquisition and retention,” said Mike Belsito, co-founder of Product Collective, which collaborated with Pendo on the study. “There’s a wealth of places product managers can look to inform product direction. In this study, we’re seeing that the majority of product managers focus more on customer data and customer happiness to make decisions—two foundational elements for product innovation.”

The report, which is available here, is based on a survey of 300 North American technology product management executives and managers at organizations with more than $25 million in annual revenue.

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