(These thoughts went out in my weekly newsletter this morning)
Ken Norton has an in-depth article pitching a dual-track product management career path. He doesn’t really speak to the economics, but that’s what I want to address because I think this is all about economics, or should I say, outdated economics.
When I ran Neo, which was an innovation consulting company, we had this challenge of wanting to hire or retain some highly talented individuals in PM, design, or engineering; at the time, salaries from the big tech companies were really starting to spike. Trying to compete didn’t make economic sense. We made money through human labor (charging for our time), so an employee delivered economic value to the firm by: A) selling a lot of business, or B) successfully managing more people. Yes, we also needed successful, well-run projects to continue to keep our brand strong, but that was long-term, indirect value. There was a ceiling to how far that could go, simply given our economics.
I hated that model, and that’s why I didn’t go to Pivotal when they acquired Neo. I was done with running a consulting business. Technology product businesses, on the other hand, have a different economic system. The value you can deliver to the business is not linearly tied to the number of humans thrown at a problem. A small number of people can deliver untold amounts of value. In this context, it makes sense to pay really talented people — those who want to work on asymmetric value creation — a lot of money because they will spot, execute, de-risk, and deliver that big value.
I think a lot of companies are still caught up with the more linear value-generation economics of the past. Manufacturing used to be labor-driven as well. They haven’t woken up to new possibilities. They haven’t re-thought what “good” could look like.
Having a dual-track option for exceptional PMs, designers, and engineers is not just a retention thing, it’s a good business decision. However, for it to be a good business decision, you need to be exploring and exploiting big new areas, or working to crack really hard problems that are holding you back. You wouldn’t want to pay exceptional rates for exceptional people and have them work on normal problems that anyone could work on.
In other words, a dual-track approach should be considered an important part of an effective innovation and growth strategy.
Smaller Thoughts of the Week
- PLG & org structure: I never found time to properly respond to OpenView’s article on product-led growth, but suffice it to say, I firmly, firmly believe this capability should report into product, not marketing, and not the CEO. And if you don’t have a growth and business oriented product leader, that’s the thing to fix. Having PLG teams report anywhere else is a poor workaround that will likely lead to a weaker and more disjointed customer experience and product/business strategy. One of the reasons you have an overall product leader is to have someone thinking holistically about the entire system.
- Title drops: I just watched a very talented female PM go from a smaller tech company to a much bigger one. In the process, she took a big hit to her title. Now, all the large tech companies like to shove everyone down a few notches, but I was shocked at how junior her new title was. I knew she was better than that title. I couldn’t help wonder how much of this had to do with her confidence and negotiation stance. And I think this happens more often with women than men, as a generalization. This is why I find it disgusting that many leaders still approach hiring as a “get away with what you can” mindset when it comes to salary and title. It’s simply a bad way to run a company, because eventually talent realizes what you’ve done, resents it, and leaves. Instead, create a clear skills and salary ladder and stick to it. Don’t let someone negotiate their way out of their proper band, and don’t try to under-pay, under-title someone just because you can. Makes me mad. Almost as mad as non-compete and non-solicit clauses (Earn the right to keep your people, don’t rely on legal intimidation!). Oh, and software patents. Yeah, okay, I guess a lot makes me mad.