The Capital Equipment Product Manager

Table of Contents

• Introduction
• Product Management Defined
• CEO of the Product Line
• What Product Managers Do
• Traits of the Greats
• Where They Come from

Introduction

Of the items listed below, which do you think is the best indicator of a successful capital equipment company?

• The best sales team
• The best manufacturing capability
• The best customer service
• The best product

Without a doubt, it is the last one. Excellent sales, manufacturing, and service capability will not get you far if you do not have great products. But in the capital equipment world, so much can go wrong in your battle to supply those great products. Any capital equipment professional with a bit of time under his or her belt has experienced at least one of these:

• The product that engineering designed is not the one you intended.
• You cannot secure target prices.
• Customers have changed their requirements. There is nothing in your development pipeline to address them.
• Nobody knows how to service your legacy installed base.
• The competition is better than you thought.
• You miss your market share goals by a mile.
• The new product is six months late.
• Material costs are higher than planned—much higher.
• The product worked in the lab but could not meet its specifications at the customer’s site.
• Regulations changed. Your product is now non-compliant.
• An essential spare part went obsolete before you had a substitute.
• Your demo system is down, and the customer is in the lobby.
• The sales team keeps chasing the wrong prospects.
• You are involved with every sales situation.
• Salespeople do not know how to defend your product’s value.
• Your sales pipeline is empty.

Each of the above is a product management failure. Of course, you can assign each failure to a supply chain, engineering, marketing, sales, or service bucket. But somewhere in the chain of events, someone fumbled a hand-off, misunderstood requirements, or did not communicate.

Product Management Defined

It may be helpful to think of product management as a sandwich. Market intelligence and product lifecycle management are the bread. Product strategy and product marketing are the meat and cheese. Then it is all wrapped in a value-based strategy. See Figure 1.

Where:

• A value-based strategy seeks to create more financial value for the target customer than alternative offerings and then extracts fair, profitable compensation for that value.
• Market intelligence gathering refers to the never-ending effort needed to develop a deep understanding of the customer and the competition.
• Product lifecycle management is the process that marshals a product from idea to end-of-life.
• Product strategy determines what products to offer, to whom, and when.
• Product marketing generates customer demand and develops the ability to substantiate your value proposition, competitive advantage, and price in a sales cycle.

Product management is the coordination of all the activities required to ensure the commercial success of a product.

CEO of the Product Line

While it takes a team to design, build, test, and market capital equipment, one person is crucial to producing a winning product. It is the product manager.

Product managers are the individuals responsible for the commercial success of a product or a product line. Their business cards might say “Product Manager.” They might also say “Product Line Manager,” “Marketing Manager,” or “Product Marketing Manager,” or some variation thereof. The title does not matter. What does matter is the vital job product managers perform to ensure a product line’s profitability and growth.

The product manager is the individual responsible for the commercial success of the product.

Product managers operate as the chief executive of their product lines. Even though they do not have the hierarchal authority enjoyed by a company CEO, the best product managers fully embrace this role. No excuses.

What Product Managers Do

To ensure the commercial success of a product line, a product manager will gather market intelligence, manage the product lifecycle, develop product strategy, and execute product marketing. That translates into an extensive to-do list that includes:

Market Intelligence

• Establish and execute a voice-of-the-customer process.
• Develop and articulate a thorough understanding of the target customer’s business and how your product affects it.
• Build and deploy a competitive intelligence system.
• Establish deep, enduring collaborations with industry leaders.
• Be an active member of the industry community.

Product Lifecycle

• Marshall products through product lifecycle stages.
• Coordinate engineering, program management, operations, and customer support efforts to execute product strategy.
• Establish management and control processes to ensure product line performance.

Product Strategy

• Develop value models to quantify the product’s effect on the target customer’s profitability in the context of the product’s price.
• Develop and achieve consensus on product strategies that will create unique value and achieve commercial success.
• Drive an aftermarket strategy that delights customers and increases profit.
• Create market requirements documents that articulate the business case and requirements for developing new products.

Product Marketing

• Develop and deploy sales and marketing content to attract customers and substantiate the product’s value proposition.
• Equip the sales teams with the selling tools, product demonstration capability, and training they need to win orders at value-based prices.
• Respond to sales team’s requests for information, selling materials, and in-person support.
• Develop and execute marketing campaigns.

Traits of the Greats

Great product managers are a rare breed. They are confident experts on their customers, competitors, and products. They do not thrive on executive power. Instead, they are obsessed with creating products that deliver superior value to the market. The capital equipment industry’s best product managers exhibit the ability to:

• Lead and inspire an organization to achieve common goals.
• Communicate precisely and concisely.
• Advocate outside-in thinking that emphasizes customer perspective and competitive context.
• Understand complex capital equipment and its applications.
• Distill copious amounts of data into recommendations and decisions.
• Deal with ambiguity.
• Frame decisions in business terms.
• Develop and maintain robust relationships with team members, management, customers, peer companies, and other industry participants.
• Maintain focus on long-term objectives.
• Avoid drowning in day-to-day tactics.

Where They Come from

In many industries, products and their applications are much less complex than in the capital equipment world. Most consumer products fall into this category. In these industries, the typical product manager has a business education. They usually arrive at the product manager’s position via sales or junior marketing roles. Their careers from the earliest stages have prepared them to deal with the commercial aspects of product management.

In contrast, capital equipment companies source most of their product management professionals from their technical ranks. Typically, equipment product managers have a technical education, often at the graduate or post-graduate level. They usually begin their careers in a technical role, such as product development or applications engineering. Then somewhere along the way, management recognizes their clear thinking, customer affinity, and communication skills and offers them a product management position.

These competent professionals have the technical education and experience necessary to master complex capital equipment and its applications. Technical aptitude is a must-have capability to succeed as a capital equipment product manager. Without it, it is difficult, if not impossible, to establish credibility with technically inclined customers and internal engineering teams.

However, capital equipment product managers also need commercial skills. These are the skills that enable you to make sound business decisions, grow market share, and increase profit. Specific skills include:

• Forecasting
• Creating business cases
• Analyzing competitors
• Building value models
• Developing product strategies
• Marketing products
• Setting and defending product prices

Product managers who have followed the technical-role-first career path should always be on the lookout for ways to augment their commercial skills.