How Does a CPO Manage a Product Portfolio?
The Chief Product Officer (CPO) plays an increasingly critical role in a world where future success hinges on present-day innovation. Over the past decade, there has been a significant change in how companies do their product portfolio management and development. With a massive potential to boost, the role of a CPO also becomes lucrative, with an average salary expectation of ₹4,000,000 per year (1). CPOs are tasked with juggling multiple products, aligning teams, and ensuring every product contributes to broader company goals.
In fact, managing a product portfolio is no small feat. So, how do they do it? What does it take to manage a successful product? Let’s dive in and see the responsibilities of a CPO.
What is the Role of the CPO?
Over the last 10 years, the position of the CPO has undergone significant changes. In the past, product managers or leaders of product development concentrated on overseeing particular products or product lines. However, the CPO now holds a more strategic position, often at the executive level. They oversee the entire product portfolio management, where choices not only affect product development but also customer experience, revenue, and overall business strategy. CPOs are responsible for:
1. Defining Product Vision and Strategy
As leaders of the product portfolio management team, CPOs set the long-term goal for the company’s product and align it with business objectives.
2. Managing Product Teams
A CPO oversees multiple product managers and ensures that they are motivated and aligned on the objectives and final goal.
3. Optimizing Product Portfolios
The main expertise of the CPO comes in handy here. They have to ensure the company invests in the right products at the right time, and with the right resources to balance short-term wins with long-term investments.
4. Driving Innovation
Keeping the product portfolio fresh and adaptable in response to market changes is crucial so that the company remains competitive.
5. Engaging With Stakeholders
The CPO needs to collaborate extensively with the marketing, sales, operations, and C-suite to guarantee that product choices are in line with the company’s overarching strategy.
ALSO READ: Why is the Product Lifecycle Important?
How do CPOs Navigate the Complexity of Product Portfolio Management?
The responsibilities of the CPO become increasingly complex as companies expand. Moreover, it requires them to manage various products, markets, customer groups, and teams. Let’s look at how CPOs address the difficulties associated with product portfolio management:
1. Building a Cohesive Product Vision
The very first step in managing multiple products at once is basically building a unified product vision that is in line with the company objectives. At the same time, each product needs to contribute to the bigger picture of the company—driving sales, increasing engagement, or opening up new market opportunities.
The CPO makes sure that each product aligns with the overall company strategy. For example, if a company aims to enter new markets, the CPO might consider products with high scalability. Conversely, if the goal is to retain current customers, the CPO might focus on enhancing customer experience and improving core features of existing products.
Ultimately, this clear vision guides product managers and ensures that while they may be handling various products, they are all working toward the same ultimate goal.
2. Innovation vs Optimization in Product Portfolio Management
When overseeing a wide range of products, one of the most crucial responsibilities of a CPO is to balance innovation with optimization. It is important to understand that as innovation keeps the product portfolio competitive, optimization of existing products delivers value. The CPO needs to balance the following categories of products:
a. Innovative Products
These products frequently carry high risks but also offer the potential for high rewards as they seek to tap into new markets. The CPO meticulously allocates resources to ensure that these products receive sufficient backing without excessively tying up the company’s resources.
b. Core Products
These products are the company’s bread and butter because they drive the majority of revenue. As a result, the CPO must ensure they receive the correct amount of attention in terms of updates, support and market share. Additionally, these are the products that maintain customer loyalty.
c. Sunsetting Products
As the name suggests, sunsetting products are the products that are in the phase of discontinuing production. Occasionally, the CPO must make tough decisions about products that are no longer useful. Essentially, sunsetting a product (phasing it out) frees up resources for more promising projects. Moreover, the CPO ensures that this is done strategically without having any adverse impact on the customer base.
3. Prioritization and Resource Allocation
Prioritization becomes an important exercise when you are into product portfolio management. There will always be new ideas, new markets and new opportunities to grab. However, there won’t always be enough resources to tap into these opportunities. The CPO’s expertise comes into the picture here. They need to make difficult decisions on prioritizing products and that requires a deep and intricate study of the company’s goals, customer needs and market trends. A popular approach to prioritization is using the Kano analysis model, RICE (Reach, Impact, Confidence, and Effort) Scoring Model, and cost-benefit analysis.
ALSO READ: Do Product Prioritization Frameworks Work in the Real World?
4. Cross-Functional Collaboration
A CPO’s success hinges not only on their ability to manage product teams but also on their ability to collaborate across departments. They uphold strong connections with leaders in engineering, marketing, sales, and customer support because product decisions can impact the entire organization in various ways.
5. Metrics and KPIs
As a CPO, it is essential to continuously monitor the performance of each product and its impact on overall business success. Furthermore, it involves using metrics and Key Performance Indicators (KPIs) to gauge progress, pinpoint problems, and make well-informed decisions.
6. Continuous Improvement
A sign of a good CPO is that they know that product management isn’t a “set it and forget it” job. Instead, they work on a product continuously to improve it as and when the need changes. In fact, product teams are encouraged to follow the “change is the only constant” mantra. They learn from failures and optimize products based on feedback from customers.
This approach involves regular:
a. Product Reviews
Assessing the effectiveness of products and making changes in them with regard to present business objectives and market circumstances.
b. Customer Feedback Loops
Gathering feedback from customers on an ongoing basis to make sure that the products are addressing genuine issues and providing value.
c. Competitive Analysis
Monitoring competitors closely to discover potential opportunities or threats and adapting the product strategy as necessary.
By embedding this culture into the organization, the CPO ensures that the company’s products remain relevant, competitive, and impactful.
ALSO READ: A Complete Product Analytics Guide to Help Grow Your Business
The role of the CPO, therefore, has evolved into a highly strategic position. They have to navigate complex product portfolios and align them with broader business goals. Moreover, their ability to collaborate across departments, prioritize resources, and measure success through key metrics makes them indispensable in today’s world. If you are an aspiring CPO or a product leader looking to enhance your skills, IIM Kozhikode’s Chief Product Officer (CPO) Programme offers the perfect opportunity to step up your game. This one-year online programme in association with Emeritus provides a hands-on approach to product management. Additionally, it also includes a capstone project that ensures you are business-ready. You gain practical experience and insights that drive product and company success.
So, enroll today and take the first step toward mastering the art of product portfolio management.
Write to us at content@emeritus.org
Sources:
1. Glassdoor
