If you've been a Product Manager or is about to embark on this marvelous career path as we here at ProductManagerJobs.com have, you'll soon know that a lot of things we do as Product Managers are learned in-situ, in-practice.
You won't necessarily find this on paper, in various courses you take or how many other product managers we meet with or speak to. You almost always have you find your own way because no two products is the same! Similarly, no two product teams is the same -- they are like snowflakes, unique and distinct.
In product managers' "training" we are told typically the version of what is needed to be a "Product Owner" in the Scrum Methodology. The other version is that Product Managers naturally evolving out from the business or IT side and depending on which they lean-into their strengths.
If you work in a large organization, you may or may not do strategic work of your may only be responsible for part of the execution of part of the app.
If you work in a larger team, you might be the product manager of product managers, who oversee, advice, align etc.
All this is well and good.
But no matter if you're at a 5 person startup or a 50000+ global enterprise, one thing that I think most novice Product Managers fail to ask is related to money.
No, I don't mean salary, bonus, equity or benefits (though that is super important too as we know Product Managers make and is becoming a lucrative profession) I mean to talk about how your team is paid, how your partners are paid and how you are paid.
I don't think the phrase "Follow The Money" was said by attributed to any single brilliant mind, but seems super obvious and self-explanatory to those who are doing any kind of forensics.
I think probably Audit Accountants said this a lot or journalists trying to uncover some deep corruption in the halls of such and such. Following the money is super important for a variety of reasons but I have personally found it is probably the most important question.
Unless you are the part of the Founding team of a startup and you dovetail as the Product Lead, you are likely to be paid by someone or something. Actually, Founders have to be compliant with the Board or Investors (should they have any) and likely would technically know the money is coming from somewhere but that's a special case and I digress.
Just like everyone is any organization, Product Managers work in that hierarchy. While the organization structure or org. chart is important to comb over during your interviews into Product Manager jobs, I'm arguing here that it's more important to follow the money, see where it leads and understand it at a deep level before you make the leap into this role (should be provided an offer).
So I kind of lied, sort of. There really isn't just a number one question but a cluster of questions around how the pieces that make up your product team and surrounding that team gets funded. So here's the series of specific questions on this topic that you should ask to obtain the full picture.
As much as we'd like to think that all companies have adoption Agile Methodologies and Agile Mindset, the practice of it in a larger, legacy organization is challenging and slow to change. We'd be kidding ourselves if we'd think that money is not important even for the mega-cap large digital/software companies of the world that spits out tens of billions in free cash flow every year for their shareholders. The reality is that there needs to be an accounting of how funds are used and why -- it's always been that way.
Traditionally, what has happened is that products have been funded by projects. If we get back into the mindset of proJECT management then it spells doom. (I could be wrong, but correct me below in the comments if I am and give us an example of how it worked for you.) But what I have seen lately is that Products are now funded by projects which still have a go-no-go every quarter, ever half year or the typically annual budgeting process.
This is not an article to call out what I think are flaws to this process (though I also can't think of a better alternative unless the whole company and leadership is committed to this paradigm shift) but more important want to bring it up so you can bring it up in your interviews.
Why is this an important question?
It'll help you ask the following questions: Who are the stakeholders/departments you need to work with to obtain funding? What is their stake in this product? What are their requirements? Typically, if you follow the money, you'll also find the same people making requests -- and rightly so.
Though, this is less important, but it'll give you some insight into who is the one doing the paper work to get the funding and ultimately who or which department is the one hiring, firing for those on the Product Team.
I've found this to be important and useful because while most Product Owners or Product Managers aren't direct people managers, it give you insight into who is your functional partner that forms the teams of developers, designers, analytics, architects etc.
Sometimes because of how the product is funded, it affects the dynamics of the team -- either the product managers are the ones paying for the team and beholden to them somehow, or the product team is paid by IT but the product manager isn't and there is a converse shift in dynamics there.
It's critical to know who is the one incentivizing who. We may be a cohesive product team on paper, but subconscious we all work for who pays the bills and keeps the lights on.
This kind of came out the last section of this article, but who pays for me is important too. By that you can figure out are you paid for within the proJECT budget? There's some implications there.
Alternately, the answer could be the following: No, you are paid for by the Product Management functional area. That could be promising. No, you're being paid by the "Business".
It's good to know so you know who YOU are beholden to or report to if things go wrong.
I've been in a situation at a larger company where even though my functional group was who I conducted by year-end reviews with, my placement in the organization was with product and all with people from IT or the Business. Hardly had any relationship with my own functional team members.
The opposite is know if your salary/hour rate is coming out of the project budget. Some little nuisances like that can shift your attitude and behaviors as a Product Manager.
Say, for example, you are a PM that needs to charge with the funds that are allocated to this product. You might subconsciously try to find ways to cut corners as you more focused on the current funds rather than the people, users, customers that you serve.
It's a small change in incentives but a massive difference taken on in the hours, days and months you work on this product.
The reality is that Product Management is not a function that exists solely in textbooks. When Product Management theory hits Product Management in-practice, the reality is that we need to consider how we measure our performance, how do we measure our output with the influx of funds given. The more layers in your organization, it's likely directly proportional to the amount of time you need to spend in understand the payment structure.
It's especially important asking these questions BEFORE you take on the job so that you understand the financial dynamics and the behavior dynamics that comes with every organization and product team.
Follow the Money.