Who should your Product Manager report to?

Tim is a passionate product manager at a steadily growing tech startup. His innovative ideas and strategies are often met with skepticism from his boss, the CTO, Mark, who was more focused on the technical specifications and feasibility of the product than its market potential. Feeling unheard, Tim approached the startup’s CEO, Emma, with his concerns. Emma, co-founder and primarily commercial-focused leader, was sympathetic but unable to provide the day-to-day guidance and support Tim needed. While she understood the importance of product management, her capabilities and experience were more aligned with sales and business development.

Tim found himself frustrated between these two perspectives, struggling to balance the technical and commercial aspects of his role, leaving him with the question of where a Product Manager ideally should report.

Understanding the Product Manager's role

Before diving into organizational structures, it's crucial to define the product manager's role. While often conflated with the product owner, these are distinct positions, albeit within the broader scope of product management. The product owner typically has more direct authority over a product's development, often within an Agile framework. Their reporting structure often aligns with the development team. The product manager's role, in contrast, is more strategic, involving market analysis, product lifecycle, product vision, strategy, and cross-functional collaboration. Their reporting structure can vary significantly based on company size, organizational culture, and product complexity.

• Product Owner: Typically focused on product vision, prioritization, and backlog management. Often reports directly to a product manager or project manager.
• Product Manager: Has a broader scope, overseeing the entire product lifecycle, from ideation to launch and beyond. May report to a CEO, CTO, VP of Product / Head of Product, or other executive.

The CEO as the ideal reporting line

While there are exceptions, the CEO is often the ideal reporting line for a product manager. This direct connection ensures that the product aligns with the company's overall vision and strategy. It also empowers the product manager to make decisions without being influenced by departmental biases. However, this structure requires a CEO who understands the product management role and who is capable and committed to investing time and effort in its success.

+ Strategic alignment: Ensures the product aligns with the company's overall vision and strategy.

+ Autonomy: Provides product managers with a high degree of autonomy and decision-making power.

+ Visibility: Increases the product manager's visibility within the organization.

- Time constraints: CEOs and are often busy with high-level strategic decisions and may not have time to provide day-to-day guidance to product managers.

- Potential for misalignment: If the CEO does not have a strong understanding of product management, there may be a risk of misalignment between the product strategy and the company's goals.

The VP of Product / Head of Product as the second-best reporting line

A VP of Product or Head of Product can be a valuable alternative reporting line for a product manager, especially in larger organizations. They provide dedicated leadership and support, ensuring that the product manager has the resources and guidance needed to succeed. However, in startups and scaleups, this role may not always be available due to limited resources. In such cases, the product manager might report directly to the CEO or CTO. While reporting to the CTO can provide technical expertise, it may also lead to a focus on technical features over market needs. Therefore, even in the absence of a VP of Product or Head of Product, reporting directly to the CEO is often a better option than reporting to the CTO.

+ Dedicated leadership: Provides mentorship, guidance, and support to product managers.

+ Specialized knowledge: Can offer deep expertise in product management.

+ Alignment with product strategy: Ensures the product manager is aligned with the overall product strategy.

- May not be available: This role may not be available in smaller organizations.

- Limited exposure to senior leadership: Reporting to a VP of Product or Head of Product may limit the product manager's exposure to senior leadership and broader company strategy.

The CTO as a potential alternative

Reporting to a CTO can be advantageous, especially in technology-driven companies. The CTO often has a deep understanding of the product's technical aspects and can provide valuable guidance. However, there's a risk of becoming overly focused on technical details and losing sight of broader market needs. This can be mitigated by ensuring the CTO is supportive of product management and understands its strategic role.

+ Technical expertise: Provides access to valuable technical insights and guidance.

+ Strong alignment with engineering: Ensures a close relationship between product and engineering teams.

+ Shared vision: Can foster a shared vision for the product's technical direction.

- Focus on technical aspects: May lead to a focus on technical features over market needs.

- Limited market exposure: The CTO may not be as exposed to market trends and customer needs as the CEO or COO.

- Potential for conflicts: If the CTO and product manager have differing priorities, it can lead to conflicts and hinder product development.

Other reporting options

While the CEO and CTO are common reporting lines, other options exist, provided these positions are filled by competent individuals, each with its own advantages and disadvantages:

• Marketing: Reporting to marketing can provide valuable insights into customer needs and market trends. However, there's a risk of becoming too sales-focused and losing sight of the product's long-term strategy.
• Development: Reporting to development can ensure a strong alignment between product and engineering. However, it can also lead to a focus on technical features over market needs.

Factors influencing the best reporting structure

The optimal reporting structure depends on several factors:

• Company size and stage: Startups may have a more fluid structure, while larger companies may benefit from a more formalized hierarchy.
• Product complexity: Highly technical products may benefit from a closer relationship with the CTO, while products with a strong marketing component might be better suited to a marketing-led structure.
• Organizational culture: The company's culture and values can influence the preferred reporting structure.
• Individual product manager's strengths and preferences: Some product managers may thrive in a more autonomous role, while others may prefer a more structured environment.
• Talent and resources: The availability of talent and resources can constrain or enable certain organizational structures.

Final recommendation

The ideal reporting structure for a product manager is not one-size-fits-all, however when possible, product managers should report to someone with oversight of both product and technology e.g. a well-informed VP of Product. This avoids situations where product and development clash over priorities and lack a clear path for resolving disagreements.

While the CEO is the preferred choice, other options can work well depending on the circumstances. The key is to ensure that the product manager has the autonomy, support, and resources needed to drive the product's success.

It's essential to consider the specific context of the company, the product, and the individual product manager.

As you ponder about Product and explore the potential within your product management practices, remember that you're not navigating these waters alone. We, the 25Friday team, are dedicated to guiding tech companies through the maze of product strategy. With our expertise in consultancy and nearshore development, we partner with organisations to fine-tune their product vision, align their teams, and craft strategies that resonate in today’s dynamic market. Reach out to us, and let's work together to turn your product challenges into successful ventures that stand out in the tech landscape.