Product managers are often likened to CEOs of their product lines. While the analogy isn’t perfect, it provides some rationale for learning from CEOs. What specifically? Leadership, strategy, and influence come to mind.
I was thinking about that as I listened to a radio show about Jack Welch after he passed away on March 1, 2020 at the age of 84. Fortune Magazine had dubbed him “manager of the century” in 1999. He had been credited with turning around an iconic American company in the 1980s. But critics also say “the seeds of GE’s downfall were planted under his tenure.” There’s some truth to both.
Let’s delve into that a bit
Jack Welch took over at GE shortly before the 1980s bull market. He was able to ride the bull and dramatically increase shareholder value during his 20-year tenure. He slashed costs, improved quality, and strengthened GE’s competitive posture. The question is whether his approaches created a foundation for the future. GE Capital became a dominant component of the corporate portfolio. And it began to make risky loans similar to other Wall Street firms before the financial crisis. By the time Jeff Immelt became CEO, the company was already on shaky ground.
What can product managers learn from that?
There are two dominant themes.
1. Context matters.
Welch was in charge of a struggling manufacturing operation at a time when Deming and Six Sigma offered proven ways to improve performance. And he had the benefit of timing to take advantage of a bull market to push toward maximizing shareholder value. “Neutron Jack” slashed thousands of jobs, and rewarded those employees whose performance fit the corporate criteria. That was the current context.
He would face a different challenge if he were starting out today. Manufacturing and finance follow different rules. Even the current attitudes toward work-life balance would make the aggressive GE culture less effective.
What is the context you face as a product manager? Are there industry or macroeconomic trends you can leverage? Think about what worked for you in the past, but don’t assume it will continue to work. Always evaluate changes in the circumstances and ecosystem in which your products exist.
2. Success is more than cost and defect reduction
GE was indeed able to advance the level of quality by applying Deming and Six Sigma philosophies. But the focus was on stockholder primacy rather than on all stakeholders. The Business Roundtable’s statement of corporate purpose recommends organizations commit to customers, employees, suppliers, communities, and the environment, in addition to traditional stockholders.
What does that mean for product managers? They should define product success as more than profitability. Even as more than providing customer value. They need to think in terms of eco-smart innovation. Plan for the future. Your legacy may be what you turn over to your successor.
Read biographies and articles about how CEOs think and act. Apply their insights to your job as a product manager.