Is your company productwashing?
How most tech organizations became the real imposters in the product world.
The tech industry continues to struggle with getting product management right. In an uncertain market, PMs face higher firing rates than any other role, as more and more companies are announcing they're eliminating PMs altogether.
Despite the awareness on product management reaching all-time highs, with a wealth of resources available and great product managers out there, companies are still operating in the exact same fashion. PMs, product leaders, and founders I talk to daily lament the very same challenges companies faced 10 years ago. Wonder why is this happening?
Back to basics, what product management really is
Product management is a business function, and it can exist only at an organizational level, if the company decides to build that function and how it chooses to implement it. To understand if a PM and their team are doing product management right, we first need to zoom out and assess if the entire company has properly established a product function.
This is why I've been insisting for a few years on having a clear and actionable definition of product management, a single sentence that helps draw the line between good product companies and the rest.
Here is the latest version of my definition from the article above:
Product management is the company function accountable for product decisions, ensuring they result from team collaboration, fulfill customer needs, and achieve business objectives.
What is productwashing
Looking at how organizations deal with product management, there are only three types of companies out there:
Companies that need PMs and do product management right. We love you, thank you for existing, and we need more of you! What do these companies look like? In line with the definition above, in these companies PMs actually get to make product decisions, and they do so collaboratively, aiming to solve customer problems and hit business objectives.
Companies that choose not to have a product function. That's perfectly fine: if an organization understands what product management means, but believes they don't need PMs doing all of the above, then they should simply go ahead and operate the way they prefer. Some founders are very successful with this approach.
Companies that put in place a half-assed product management function, or hire a bunch of PMs without even giving any thought to what product management exactly entails. These companies end up in a messy state, having established a product function, but lacking clarity at an organizational level on how to make product decisions and what PMs are there for. I call these productwashing companies.
If you look carefully, out of these three types of organizations, only one is dysfunctional regarding product management: productwashing companies.
The other two, whether you agree with their approach or not, are perfectly functional. Some call case 1 "product-led" companies, and case 2 "sales-led" or "founder-led" companies. I am not a big fan of these labels because they lack clarity and often lead to ambiguity. I prefer to start with a clear and actionable definition of what product management is, and then distinguish between companies with good product management and those without any real product management.
It’s important to note that productwashing companies also include those that claim they don’t need product management, but still employ PMs (the bottom right quadrant, in the picture above). While going into specific examples is not the goal of this article, I will say that in the past two years a growing number of such companies have emerged, and it would be fascinating to know what they think their PMs are actually doing.
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Why companies are productwashing
There are several reasons for companies to end up productwashing, and they are not mutually exclusive. In fact, when I assess an organization, I usually find a combination of these. Despite the entanglement, I am trying to keep the list in order of importance:
Scaling: the single root cause is that founders cannot keep up with handling the growing complexity of managing their products and services, and they are forced to delegate.
Ignorance: the second most important reason is that the majority of companies do not understand what product management actually is.
Control: as a result of the two points above, some founders believe they can hire people to delegate product responsibilities, without giving up what they would never want to delegate: their decision-making power.
Fragmentation: as a direct consequence of all the above, founders believe they can come up with "their version of PMs", because the PM role varies from company to company. This is a fundamental mistake, which is why I like to start with a clear definition.
Shortsightedness: founders underestimate the effort and budget necessary to establish the product function correctly, resulting in hiring the wrong product leaders.
Misutilization: companies hire the right product leader but, not understanding product correctly, CEOs don’t give that person the necessary room and support to establish the function in the right way.
Success: things go well for a number of (other) reasons, companies end up making money, and nobody in their leadership cares if a function they don’t fully understand is operating poorly.
Imitation: as incredible as it may sound, some companies are just cluelessly thinking "Everyone has PMs, perhaps we should have them too? We've got this!”
The damage of productwashing
Productwashing companies are the biggest imposters in the tech world: starting from job descriptions, recruiters and hiring managers liberally use terms like "empowered product teams", "OKRs", "discovery", being "customer-first", and being "data-driven", while they are well aware they aren't doing any of that, and that their many attempts at operating that way have resulted in a gigantic mess.
This disconnect between rhetoric and reality is at the heart of the productwashing problem, and the resulting damage is huge:
Damage to themselves: these companies are dysfunctional at their core, which means they waste money, are overstaffed, have a poor culture, and as a result people hate working there. Don't get me wrong, they may even end up being successful and make money, but they are doing so poorly anyway.
Damage to product managers: some productwashing organizations employ great product managers, only to relegate them to mere project managers. Others build a facade of being “good” product companies, packaged with a fabricated culture, fancy frameworks and tools, while in reality their PMs hardly get to make any product decisions. These skilled product managers pour their heart and soul into their work, yet most people in the organization, from the CEO to sales, from marketers to engineers, don’t even know what their job is. Consider how much product work gets wasted — customer interviews, experiments, analytics— all dismissed because someone at the top chooses to make arbitrary decisions. Thousands of PMs reading this are all too familiar with the deep frustration productwashing brings, and that’s one of the main drivers for them to leave.
Damage to the entire industry: what will a founder or a CEO think of product management, in an industry where the majority of companies trying to establish the product function are a mess? They'll think that it sucks, that it's useless, and that they need to get rid of PMs as fast as they can, or perhaps blend PMs with marketing, or perhaps replace PMs with AI, or with a new coffee machine. In their minds, anything is better than having PMs, and the widespread nature of productwashing appears to justify their misconception.
How many companies are productwashing?
That's a great question, one I get asked quite often, and there’s no ultimate stats here. My sense, speaking on a daily basis to PMs, product leaders, and founders, is that the minority of companies are doing good product management, a fair share of companies don't need and don’t have a product function, and the majority do productwashing.
How many exactly? I would say the split between companies doing good product / no product / productwashing is 10 / 30 / 60. That's based on my experience and, while I've worked with many companies from 3 to 300,000 people, it obviously doesn't hold statistical value.
Want to help in understanding where the real split is? Let's do a very simple poll: is your company productwashing too?
I bet you are now wondering where the part on how to fix this mess comes in. In my next articles, I will continue to explain the impact of productwashing on companies and how to make product management better in the real world. Subscribe to stay tuned, this is going to be fun.
Hi, this is Paolo! I’m a product leader and advisor, helping companies establish and scale product management the right way. I also love teaching product to Master’s at the University of Economics in Prague, and to executives at biz schools like Berkeley-Haas and INSEAD.
Credits: special thanks to Stefano Vergani for being a fantastic sparring partner on these thoughts, as one of the best engineering leaders I know.