8 questions CEOs should be asking about product governance
by Leica Ison
If there is one gap I see in businesses of all shapes and sizes, it is the all-too-common lack of ownership of product end-to-end. Best practice product governance ensures each product strategy across the company has a product owner who coordinates the product decisions and tightly manages business outcomes.
Product governance is now an essential requirement for many businesses – in some sectors driven by new regulatory regimes like DDO, MiFID ii, RegBi. More generally, product governance is being modernised across all industries as a critical driver for managing disruption and value creation.
Asking the following questions of your Chief Product Officer CPO will help organisations achieve more from their lifecycle capability and DDO projects in the future and flesh out the gaps at the operational level of your business:
1. How have we operationalised our Product Governance Framework?
Innovation programs and the push for agility can lead a CPO to focus on new product development and experimentation. CPO's and CIOs should balance this effort with end-to-end product lifecycle governance framework and tools that include the active leadership of products across all life stages and distribution channels.
Validate if your CPO has covered the following end-to-end scope in their product lifecycle framework:
1. Product design
2. Product distribution
3. Product monitoring
4. Continuous improvement and record-keeping
If there is one gap, I see in businesses is lack of ownership of product end to end - especially post launch monitoring of product distribution. Best practice ensures each product strategy across the company has a product owner who coordinates the product decisions and reports on business outcomes in each channel. To learn more detail you can join my Masterclass on solving product distribution monitoring and sharing product information here.
The product owner manages that product or portfolio across all lifecycle events, and when someone leaves the company or changes role – knowledge management is a critical handover point. Digital tools enable product managers to set a target market determination TMD and report on its complete lifecycle history in one place to monitor and optimise.
2. Do we have a modern definition of product governance, and can you send me a copy of our documented product governance framework?
Too often, there isn't a connecting link across a product lifecycle - all the manual or partly automated processes across product management activity means it is challenging to find someone responsible for the end-to-end lifecycle outcomes.
What's needed is an end-to-end lifecycle process to get the transparency need at CEO level. End-to-end starts with product governance as the umbrella over your innovation and product management capability. The critical shift is thinking about product governance across three elements – process, tools and mindsets. It's more than product management steps – and, if defined well, speeds up product decision making and alignment.
Thinking about your product governance as a continuous improvement loop is needed to bring documented elements to life. It means putting in the effort to verify and document the phases. The essential features too look for include:
- Product governance stages - design, distribute, monitor, improve
- Steps for new product development and for monitoring existing products
- Controls and approvals that cover product, portfolio and organisational levels
- Collaboration and clear responsibilities between product teams and business teams
- Product monitoring and review cadence that aligns to product value, risk and life stage
- Review triggers and setting of thresholds that cover leading product indicators
- Risk profiling and setting mitigation actions
- Monthly Product Governance Forums for checkpoints and decisions
Successful organisations spend time phasing in a product governance framework and using it early in the product design process. The principles are simple but often hard to operationalise without a digital solution. It takes leadership from CPO and CIO to modernise product lifecycle governance and prepare for regimes like DDO.
3. How do we know when there has been a review trigger or significant dealing across our product portfolios?
CEO's should examine how their CPO is monitoring the products in each portfolio and assessing emerging risks. Review triggers are a modern and effective tool that should be embedded in the product governance framework. Review triggers should cover more than customer complaints and be monitored and adjusted at a product level over time. You can read more about them here Best practice Review Triggers
If there were one report, I would look for it from my CPO, and it would be a Review Trigger report.
The reason is that review triggers and thresholds warn that a product is no longer meeting the target market's requirements. From a risk perspective reporting on the incidence of review trigger thresholds should be included in the monthly CPO report to the CEO. Reporting should also include quarterly comparison and trends at the product, portfolio and organisational level to highlight risky products and risky distributors.
4. What are we using to automate or digitise our Product Design & Distribution Obligations DDO compliance?
Disparate systems and lifecycle documents that are difficult to find are one of the common challenges for CPO. Product teams should have a single source of truth for a product strategy and understand product health status across a holistic set of drivers. If a lifecycle isn't being actively monitored across the set of drivers, chances are you will have gaps or regulatory compliance issues.
'These digital business transformations require product managers to plan, develop, introduce and manage products and services in new ways. They will need to work across multiple developments approaches with a growing array of partners, and with greater emphasis on tools to help improve end-to-end processes."
Gartner New Capabilities for Digital Product Management
Data-driven decisions across a lifecycle lead to value creation. CIO's should be thinking about DDO and the product teams as strategic capability in the business and including a transformation plan to digitise lifecycle management. It makes sense to transform and automate the governance steps using a digital tool, including reporting and record-keeping for each product. You can read about some of the digital tools here Product management, modern tools and DDO
5. How much is our compliance program costing?
Product lifecycle management is undergoing a transition globally from on-premises solutions to cloud-based digital tools. The benefit of this transition is a move to SaaS business models that provide CPO with scalable, cost-effective digital solutions.
Software as a service solution like Skyjed can eliminate the long wait times in product governance and speed up governance. You can watch a case study here End to end DDO compliance in 30 days to see how financial institutions of all sizes are using Skyjed’s product governance platform to quickly and efficiently implement a robust set of product governance processes to satisfy DDO, whilst automating many critical requirements such as complaint record keeping and trigger threshold & significant dealing monitoring.
Using a SaaS solution means it is cost-effective as pricing is based on per active user models and can move up and down as the business changes. The other area to look forward to is an effective customer onboarding program to support getting your digital-first product governance up and running and operationalised in your business.
6. Are there any benefits other than compliance coming from our DDO processes?
Product governance, when implemented well, brings productivity benefits – better decisions around revenue, customer experience and therefore how you differentiate your products for growth benefits – not just risk management.
If your product governance framework is a true end to end solution: product strategy, design, planning, launch, monitor and optimisation – then you will see product management standards lift in all areas.
The majority of CEO's (63%) expect to change business models in the next two years, requiring product managers to fundamentally rethink how value is perceived, created and consumed." Source Gartner
The additional benefit is that product managers new to the profession will be up-skilled, and seasoned professionals will save time and be freed up for the high-value activity; like product differentiation and closing out sunsetting products for a lean cost structure.
7. If ASIC walked in the door now, would they leave satisfied we comply with their DDO?
At the heart of DDO is active monitoring of a product, its target market across all life stages and when events and triggers occur, having correct data to make 1 of 5 decisions about product strategy.
Are your product managers clear about the decisions and how time-critical the decision point is in DDO?
These 5 possible outcomes or decisions are:
- Continue - No change
- Change the Target Market
- Change the Distribution Strategy
- Change the Product Design
- Cease Offering
Keeping records and rationale for each product decision and product review is an ongoing product governance requirement. Organisations are using Skyjed to keep records on each product strategy, including design, monitoring and assessment triggers and reasons a product manager has made a particular decision.
Ready to start improving your product governance today? Let one of our product experts help you. Request a proposal
8. Do we have a change management plan for product governance?
A best practice is phasing in product governance and ensuring CPO has a change management plan. The program should communicate the phased implementation of the product governance framework and clearly define the business owner and responsibilities.
Overall accountability - either CPO or in some business CMO
Oversight of product portfolios and implementation of end-to-end approvals - CPO
Owning the product strategy and execution of all aspects at product level - Product manager
Defining target segments and customer needs - Head Marketing
Reporting on conditions and restrictions for each distribution channel - Head of Sales
Review and sign-off of a Target Market Determinations and Review trigger decisions - Compliance
Sign-off of TMD and monitoring framework for compliance - Compliance
Approval of Target Market Determination and any ongoing changes- Legal Officer
9. Have we embedded continuous improvement?
Digital tools and Ai provide product teams with insights to make better decisions. New concepts like product health scores and the five domains of product monitoring - revenue, value, customer experience, innovation and regulatory - support product teams to improve a product strategy at all life stages.
Continuous improvement ensures that your product teams consider governance beyond the early steps of setting a target market TMD and understand the importance of getting the right insights back from a product distribution channel. This is more than having automated TMD templates. Using digital tools makes it easier to frequently monitor and identify areas to optimise in a product strategy, such as Skyjed's design and monitoring workspace. Product growth strategy requires continuous monitoring and adjustment of the product plan to ensure differentiation, commercial outcomes and compliance.
Digitising product lifecycle governance is a step to scaling your product decisions to be ready for DDO or whatever headwinds we face. If you want to find out how Skyjed can help improve and set up a digital tool for your product design and lifecycle teams to be DDO ready, feel free to get in touch.