How do you identify the ‘right’ time to bring in a CPO? And how do you do so effectively?
We sat down with Marty Cagan, prominent thought leader in PLG and Founding Partner of Silicon Valley Product Group, and took a deep dive into the dynamic between CPO and CEO, and more.
Here, we’ve got some of the key highlights from the session, but if you want to listen to the full interview, simply click below. 👇
Q: What has your leadership journey been like?
A: Well, it definitely started on a different path, the first 10 years of my career were as an engineer and I loved writing software. That's what I went to school for and I learned to program at seven years old, which, for someone my age was really unusual. It's not unusual today, but I was way on the front end of that.
But I had a father who was actually the first in the US to PhD in computer science. The perfect person to teach you how to program. That was just a lucky break is what it was, so I love writing software.
Q: Does where you are today look anything like where you thought you were going to end up?
A: All I knew is I wanted to work on cool products and I wanted to apply technology to solve problems. So I loved the whole idea of being an engineer. I would say though, the thing I got luckiest with is, I am almost embarrassed to say this because I was so naive but for the first 10 years of my career at HP, every single day, I had at least one manager who was there to help me get better at my job.
They viewed coaching as the number one responsibility of managers. I thought that was just normal. Sometimes I even had more than one, they were like one was teaching me engineering leadership, and one was teaching me product management.
But I thought that was normal. It wasn't until I left HP, and joined the real world outside of that bubble that I realized, and I still meet people today that have been in their job for 10 years and have never had any coaching, at all. I'm like how in the world do you learn? Well that's the problem. They don't learn.
That to me is one of the biggest crimes in our industry, so many people have no help to learn how to do this well. The root of that, of course, is so many people have never even seen it done well.
I actually recommend Google for a lot of people for their first job because they have a very similar culture. It's very much about empowering your engineers, empowering your teams. And they have some great managers and leaders that have been there, done that, and are really committed to coaching.
So it's a great place to learn the craft and then especially if you want to go build something, you can do it, you've got the tools.
Q: True or false, do you agree that most CEOs and business executives have no idea why you would hire a CPO or what a CPO does?
A: Well, as long as we separate, there are people that are CEOs of tech-powered companies, and those that are not. If you're a CEO of a company that makes perfume, they probably have no idea what a CPO is, they understand marketing, for sure, they understand packaging and all those things. But no.
But in the tech-powered world, probably 95% of them that I meet do know what a CPO is. Now, they might not have done the job. Some of them have, but they know generally what it is, their most senior product person.
Usually, for tech-powered companies, they understand what engineers do, designers, product, they kind of understand these competencies.
Q: It seems like a lot of executives that I speak to don't really understand what a Chief Product Officer does outside of that tech cohort. Do you agree?
A: Yeah, I think what you're seeing is just a symptom. They don't understand the necessary role of technology. That is the thing that's going on. They view it as a cost center, if you view it as a cost center, you're like, "Why do I need a CPO? We have a CIO, they build our features, we're fine".
And there are many, many manifestations of that problem. So CPO is just one on a long list. That's the real issue. I see companies like that all the time and like you said they should... they don't realize they're a tech-powered company.
We can pick any industry, but look at pretty much any car company around the world and compare them to Tesla. Tesla is a company, they make cars, but they're a tech-powered company. They know that. The rest of the industry? They make cars and they pay whatever they have to pay so that their stereo works or whatever, they don't really think of it as a way to constantly increase the value of this car.
Q: I was talking to a CPO recently, he didn't know that he would want to be the first CPO at a company, because it can be so difficult. What are your thoughts on this?
A: This is a very wise person. Because what he's realized is that if he's their first CPO, he is probably being brought on board in order to drive this transformation. That's what it means almost certainly between the lines.
Now there are certain people I know that this is what they love. They literally love, just like there are some CEOs that are turnaround artists, there are some CEOs that are transformation artists. That's what they do. They love to transform. They don't want to join a company that already does this well. They want to 10x the company's value by transforming them.
So it just depends, but realize that's a very different assignment, then we're already a tech-powered company, and we want you to lead us on some great new generation of products. Those are two very different jobs. I think your friend just figured that out along the way there.
Q: Do you see yourself as a great transformation artist or does that actually make you uncomfortable?
A: The one thing I always say to people who tell me they want to do this transformation is the most important thing is the CEO. You have to see if the CEO is just delegating this to you and saying you worry about it? Because that's almost certainly going to fail, or is the CEO really understanding that he or she has got to drive this.
And CPO is a critical role there along with, by the way, the CTO, those are the two that really are going to make it happen or not. But without that CEO truly engaged, it almost never succeeds.
Q: What do you think the most important question a CEO should ask a prospective CPO, CTO, or vice versa?
A: I have a lot of these conversations with CEOs because there are many different situations here. The situation we were just talking about is let's say you're a CEO, and Amazon has just put the fear of God into you, you're worried that they're going to come after your business.
You thought you were fine but now you're not. So now you're scared and your board is probably starting to wonder if you're even the right CEO. You're like, "Okay, we need to transform". Now you're looking for a CPO and a CTO that knows how to do that. You're going to be supportive, but you don't know how to do it, probably.
So you're hiring the CPO and the CTO that have been there, done that on a transformation. Those people are awesome. I know quite a few of them, like I said, people that live for those transformations. But that's what you're interviewing for. It's like telling me that time you did this last, tell me I want to know all the obstacles you encountered, I want to know how you dealt with them.
You're trying to be convinced that this person knows what they're talking about. That's one scenario. Another scenario is, look, we built this company and this new model, we're an internet era company, we are already transformed. The problem is we've grown like crazy. I was the founder, I was essentially the head of product and we've built a real business now. But now I have no time. I can't do everything that's required.
We went from 25 engineers to 200 engineers, I literally can't be in every room, I cannot be on every zoom call, I need real help. Now the person is looking for a Chief Product Officer who can partner with that CEO but this is where it gets a little interesting.
Does that founder want to continue as the real spiritual head of product? In most examples that I meet, when the founder was the one that built that original product, I tried hard to convince them that they should do that. Now, of course, there are two issues here.
One is, are they good at that? And the other is, do they want to do that? And sometimes they say I want to but they're really not good. Sometimes they don't want to and I have to convince them they should.
One of the things that often helps is, I totally relate to not having enough hours in a day. So a lot of times, what they really need is a COO that can cover the operational side so that they can stay heavily on the product side. There's a lot of very successful founding teams and CEOs that are like that.
Q: Is there a time where the CEO should become the CPO? Should they then bring in a new CEO to lead the business?
A: Not often, but definitely it's a thing. There are people that found companies because they want to change the world, they want to make a dent and they absolutely love product.
Then they find, this is such a common dinner conversation, they say "I get like two hours a week to do that. I have to deal with the investors constantly. I have to deal with finance constantly. I'm worried about office space, should we get rid of our offices? I'm worried about legal issues" and they're like, "I feel like I'm not doing anything that I love to do".
I've had that conversation. It's a real thing.
Q: What do you say?
A: My first answer to that is the COO. It's like if you were to find that partner, and by the way, a lot of founders, they're co-founders and they already have that partner merging, but if they don't, and they're in this situation, I'm like, if you were to find a COO that you could offload all of that stuff to, you'll still have to give talks to investors and stuff but that's not your issue.
Your issue is you've got two hours a week for what you really love to do and what you think is most important. That's the first answer. Sometimes, of course, the board is what's really going on, the board is like "Well, the problem is we want to take you public but you don't have the credentials, and we really want to put a quote professional CEO up there, a marquee name", which you can almost hear the sarcasm in my voice.
I worry a lot about that. There's a lot of red flags there. Because a lot of times those people ruin a company. It's very hard to take over as CEO. One of the few times I actually saw it done well was Eric Schmidt at Google. Because Larry and Sergey were doing it, they were covering the two roles and they ended up bringing in Eric Schmidt but there was something about him that made it work for 10 years or so.
He kept the magic of Larry and Sergey, which was really the heart and soul of where so much of their good stuff came from. But he also helped the company grow and put things in place that they needed to scale that beast. So it's not impossible.
But that was a pretty special and unusual hire. The classic ‘bring in the MBA’ does not usually have that happy ending.
Q: Tell us a story about a great founder and CPO relationship.
A: There are lots of good examples, depending on those use cases, or those situations we talked about before. Probably the most interesting ones for a lot of your listeners are you've got somebody running the company that realizes they need help.
If they don't think they need help, they're just going to continue it as they were, but if they realize they need help, and they bring in somebody. One of my favorite tech product companies now is TrainLine.
A few years ago, TrainLine was a classic, old-style, from a long time ago, sell your train tickets on a kiosk or something. There was actually a private equity firm that realized that should be a great company, so much potential if they just started taking products seriously.
They brought in a CEO from eBay, actually, and that CEO brought in a head of product and a head of technology. The three of them set about transforming TrainLine from classic IT, small, tiny little sort of nominal engineering, it's hard to even call it engineering, obsolete technology stack, all that stuff.
Introduced serious professional engineers, introduced real product design, introduced a data science team, introduced product management. Over a few years, they turned that place around completely.
In fact, last year, they were the UK’s most successful IPO. The head of product there is a longtime friend, his name's Jonathan Moore, I first met him many years ago when he was an early product manager on BBC News and BBC Sports, which were major properties at the time.
Then he went on to really do some great work at The Guardian and then head of product at TrainLine. The relationship the CEO and the head of product had was such a healthy dynamic, there was so much work to go around, as you can imagine when you're trying to transform an old company like that.
But between the three of them, I can't ignore that the head of technology had a massive job as well to take obsolete technology, change the engine mid-flight, give them a whole new foundation, and just turned it into one of the best organizations I've seen.
So that's what you're really looking for. To their credit, the private equity firm knew that's what was gonna be required so they put the wheels in motion and they put the funding in for that to happen. But fundamentally, it happened because those three did what they needed to do.
Q: You've had a remarkable string of successes but if today you could do anything, what type of project would you want to tackle?
A: It's a good question, for sure. But one of the things I learned about myself over the years is that I get bored with any one project fairly quickly. I think once you've done this long enough, you're like, "Okay, the interesting part is done".
I crafted a life for myself where I'm an advisor to many companies and I feel like that way I get to participate in the fun parts of many companies. I think I'm hitting 19 years and a couple of months, it's remarkable I've been able to do this so long.
Every year, I'm like, "God, I'd be thrilled if I could get one more year before this disappears". But I'm able to do what I really love to do. I have five partners that are all the best in the world at what they do, former Chief Product Officers, so they do the hard work with companies and I get to write and I get to advise.
So honestly, I'm doing that. I get to travel to the teams. I'm unusually lucky on that front.