Time to hire a Chief Product Officer (CPO)?

Weighing the pros and cons of hiring a CPO at different phases of the company, and some practical alternatives if the timing isn’t quite right. 

In two recent articles, I’ve covered the concept of Companies that “think product” and how a solid Chief Product Officer can go a long way in helping any CEO who wants to get set up for success with their product strategy.

But is there a good moment to hire your Chief Product Officer? Is there a risk of hiring a CPO too early, or too late? In the next paragraphs, we will see how timing plays a major role, and how startups and more established companies shall be conscious of their own pace in the journey to becoming an organization that thinks product.

Funding, C-suite acceptance, and the awareness of the implications of this choice are important elements to the success of your newly hired exec.

While the window of opportunity is usually short and finding the right person at the right moment is hard, alternative solutions exist for companies who’d like to “Think Product” but are not quite ready for a full-time CPO. For instance: 

• new models such as “Fractional CPOs” can help embrace the right direction, without contracting “people debt”, and without rushing the hiring of one of the key figures of your company. 
• Also, acknowledging the “bottleneck” and “product as a discipline” traps will allow you to seek the external support you need, such as product team shadowing and product advisory. 

This article is organized into the following sections:

• Until you get a CPO and when you’re better off without
• The right time to hire a CPO in a startup/scaleup
• The right time to hire a CPO in a more established company
• Differences between tech and no tech companies
• Alternative models to full-time hiring of a CPO

Until you get a CPO and when you’re better off without

If you’ve read until here, you are already aware of the benefit of having product people in your organization. You’re probably still hesitating about the idea of having a C-level executive fully dedicated to the product; after all, you probably already have some product managers and even a few “heads of” product. Do you need a CPO?

In a previous article, I already explained the reasons why having a product organization (including a Director or VP of product) is not the same as elevating a product as a full part of your exec team. In short, if you want your whole organization to “think product” and get user-centricity benefits, … you’re better off having the product represented up to the C-Suite.

However, there are circumstances where time is not just right and you’re better off holding your decision to appoint a CPO rather than rushing it. A rushed decision will likely mean:

• People debt: a rushed hiring, or, even worse, a desperate promotion, means that you will have to deal with additional expectations (from the teams, the C-Suite, and the newly appointed CPO). The cost of reversing is usually very high.
• Difficulty in attracting talent: the best CPOs know how complex their mission will be, and will be scrutinizing your company very closely to understand if the company is ready for them.
• No real empowerment: without real buy-in from the whole C-suite, the new CPO will not have the empowerment s/he will need to tackle strategic and transversal aspects of the product. 

Finally, there is clearly no “one-size-fits-all” CPO:  different products and different growth stages will require different kinds of leadership, strategic, and product skills.

In the next sections, we will see how these aspects play a major role for startups/scaleups and more traditional companies, and how to find the right moment to maximize the positive impact of your new CPO.

The right time to hire a CPO in a Startup/Scaleup.

Peer business leaders, other founders, your teams, and investors have probably already asked you if you’re planning to get a CPO.  While the “external factor” and pressure are common triggers to start looking for an exec-level product person, some internal factors will also indicate that you may need a CPO in your leadership team. The main ones are the “bottleneck effect” and the “product discipline”.

The bottleneck effect:

The first of these indicators for a startup is the CEO becoming the bottleneck for any product and tech decision. As CEO, the product has probably been your most important business until there (after all, at the beginning the product IS the company). Your agenda is now leaning toward strategic partnerships, expansion, and fundraising. The product is your baby, but you have so much more than to look after. 

The idea here is not to move the bottleneck somewhere else (from the CEO to the CPO), but rather to start building the right structure that supports a global “Product thinking” organization. An organization that scales together with the business and that can handle the increasing complexity; a structure that can maintain the focus on the goals and how to reach them, even in case of storms; a product development that is not based on gut feelings, but on repeatable and objective listening of the market.

So back to our original question. Is it the right time to hire a CPO?

I usually suggest the “holidays test” to check how much is the CEO positioned to be a bottleneck. Can the CEO go on holiday for one month, with no drama for those impacted by the “what’s happening next” question (engineering, marketing,…)? Can everybody (engineers, product people, designers, sales…) spell out clearly where the product is heading, without having to ask?

If not, chances are that some work is needed to move from a “one-man bottleneck” organization, into a distributed ownership structure where teams know on their own what has to be pursued, and how to do it. Not only the product managers but the whole organization. This is exactly what a CPO will help you put in place.

Product as a discipline:

When you started as founder/CEO of the company, there was likely only one product and its fate was very tightened to the company itself. Also, in the beginning, your product is what your company lived and breathed. By now, you probably have more than one product to look after, several product offerings, and complex pricing structures. The real complexity relies not only on the tech product itself but also on pricing technicalities, the way you seek customer feedback and do discovery, and the best way to have larger teams structured and interacting.

As a CEO, you can’t be a specialist in all fields: there is a moment when a product becomes a full discipline and responsibility to delegate. For some reason, fewer people believe the CEO can play the CFO role without a track record in finance than those who believe that a CPO can be improvised. 

Why is CPO one of the latest responsibilities that get delegated?

To be clear, whether or not a startup needs a CPO is not a binary question either and is usually a choice full of emotions, hesitation, and risks. At the beginning of a company’s life, it’s normal (and healthy) for the CEO to play the “Product Manager” role; that’s how the first iterations will happen, what will keep everybody close to the customers and the market. The reality is, that the product will likely stay the CEO (and CTO, if one of the cofounders) baby for some time though. For the ones who have kids, you know that forcing the baby out of the arms of mum and dad is rarely a good idea. Or at least, it comes with tears and crises.

In other cases, startups with more than one founder may decide to have another co-founder than the CEO to take the role of CPO. While this is ok in principle (again, as long as this person has enough “focus” on the product function), and may help on the “bottleneck” trap … it’s important to be sure that this person will have all that is needed to manage the product as a discipline (again: would you appoint him/her to a CFO position without a background in finance?). 

So, the reflections in this article equally apply if the CEO or another co-founder has to forfeit his product hat to a dedicated CPO. Note, that other alternatives exist (especially in the case of a co-founder, including specific coaching by a seasoned CPO or a Fractional CPO working hand in hand with this co-founder. More about this in the next sections).

How to make the new CPO role a success

When the time comes to appoint a CPO and perform the product transition from CEO (or another co-founder) to CPO, I suggest looking at these elements:

• Have you as founder/CEO “enough” other key topics to focus on? What is the risk of the “product comfort zone” becoming for the CEO a shelter from some less sexy topics?
• Are you “psychologically ready” as a CEO to delegate truly this part? What would take for you to trust 100% your CPO on the areas you’re willing to delegate?
• Have you selected some “key areas” you want to let go? As a CEO, you’re not obliged to leave the “product boat” in one step. I don’t advocate for rigid roadmaps in product, but this is one of the cases where you want to define the milestones and time horizon of this transition. Is the new CPO focus going to be more hands-on to stabilize the product strategy? Or to setup a new organization? Or to infuse product discovery practices?
• Is the rest of the leadership team clear with and buys into the decision of having a CPO? If you have a technical founder (CTO,…) this will mean a great change for him/her, who is likely used to discussing “what to do” directly with the CEO. Needless to say, this is a major change for both!
• Has the selection of the CPO taken enough “time and thoughts”? Hiring a CPO is something you don’t want to rush. If the fit with the new leader is not clear, or if the “scope” of this new role is not well defined, you want to hold on
• Have you found somebody able to help you find the right CPO?
• Have you done a test? Hiring a “Fractional CPO” is sometimes a better (and less expensive) way of going in this direction, and “learn by doing” with less commitment for you, for your new exec, and… for the whole team!

The right time to hire a CPO in a well-established company.

As a company whose business has been running for years already, the first question you will be asking yourself is “Do we want to be thinking product or not”. Deciding so has a certain number of advantages. In some cases, it’s just a necessity to cope with more “modern” competition. In some other cases, you will just be fine the way you are.

Assuming the choice is made, and your organization wants to put your customer experience at the center of your decisions, you may find yourself in one of these two categories: 

• You already have/had a CPO and you need to find a successor:  the CPO role is a key one, and it’s not unusual to see a relatively high turnover. Why? Well, either you have a very good match or you don’t. You just cannot survive (and your CPO cannot either!) if the match is not there. Pretending is not an option. So, regardless of the reasons that lead to the break (did the organization decide? Or did the CPO leave? Or them together?) this is a great opportunity to ask yourself questions, take a step back on the role and redefine expectations, scope, and “mandatory traits” for your new CPO. This takes time, and, just like after a sentimental break. You don’t want to rush this step. Nevertheless, the show must go on. An interim solution is arguably a better option than a rushed new hiring (more about interim roles in the next paragraphs).

• Your company is embracing a transformation and did not have a CPO, and (similar) responsibilities were scattered among a CTO, a CMO, or were… just nowhere. Here too, is a great moment to take a step back. Going in the direction of starting “thinking product” is a big change, and comes with a non-negligible investment. Product advisory may be a great place to start, and a good advisor will help you define the starting point for your search.
• There is also an intermediate situation, in which your company doesn’t have a unique CPO residing in the C-suite but Product executives reporting into very empowered business units. There are still merits, in this case, to look at the options of a unique CPO, although you can arguably live without it. I went into detail about this particular situation in one of my previous articles. 

In other words, for a more established company, the right time to hire a CPO is as soon as the exec team (and potentially the board) has signed off on the idea of starting to “think product”. From that moment on, a CPO would be a great addition to your exec team. Yet, it is a decision and a hiring you don’t want to rush and sound advisory (from Product exec advisors and/or exec hiring teams) may prove incredibly helpful.

Alternative models to full-time hiring of a CPO

It’s possible that, while the willingness and the commitment to start “thinking product” is there, it is just not the right moment to jump and hire your next CPO. Execs are expensive, and their value is released over time. Also, the transition to a company that “thinks product” will almost inevitably create some internal “disorder” before a new equilibrium comes. Whatever the situation you find yourself in, there is only one thing you have to do: not rush, and look for all your options. Here are a few: 

• Running without a CPO. Let’s be honest, you’ve been running your company without a CPO until now: if the CTO, the CMO, or the CEO are supportive, you can probably continue this way for some time. So, if you don’t find yourself ready yet for the jump, just don’t. At the same time, most probably this will have to change sometime soon, and starting “feeling the water” with one of the other options below may be worth considering.
• A “Fractional CPO”. This is a relatively new term to designate somebody working part-time / You can also use it as a “sparring partner” to an existing CPO, to support specific aspects of an otherwise extremely demanding role. A fractional CPO is a senior executive leader that will work “part-time” (somewhere between 30% and 50% of a working week) for a relatively long time. A company that is just starting its journey in digital products, or that has a not-so-large product team, may well find “for the same expenditure” more value in having a solid but part-time executive to set “the right bases”, rather than hiring a more junior but 100% product person. Also, building a product team requires the ability to create the right structure for the organization, vision for the product, and growing people. Having a seasoned product leader helping in these areas can be an unfair advantage to benefit of! This is a very good option to look at, especially if you don’t know yet when the right moment and opportunity to hire a full-time CPO will come.
• An “Interim CPO”. Differently from a Fractional CPO, an Interim CPO steps in full time (100% of the working week), but usually for a limited period (3 to 6 months). This is an excellent opportunity to benefit from the knowledge of a senior product leader to start putting in place the right fundamentals for your product and organization, keeping the organization in good shape, and looking for a long-term successor without the risk of rushing any decisions. Moreover, an interim CPO will allow you to test what works and what doesn’t in this setup, giving you a great insight into the definition of the role and the traits you’re looking for in your next CPO. All this, without rush. Finally, the Interim CPO can also help you find your next full-time CPO.. or just become the next one if the match is there!
• Personal coaching to the CEO/existing organization: When the traps we mentioned step in, you usually start feeling the “lack of time” to take care of and coach your product team (the “bottleneck trap”), and the increasing complexity of product topics (the “product as a discipline trap”). For the first one, external help in the form of “product teams shadowing” may be a great way to release some pressure from the incumbent, and take care of and grow the existing teams at the same time. To support the most complex elements of the product, on the other hand, you may be looking for specific product advisory help, especially for the most complex topics (pricing, monetization…)
• Internal promotion (ad interim role): Although somebody internal to the organization may give the impression of a “fast ramp-up” (all the tech, product, and organizational knowledge is there), an internal “interim” promotion will come with expectations and frustrations if it’s not made final after a while. That’s probably the least option I would look at. Some options to mitigate the downsides of this option include having a clear duration for the interim role, a clear “what’s after this role”, and agreement on the success metrics to make the position final (if expected to happen), and adequate coaching to the person in the interim role.

Thanks to @alexandra lung, @dominique jost, @roland sieblink for the interesting discussions on the topic and for helping me test some early ideas and concepts of this article.