If you’re in charge of hiring Product Managers in your organization, here’s a problem that you’ve puzzled over before or you’ll have again soon:  do you hire experienced product managers and teach them your business, or do you hire subject matter experts (SMEs) and teach them product management?  Here are the two key factors to consider to arrive at the best answer for your situation.

1.  Take inventory of existing skills and resources available on your team

What do you have more of right now – SMEs, or experienced PMs?  Your goal should be to have strength in both areas, and provide opportunities to learn from each other.

What’s available in the company to help you supplement the team’s skills?  What systems are in place to help new employees get up to speed on the business and products?  What departments are most willing to set aside time to share their customer and product knowledge?  Are there people elsewhere in the organization with subject matter expertise that are interested in becoming product managers?  

Keep this inventory in mind as you consider factor number two.

2.  Consider your company’s life cycle stage

We classify companies in four stages of growth:  early stage start-ups, first success growth, seeking second success, and established.  Your approach to hiring should take your company’s situation into account.

Early stage start-ups need deep subject matter expertise to make sure the products they develop are well suited to the market.  And most start-ups are small enough, in terms of number of employees, that the product management process can be carried out pretty effectively without a full-time product manager.  So in this situation, I’d vote for hiring SMEs and teaching several key players more about product management process. 

Companies experiencing their first success are faced with explosive growth, both in customer adoption and employee count.  SMEs are in short supply, but professional product management can alleviate a great deal of cross-functional coordination pain in this stage.  Hire SMEs if you can, but know that you MUST dedicate resources to training them in product management process and practices in order to sustain success.  Don’t leave them to figure it out for themselves – you’re wasting precious time and spending their SME credibility.  They can’t meet the organization’s expectations for being a good product manager unless you help with this support.  Look for these traits to make sure you’re hiring an SME who has the potential to be a great product manager.

Conversely, if you hire experienced PMs, you need to find ways for them to get the subject matter expertise and the credibility they will need to be successful in a PM role.  One of my early mentors did me a huge favor (although I didn’t realize it at the time) by putting me in Tech Support for the first 6 weeks I was with the company.  No one could question that I knew customer pain points!  Ideally, you’ll hire a combination of SMEs and PMs, but unless you’re willing to hire from competitors and possibly pay relocation expenses, you won’t find both skills in the same person. 

In the seeking second success stage, there’s a growing customer base and the next logical move is to find something else to sell to them.  Now is when founders truly believe that luck had nothing to do with the first success, and that it will be easy to do it again.  In my experience, that rarely happens.  Now is when you really need to hire experienced product management.  You’ll need to hire for experience in market analysis, building revenue forecasts and business cases, and pitching new product concepts successfully to executives.  Hire PMs who can formulate and articulate strategy.  And who can develop trusted relationships with founders and CEOs (yes, and who you can trust to have direct relationships with these key executives!).  You’re building the company’s bench strength in business management; don’t be surprised if your peers want to steal your people!  

Subject matter expertise is still very important – so make sure you create opportunities for exposure to customers via sales calls, trade shows, and tech support call monitoring.  Make sure your new hires USE the products!  Nothing irritates the rest of the organization more than a PM who has never gone hands-on and can only spout what’s on the data sheet as their product knowledge.

At the established stage, more than two products (not versions, distinct products!) have been launched successfully and the organization is fairly comfortable with a good product management process.  Across the organization, systems are in place to help new hires understand the company’s business and get familiar with product lines.  So you can hire experienced PMs without budgeting extra resources, but you’ll still hire SMEs when you can find them!  And as discussed above, provide them with product management training.  Pair them with a mentor to help them apply their new PM skills in the context of your company’s processes.

Share your experience with hiring choices.  How has it gone right or wrong – what can we learn from your experience?