Episode 194: From Product Leader to CEO with Mercedes Chatfield-Taylor
What makes a good leader in these times we live in? And what does the pathway from product leader to CEO look like? I recently had the chance to speak again with Mercedes Chatfield Taylor on the Product Thinking podcast to rack her brains about these very subjects. Mercedes, who leads Artico Search, has a wealth of experience in placing high-level executives within tech companies, making her an invaluable resource for understanding the nuances of product leadership.
Over the course of our chat, we delved into the evolving landscape of CEO roles, particularly for those coming from product backgrounds. Mercedes highlighted the significant shifts in what makes a great CEO today—especially in a climate that demands efficiency and collaboration across teams. She also shared her perspective on the qualities that set successful CEOs apart, emphasizing the importance of understanding the customer and fostering teamwork within the executive ranks.
If you’re eager to learn about the strategies for transitioning from product leadership to the CEO position, or if you want to grasp how to cultivate a collaborative culture within your organization, this episode is packed with wisdom and well worth a listen.
You’ll hear us talk about:
02:12 - From Growth At All Costs to an Efficiency Focus for CEOs
Mercedes highlights a crucial shift in the CEO landscape from a “grow at all costs” mentality to a focus on profitability, sustainability, and scalability. She explains that the most sought-after CEOs today are those who have successfully managed transitions to profitability, while maintaining operational efficiency. These leaders know how to get the most out of lean teams by fostering collaboration across departments like sales, marketing, and engineering. In today’s business environment, it’s no longer enough to grow; CEOs must do more with less and lead cross-functional, highly collaborative teams to thrive.
25:42 - The Importance of Building Strong Relationships with Sales
Mercedes highlights the importance of a Chief Product Officer (CPO) working closely with the Chief Revenue Officer (CRO) and sales teams to succeed in transitioning to a CEO role. She emphasizes that CPOs need to have a deep understanding of how products are sold and should actively participate in sales processes, including joining sales calls and interacting directly with customers. This hands-on experience with the sales cycle not only provides empathy for the challenges of sales but also makes the transition to CEO much smoother, as it fosters stronger alignment with revenue generation. Mercedes shares an example of a CPO who successfully made this transition by building relationships across the organization, eventually becoming a CEO highly respected by sales teams.
42:14 - CPOs Can Thrive as CEOs in Any Industry
Mercedes argues that CPOs are natural successors for CEO roles across various industries, not just in SaaS or product-led growth (PLG) companies. Whether in finance, automotive, or real estate, a CPO who understands the product deeply and has strong commercial acumen is well-positioned to take on the CEO role. She cites examples of successful transitions in industries ranging from fintech to automotive, emphasizing that CPOs who work closely with sales, marketing, and finance and who are exposed to board-level discussions can smoothly make the leap to CEO. The key is ensuring they round out their skill set with experiences beyond product management.
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Intro - 00:00:01: Creating great products isn't just about product managers and their day-to-day interactions with developers. It's about how an organization supports products as a whole. The systems, the processes, and cultures in place that help companies deliver value to their customers. With the help of some boundary-pushing guests and inspiration from your most pressing product questions, we'll dive into this system from every angle and help you think like a great product leader. This is the Product Thinking Podcast. Here's your host, Melissa Perri.
Melissa - 00:00:37: Hello, and welcome to another episode of the Product Thinking Podcast. Today, I'm joined once again by Mercedes Chatfield-Taylor, who is the co-founder and CEO of Artico Search. You may remember Mercedes from our first chat about what it takes to become a chief product officer. And today, we're going to talk about something different, how CPOs are actually primed to be great CEOs, which is a trend that she's been observing out there in the industry and that I've seen as well. So we're going to talk all about what you need to do to position yourself to become a CEO and why you might want a CPO to become your CEO. Mercedes is an expert in executive search. She's worked with some of the largest investment firms, PE and VC-backed, all over the world, even public companies, to place their executive team, their board members, and their CEOs. So I'm excited to dive into that with her. But first, it's time for our segment on Dear Melissa. This is the part of the podcast where you can ask me any of your burning product management questions. Let's see what we have today.
Dear Melissa, I'm the sole product manager at a very small startup. I worked in both startups and large product organizations in the past, but this is the smallest and most early stage of a startup for me so far. In the last few months, our leadership team hired a product consultant to come in and help us revamp our development cycle, helping us with pushing our initiatives forward. The consultant recently brought up that he believes that the product manager is the CEO of the product, and that product managers are responsible for the financial success of the product. I feel conflicted because at a startup, there are many people who are involved with the direction of the product, and this doesn't really feel exactly right. I believe that product managers can influence and drive the direction when we're positioned for success, but ultimately the vision is not the sole responsibility of a product manager. To me, our CEO is the CEO of the product. I also feel like the financial success of a product, especially at the startup early phase level, it's dependent on so many factors, such as sales, marketing efforts, product market fit, and customer success support. I'd love to say my decisions as a PM are the direct cause of our future financial success, but I feel like that's not the case. That's a huge stretch. My question to you is, how do you feel about the product manager is a CEO of the product mentality? As a product manager, when I'm told that I'm responsible for the financial success of the product, how should I respond and what can I truly influence?
So this is a conversation that comes up a lot. And I write in my book, Escaping the Build Trap, that I do not believe that the product managers are the mini CEOs of the product. Now, there are some nuances to what you're asking here. When we talk about mini CEO mentality of the product, what happens more often than not is that I see product managers adopt this mentality of everybody has to do what I say and I can control it all, right? I don't have to consult with people or influence or bring people along for the journey. I just say what goes. And it turns them into like little kings that just go around and order people around. I do not like that mentality. Now, there is something about taking ownership for your product, right? And as a product manager, you do have to take ownership for the direction, for the vision of your product and what you're going after. But that focus and how broad that scope is changes for what level you are in the organization. So if you're a product manager on a team like you are in the small company, you are not actually responsible for the overall P&O. Let's say of the product. That's really the founder's job, right? That's a CEO's job here because there is no VP of product ahead of you, right? When you're in early stages, you're usually hiring a product manager. You're putting them out there and they're going to execute. Now, should you be worried about the business outcomes and the financial success of what you're building? Absolutely, right? You should really care about that and you should want to show how you contribute to it with product. But that doesn't mean that you're responsible for the entire financial success of the business. A lot of that can feel really intertwined.
At these super early stages, because you're probably a small team, there's a lot of success going on, customer success, there is sales, there's all these different pieces and untangling what's product versus what's not might be tricky. But you want to really evaluate your product and improve it from a perspective of how does this product contribute to the financial success of the business? And then how do those other pieces actually interact with it as well? Like if sales isn't doing their job to close people and bring them to the organization and get them. Onto your product, right? Get them to sign the contracts. There's not much you can do when the sales process sucks, unless the sales process sucks because your product sucks. There's some intertwining in there, but you have to separate out what's facts versus what's not facts. So this consultant, I feel like give you not great advice for the stage of the company you're in. They are right. However, when you're at scale and your chief product officer is responsible for the financial success of the products, that's when you become a C-suite member. As you move up in the maturity of your product management career. And when you become an executive, you are financially responsible for the success of the product and the portfolio. But you have a lot more sway and you have a lot more power in these organizations to make changes. To say, hey, sales isn't doing their job. We should think about another salesperson, right? You are an executive. You are a leader in this organization. And you're allowed to make these decisions about vision and about strategy. If you are not owning the strategy of the product as a sole product manager in an early stage startup, which is usually the fact. It's usually a founder owning.
Then you should not be responsible for the entire P&L and financial success of the product. That's ridiculous. Now, if you have. Full direction over the product vision, you're allowed to do whatever you want and make those decisions, yeah, you should be held accountable for the financial success of this product. That's where it goes, right? That's the span of influence that you have. And that's the difference between being a product manager on a team versus being a product manager in an organization that's 3,000 people and being in the C-suite. If you're in the C-suite, you are an executive and you are a steward of the outcomes of the business. As a product manager on a team, you have a smaller scope. You have smaller things that you can actually control. And if you are not solely responsible for defining the strategy of that product, somebody else is, you're not to be held accountable for all the financial success of the product or the financial losses. Now, should you worry about it and should you be prioritizing it to be successful? Yes. You should be informed about how your product actually contributes to the financial success of the business. You should be monitoring it. And to get better and more senior in your career, tying how your product improves the finances of the business is what you should be doing. So you want to tell that story. But here's where accountability lies. You are not solely accountable for this. You want to have some control and some ownership over what you're doing here. But if you are not the head of product, the P&L does not rest with you. And usually in an early stage company, the founder is the head of product. So I think it's unreasonable to say that today.
If they gave the same advice to a chief product officer overseeing 40 product managers sitting in the C-suite of a $40 million ARR business, I would say you are to be held responsible and to be held accountable for the financial success of the product. It's different levels. It's different scope. This is not your scope. So I hope that helps. In this situation, I think you should... Define who is responsible for the strategy and vision and say, if you are going to be held accountable for the entire financial success of the product as a mini CEO, then you should have the say over the strategy and the last say over strategy. I bet you that doesn't fly with the CEO or with the founders. And then that's your thing. That's how you can influence here. All right, so I hope that helps. If anybody else has questions for me, please go to dearmelissa.com and let me know what they are. Now, let's go talk to Mercedes. Are you eager to dive into the world of angel investing? I was too, but I wasn't sure how to get started. I knew I could evaluate the early stage companies from a product standpoint, but I didn't know much about the financial side. This is why I joined Hustle Fund's Angel Squad. They don't just bring you opportunities to invest in early stage companies, they provide an entire education on how professional investors think about which companies to fund. Product leaders make fantastic angel investors. And if you're interested in joining me at Angel Squad, you can learn more at hustlefund.vc/mp. Find the link in our show notes. Welcome, Mercedes. It's great to have you on the podcast again.
Mercedes - 00:08:46: It's great to see you, Melissa. Good to be here. Thanks for having me.
Melissa - 00:08:50: So for those of the people listening who haven't heard your first podcast, where we were talking about becoming a chief product officer, can you tell them a little bit about what you do?
Mercedes - 00:08:59: Sure. So, Mercedes Chatfield-Taylor. I run Artico Search. I've been in search for pretty much my entire career, focused on leadership roles with a particular emphasis on venture-backed, private equity-backed, scale-up companies. So, through well-passed product market fit through to IPO or some type of exit. And we've put chief product officers, chief marketing officers, chief revenue officers, close to 100 CEOs over the years into emerging and now public companies. Also board work and investor work. So, that's sort of me at the flyby. And then from a domain perspective, we work across B2B SaaS. So, a lot of B2B enterprise, enterprise SaaS, enterprise infrastructure, enterprise AI. And then we also do and have done a fair bit of at-scale consumer so companies like Spotify. Lots and lots of marketplaces, work, travel, entertainment. So pretty rangy.
Melissa - 00:10:03: So Mercedes, for those of you listening, is my go-to recruiter that I call whenever I work with a company that needs a chief product officer because she understands product super well. And I found that other recruiters out there sometimes do not know what they're looking for, but she is fantastic at really getting the right people into these companies. And last time, Mercedes, you were on here, we talked about how do product people find their path to chief product officer, which is a really hot topic. But one that's been coming up a lot lately, too, is people who want to become CEOs out of the product realm. And what have you been seeing out there when it comes to how the CEO landscape is changing and what makes a great CEO today?
Mercedes - 00:10:44: Yeah, I mean, look, the macro is definitely challenging at the moment. And so in general, what I will say is that people who have run rule of 40, even rule of 50 organizations, so with an emphasis on profitability, sustainability, repeatability, scalability. And I think the days of grow at all costs are gone for the moment. And so we've seen a real emphasis on that. So people that have taken companies through transition, transformation, and gotten them to profitability and some type of outcome are highly, highly sought after. So that's one piece. I'd say the other piece is that there is an emphasis on do more with less. And so people that have run really, like I talked about, rule 40, rule 50, but also people that just know how to run efficient, effective, scrappy organizations and have held multiple hats. So really get the organization working together. Collaboration has become increasingly important. And it's no longer like a fuzzy thing. It's like, how do you bring together the best leadership in sales, marketing, product, engineering, finance in a lean team environment? So that's been a big change over the past. I'd say two years.
Melissa - 00:12:05: That's a really interesting one. And to me, the most effective CEOs I've ever worked with or seen are really good at making the executive team like one team. But I've worked with some that are, I don't think they came to a path from a CEO, you know, a CEO path from leadership. They just became a CEO because they were a founder. The worst ones I've worked with have kind of pit everybody against each other, right? Like where marketing was pitted against sales and sales was pitted against product and tech was pitted against product. And I've never seen that be successful. So I'm happy to hear that this collaborative piece is coming out in the market.
Mercedes - 00:12:39: It always should have been important, but in leanly resourced organizations or properly resourced organizations, it is, everybody has to be a GSD person, basically, which is one of my favorite. Wonderful founders who took his company public. Talks about, which is essentially shorthand for get done person. And so the culture shouldn't be able to sustain people that don't have goals and objectives. And in order to, you know, execute on those goals and objectives at any type of scale, you need teams that work together. And again, shouldn't be obvious, but it's just become more and more important. Yeah, I think there's some, as a segue, there's some obvious things about product leadership and really phenomenal product leadership and being at that center of the organization that can lead to being a great CEO. And it spans the gamut from really working cross-functionally to coming to every meeting with the customer strapped to your back and really understanding the customer. And, you know, spend five minutes in Google or look through, you know, Twitter feeds and you'll see everybody from Elon Musk to the former CEO of Google, Eric Schmidt, talking about working together as teams and focusing on product. Focus on product, build, build, build, build product. And who better to build product than chief product officers?
Melissa - 00:14:05: So if somebody wants to become a CEO, what's the path that they should look at?
Mercedes - 00:14:10: Yeah, really good question. And so let me just take a step back. There are three sort of really primary paths to CEO that are, and there are outliers. I'm sure after this podcast, we can think of 15 other outliers. But the big ones are the go-to-market CEO. So somebody who's come up the ranks of sales, generally sales, taken on a CRO role, taken on a president role, and become a CEO. And we can talk about what those gaps might be when they become a CEO. Second one is finance. So chief financial officer is the outward-facing chief financial officer, not the accounting type, but the strategic CFO who then becomes a COO or president and then becomes CEO. And then the third is product. So the product manager who becomes a product leader, who becomes often a chief product officer, who becomes a COO or president, who becomes a CEO. So the steps are similar in terms of starting off as an IC, becoming a manager, taking on more responsibility. That's the typical path. What I would say to address the question of gaps, particular to CPO, and we just did, I just finished a CEO search where we hired a CEO who in our first meeting told me at my heart. I am a product person. Like that is what I do. I'm a product person. I will address the... The company from a view of, you know, what is this product? Who is our ICP? What's our market? The question for a first-time CEO who comes with that mindset is generally not dissimilar from the other two folks, but, you know, how will they communicate with the board? How will they learn that board communication? How will they manage their board? So that's one gap. And that's any first-time CEO generally. Two is, will a chief revenue officer? Will a phenomenal chief revenue officer report to this person comfortably, happily?
And, you know, the flip side of that same question is, can you hire as a CPO a great enterprise, if it's an enterprise SaaS company, let's say, or a great SMB to mid-market, whatever it is. If it's a sales-driven company, a great CRO. Can you hire a great CRO, and will they report to you? And then the third and final piece. This is just around the holistic view of the company. And again, not different, a little bit different from CFO, because CFO is one of the roles. CEO, CFO, chief people officer should have a view of the entire organization, right? Chief product officer doesn't necessarily have as holistic a view of the entire organization. And so how will you run finance? How will you oversee the entire administration of a company? It's a broader role. It's a broader role. It is chief product officer. So then, like, how do you close those gaps? On the board piece, and I tell every product person, every chief product officer to look for a board seat. You know, do not wait until you are a CEO to go look for your board seat. There are plenty of opportunities to be voice of the customer, voice of the market, voice of tech at a strategic level at the board seat in a board seat in a company that is non-competitive with your company. So what are your strengths? Where can you add value?
And what are you interested in and get that board seat so that that will start to close the gap between. Have you interacted at the board level? You know, how do you communicate at the board level? Have you seen great CEOs communicate at the board level? The second obvious one there, I hope it's obvious, is participate in your own board meetings. Be that partner to the CEO, to the CFO, to the CRO, to the CPO, people officer, to the CTO, and collaborate at the board level. Collaborate for those quarterly board meetings. Make sure that you have a voice at those board meetings and talk to your CEO about why you want a voice at those board meetings. You want a voice because you have aspirations to be a CEO. You want a voice because you want to participate. You want to lighten their burden. If a CEO should be thrilled to have her burden lightened by... Somebody who wants to do some of that board comm. And most people, most CEOs will, once they trust you, will allow you to participate. So that's one area, the board piece.
Melissa - 00:18:51: You mentioned before that CPOs can think about being COOs and president and then go on to be CEOs. In some organizations, there's not even COOs anymore. I feel like I've seen a bunch like that. Not that that's a good thing. But what's the difference between a CPO, a COO, and a CEO? In a lot of companies, I think, where people are being introduced to those roles for the first time, I've found that CEOs think there's a lot of overlap, especially if they were like a founder CEO, between a CPO and a CEO, especially after scale. Like now they're big. You've got a couple thousand people, but the CEO is still like, I don't get it. If the CPO is doing this, what do I do as a CEO? And then I guess the same thing with a COO. How do those three roles differ in larger organizations? And what are the different types of skill sets you would need for them?
Mercedes - 00:19:36: And this is such a common path. The CPO, it's a COO, president, and the delineation of, look, I mean, it's not a clean delineation of duties, but let me talk through a little bit. And this is probably, I mean, I could give you 50 examples, and you could look at any major private equity firm, any major sector, and the leaders of that sector, and you could pull up at least a percentage of the COO presidents who come up the product ranks. And if you look at CEOs who've been promoted up recently, in the last couple of years, the list is long. VMware, exactly, new relic. I mean, the list goes on and on and on of folks that have been promoted up into that CEO role. So a chief product officer, we talked about what the span of control is. What are they missing? They're missing revenue. They're missing finance. They're missing generally under the rep. In revenue, they're usually missing pre and post as well. They're often missing marketing. And so depending on the organization, when the chief product officer takes on the COO role or president role, there's a difference often between president and COO too. President, think more commercial, more go-to-market. COO, think more operational. So think more post-sales, pre-sales, engineering product, less sales, marketing. And so you're going to have to round out your skill set completely if you want to be CEO. So I think in terms of what we've seen for COO, and we'll combine them for a minute. What we've seen in terms of COO and president is that a product-oriented leader might take on product marketing. So the CEO might say, look, we want to focus on brand marketing. So we want to focus on messaging, positioning, PR, brand. So we want a brand CMO. So we will take all things brand, commercial brand, internal brand, employee comms. And put that under the office of the CMO.
We will take product marketing, product management, often post-sales, pre-sales, and put that into a COO-type role, present-type role. So those are some of the functions. And once the COO and the CEO will still handle CFO, it's very unusual for a CFO to report to a COO, though it does happen. You will see COOs report to CFOs, but generally the CFO, HR, and finance will stay reporting to the CEO. Everything else will report to the COO. So that's one of the cleanest ways to think about it. So GA reports to the CEO. Everything else reports to the COO. And there are lots of variations on that. But typically the product leader looking to progress will pick up some of those go-to-market functions, sometimes even marketing, with the exception generally of brand. And again, the other thing I would say is that there's no shortage of things for the CEO to do. In this market, the CEO needs to think about investor relations, whether they're public or private, board relations, whether they're public or private, strategy, so how do they fit in the overall ecosystem. They're making build-buy decisions with their COO, with their CTOs, but they're also really making those build-buy decisions, partner ecosystem decisions. So there's plenty for the CEO to focus on.
Melissa - 00:23:19: So if you're a CEO and you do have a COO, you've got a chief product officer reports into the COO, you've got your CFO, everything like that. On a day-to-day basis, what's your job look like when it comes to strategy, talking to customers, investor relations? We talked about the investor relations, the board part. Like, what are you responsible for? Like, what are you putting your effort into to make sure the team is running well?
Mercedes - 00:23:45: So the CEO is ultimately the top salesperson for the company. So the CEO is constantly selling the company. They are selling the company to investors. They are selling the company to employees. They are selling the company to potential employees. They are selling the company to the partner ecosystem. They are the voice of the company to the public markets or the private markets, depending on the company. They are also running the general administration of the company. They are making sure that the P&L of the company overall makes sense and that they are optimizing for profitability, right? So particularly in this market. So you are running the company as a CEO. You're making sure that your financial house is in order. You are making sure that you are best positioned with all your constituents, both internally and externally, but particularly externally. You are making sure that you have a very clear and coherent three to five-year plan that's articulated to your board. That's part of the columns. And that you are executed on that plan at the macro level that you are executed on that plan. You also have to be able to helicopter up and down. You have to be able to work with product. You have to be able to work with engineering. You have to be able to work with sales. You have to be able to work with marketing. You have to be able to work with your people function. But your number one priority as CEO is to be the face of the company, the voice of the company. Understand your customer at all times. Understand the risk manage. Constantly evaluate the risks. The SWOT test. The SWOT analysis has to be ongoing, particularly in this market, but in any market as CEO. And then really driving that relationship at the board level to make sure that, you know, as a CEO, you serve at the leisure of the board.
So to make sure that the board is engaged around ideal customer, making sure you're in front of those customers, strategy, ideal strategy, make sure that you're executing on that strategy, and make sure that the finances are all shored up. And that's a huge job. Like, that is, that's a huge job. And if you're a public company, you know, managing expectations, particularly in this market, very tough market, right? So making sure that you communicate in a consistent. Coherent, easy to understand way with your most important stakeholders so that you avoid, you know, some type of hostile takeover situation or anything else that can happen, you know, in this market probably more often than others. So the CEO is focused on all of those things. The COO is going to be making sure that the day-to-day operations of the company are allowing for the execution on that strategy and vision. And you are, and as the COO or president who wants to be CEO, you are learning what great looks like from that CEO, ideally, until the time that you feel that you're ready to go do it yourself.
Melissa - 00:26:45: I've always heard it put to where like the CEO is the outward facing person, right? And you need a COO who stays home and right looks after the operations to make sure everything in-house is going well. When you're thinking about the two different types of people to do that, do you find that all COOs usually make good CEOs? Is that like a normal path if you want to be the internal person, not necessarily the external person? Or is there anything about that?
Mercedes - 00:27:10: No. In fact, that's why I was saying there's this, the obvious CEO succession plan is a highly commercial, externally focused person who has also been able to keep the trains on the tracks to a degree, right? And when you progress into that CEO role, the day-to-day operational burden of running the company doesn't go away, but you make sure that you have a succession plan. So, when you move into your CEO role, that you have somebody that can take over as president COO, and not every organization needs a president COO. You can have, you know, superb leadership and have a great cross-functional team, which you need anyway. It's not absolutely required, but it is required that you know that you cannot be an internal, you shouldn't be an internal trains on the tracks, only operational COO. You want to be, and that was one of the things we should talk about, like the, if you look at path to CEO, it's not by becoming a Six Sigma operational wizard. While those things are great, it's not the path to CEO. The path to CEO is an evolution of that path to being a commercial CPO. So, if you are a CPO and you want to be a CEO, it's continuing to hone the commercial aspect, You already have the product and technology understanding. You already understand product roadmap and executing on that product roadmap. Understanding who your customer is, understanding voice of customer, understanding how to use data to make decisions, understanding how to have a strategy and then execute on that strategy. And what are the KPIs? What is the data to make sure that you are? Hitting those milestones in a way that makes sense beyond just the product roadmap, but now moving into the company roadmap.
And one of the ways to fill in the, like, if you look at folks that have moved from product to CEO, they almost inevitably will have had some GM responsibility. Will have had a product TNL. Will have worked very closely with the commercial team, if not run a part of the commercial team. So worked extremely closely with the CRO's organization from the top down and bottoms up. Worked extremely closely with finance around pricing, packaging, partnership, right? Understand the product profitability from life across the life cycle, from inception to end of life. Have made build-buy decisions. So all of the things that you do that make you a great product leader and a great commercial product leader, understanding the macro. I mean, the best product leaders are never creating product in a vacuum. They're understanding why their product exists. They are understanding the total addressable market for their product. They're understanding the competitive landscape. They're understanding the trade-offs between building and buying the technology. So those are the things you can fill in to, if you look at anybody from Sundar at Google to like the exactly CPO I mentioned, they have had general management, broad responsibility. They've owned product marketing. They've owned positioning. They've owned revenue so that they're not going from. The flip side of this, Melissa, is I've interviewed hundreds of chief product officers. And some of them, as I'm talking to them, want to be CEO, but it's so clear that they have not touched the other parts of the organization in a way that will allow them to manage those parts of the organization. They will be over their heads if they try to move from where they are today to CEO.
Melissa - 00:31:15: Did you know I have a course for product managers that you could take? It's called Product Institute. Over the past seven years, I've been working with individuals, teams, and companies to upscale their product chops through my fully online school. We have an ever-growing list of courses to help you work through your current product dilemma. Visit productinstitute.com and learn to think like a great product manager. Use code THINKING to save $200 at checkout on our premier course, Product Management Foundations. It's a really good point. And it kind of gets back to something I wanted to ask you about. You mentioned that if you want to succeed as a CEO coming from a CPO role, you have to be able to attract and hire a great CRO. So what have you seen make CROs go, no, I don't want to work for that person, right? If they come from a CPO background.
Mercedes - 00:32:05: Let me address it on what would make them want to work for that. One of the things I always tell clients to align around on is hire for strengths, right? Like everybody, if you haven't found a weakness in somebody that you're interviewing for a role, then you haven't dug enough, right? Everybody has a weakness against every spec. But... A first-time CPO who is ready to be a first time CEO who is ready from the CPO spot will have worked very, very closely with several CROs, will have empathy for how products are sold, will have empathy for how the sales organizations operate from the top of the funnel all the way down to the end of product life. So, you know, if it's a land and expand organization, they will have worked with their CRO and with that CRO's selling team post-sales as well. So if your product is sold on a consumption basis, for example. So just really understanding how sales supports the revenue and drives the revenue for the organization and what the challenges are in selling your particular product and product sales. And the market. Is incredibly important. Go on sales calls with your CRO. There's absolutely no reason that a CPO should not be in front of customers if they're a commercial CPO. If you haven't been asked by your CRO to join on a sales call, Why not? And I'm sure there's a reason, right? So get in front of the customer as part of the sales team. Get in front of the customer and sell your company's products that you are building. Get in front of the customer. Get in front of the customer. I mean, that's the number one thing is get in front of the customer. Support the sales organization, be part of the sales organization. Even if you don't work in the sales organization, be part of the sales organization. That then makes the transition really very seamless.
There was a, I won't say his name, but there was a wonderful CPO in the Insight portfolio who we put into his second CPO role. He had had a... Significant accident in his first one. And he... Took on more and more responsibility exactly in this regard. He was called on by the CEO, by the CRO, to go into all their major customer meetings. He became COO. He then became CEO of a startup. He's now CEO of his second startup. Great CROs want to work for him and with him because he has tremendous empathy for selling. He hasn't actually carried a bag himself. So that's just another, I think that's get in there with the sellers, sell with the sellers, align your team from a top-down, bottoms-up perspective with the sellers, and create that sort of one organization mentality. And then it's really easy to, easier to make that transition. And then from a tactical perspective. You then have two to three CROs in your roster over the course of a career before you become a CEO who you've worked with, who would want to work for you or with you. And as with the entire organization, if you think about a thousand person organization, a thousand person SaaS organization, let's say that 40% is go-to-market. And if you've worked with 40% of the organization and kept up that network, that's a network of potential CROs. And so if you sit down with someone like me and I ask you as CPO who are great CROs, who you would want to work with again, and who might want to work for you, if you can't rattle them off, then you have work to do.
Melissa - 00:36:07: That's a good lesson for people to get out there and start working with their sales team too. And it's true. The best CPOs I've ever worked with are almost the connector, right? Sometimes I find that they might come and work for a CEO who maybe would be a first-time CEO, maybe didn't know how to connect. But the experienced CPOs I've worked with who have just blown me away, they've come into the executive team that was all like, oh, I didn't like product and I didn't like this or whatever. And then six months later, they're like, oh, this CPO is great. Like, I want to bring him to every sales call. He's fantastic. I want to work with him all the time. And it's amazing. It's amazing what one person who knows how to bring people together can actually do.
Mercedes - 00:36:44: A hundred percent. It goes back to what we were talking about before about being a connector. And so, you know, the best CEOs are incredible aligners of talent, right? They're very, very good at aligning great talent. To get the job done and getting folks to work together. In a way that's, you know, the parts are bigger than the... Individual pieces, right? And so the sum of the parts is bigger than the individual pieces. And that's just not an easy thing to learn overnight. And I think for a CPO moving into a CEO role, if you create those alignments early and often, it will become very obvious when you're ready to be a CEO. Like it just will become very obvious. And that's why that path from product to CEO has been so famously successful, is those folks are at the center of the organization. They naturally want to solve problems. They're not, you know, most CPOs that I know who have been incredibly successful in this regard. Yes, they wanted to be CEOs, but they weren't motivated by that and connecting people. They were motivated because they wanted to get their great product out into the hands of their customers. So if they saw an issue that they could lower the friction around sales, they would work on that. If they saw an issue around product marketing, messaging, positioning, pricing that came naturally, of course they would work on that. They would work with their CMO. And again, you can look across anything from cyber companies to infrastructure in general, to B2B SaaS, vertical and horizontal, to consumer, right? Everything from like Tom Hale running Aura to the new-ish CEO of Bumble who comes from Slack and Salesforce. These are all product people, product leaders who are ... Maniacally focused on the customer. Everything else stems from that.
Melissa - 00:38:46: When you're thinking about CEOs, and we're talking a little bit about the skills that they brought to the table, I find that a lot of people want to be CEOs. Because they want to be the person like the buck stops with, right? They want to be able to control. Let's put it that way, right? Control all the decisions and get into that. And I think there's a perception that the CEO, of course, the CEO has a final say, but the CEO is the person who can make all the decisions. I also see people with this perception that the CEO has to be this visionary market leader where they can tell all the trends that are going to happen and see the innovation come out. How do you feel on those different lines when you're looking for good CEOs? Like how much visionary do they need to be? How much control do they really have?
Mercedes - 00:39:33: Yeah, I mean, I think no one person runs a company at scale, right? So a CEO has a board of directors. They report to that board of directors. They are one of those board members. They are not the board. So from a governance perspective, if you have a great board of directors, the company is run by the CEO, ultimately, yes. But the board has helps and influences and enables. I would say a CEO, particularly now that we're moving or now that we've moved from a grow at all costs to a rule of 40, rule of 50, run profitable, sustainable businesses, vision is phenomenal. But we need operators. Like the last three CEO projects I've done since the market is corrected have all, actually four I've done since the market is corrected, have all been focused on excellent operators. So who are the operators? Who can go in and make sure this company is firing on all cylinders? Yes, they need vision. Yes, they need strategy. So they have to be strategic visionaries. They have to have that, you know, cliche growth mindset, but they really do. You know, you want somebody who wants to think about ways to constantly be growing the company. What are the accretive ways to constantly be growing the company? Because if you're not growing, you're by definition shrinking. And if you're shrinking as a business, you're dying, right? So strategy, vision, and execution all have to come together in one body. Incredibly important. You can't just have a visionary CEO. Well. If you have a visionary CEO who's all vision, you need an incredible operational team around that CEO and that can be successful. But when we're hiring a CEO, we're really looking for that balance between amazing vision and strategy, strategic chops.
And one of the things you're constantly asking of a first-time CEO is how much of the strategy and vision did you set versus the CEO you worked with or versus the founder you worked with, right? So strategy and vision are always going to be important. Growth mindset is always going to be important. Operational excellence is going to be, are you an operator? Can you get in there and fix the problems that need fixing? Ruthless prioritization, absolutely ruthless prioritization, which is, again, why I think product leaders can be so great, right? Not everything is a priority. Priority is equal priority. Like if you get into a company that's having financial challenges or is flat or declining, there are some things that have to get fixed or you're not going to be making payroll, right? So ruthless prioritization, which goes back to the operating piece. So all those things are incredibly important. Modern leadership, you know, being very data-driven. I think the days of flying people around the world constantly and taking them out to lunches and dinners and calling it good. Are? You know, behind us for right now, these things are all cyclical. It'll come back. But at the moment, it is really about. Strategy, vision, executional excellence, modern leadership. And then, you know, I think the other piece is that if you think about running a company, what's the hardest part? What's the hardest part of running the company? It's not the technology, right?
It's not the financials of the company themselves. Like, that's a math problem. It's the people. The people are the hardest part of any company in terms of scaling the company. And so somebody who has the cachet. To deliver that vision and message and get the troops sort of aligned and excited. If you look at any successful company, you'll see somebody that was able to not just be a visionary and be strategic and be operational, but also let the team know their role in executing on that strategy and vision and getting people really excited about the mission, getting them aligned so that they're going to want to spend. I mean, if you think about it, like. You know, you spend more time with these people than you spend with your own families. You're giving up a lot. And so you want to get a lot and you want to give a lot. And so those are the kind of CEOs that I think everybody looks for. It's that. Magical balance of gravitas. Vision strategy, empathy, and an ability to pull everybody together.
Melissa - 00:44:04: You just mentioned modern leadership. What have you seen change, let's say, over the last 10, 15 years from how we approached leadership before? I think everybody thinks of CEOs like, oh, I went and got my MBA and I run it exactly like how I was taught in school. And now we've got different ways of working. We've got remote going on. We've got a lot more things happening along, a lot more software strategies coming into large companies too, not just SaaS companies. What do you mean by like modern leadership? What has changed so significantly from the way that we used to manage companies?
Mercedes - 00:44:35: There's literally books written on this. The quickest way to articulate it from my perspective, and this is just my perspective, is that companies used to be much more command and control. So, you know, come into the office during these hours, sit at your desk during these hours, do this job. And if you do those things at that desk during those times, you run a good chance of getting promoted. To the next level, right? Companies became quite decentralized over the last 10 years before COVID, right? And then with COVID and this real sea change in the way that we worked, it's hard to take that back now. It's hard to say, okay, your company is now headquarter free and now we are going to have a headquarters. So I don't want to get into the debate of should we be in the office or should we not? But there are very few companies that look like they did 10 years ago. And even those that are still running in similar models are, from a human capital perspective, quite different. So less command and control, more empowerment, way more data, more live real-time data. So I think CEOs, even five to seven years ago, could be less in the data. And today, we expect CEOs to be in the data, to manage with the data, to understand the data from their customers down to their bottom, bottom line.
There's the speed with which we iterate, there's the data with which we work, and there's the decentralized kind of organization that is quite different. Again, I think there's like ebbs and flows in this. I will say... Three years ago, people cared a lot more about very inclusive organizations. I'm sad to say that today it's not as big a priority, but it doesn't mean it's not a big priority to the people in the organizations. So again, like modern leadership, keeping a, I think really to me, modern leadership means like, what does it look like today? Like, where are we today? Where are we going? Let's keep an eye out on the future. What are things that are coming down the pipeline? As opposed to the sort of idea of, I got my MBA, I know how it works, lock and load and go. There's just too much real-time information coming at us all the time. It's just constantly changing. And I don't think that leaders 10 years ago had quite the speed of iteration that we do today. And AI is just making it even faster, right? So it's changing even more.
Melissa - 00:47:14: When you think of what type of CEO roles are good for a chief product officer or for a product person to move into. Is it purely SaaS? Could a product person be the CEO of like a finance company or a bank or anything like that? Have you seen any trends there?
Mercedes - 00:47:33: You know, I think it's really interesting. I mean, I think the obvious one is if it's a product-led growth company, if it's a PLG company, it's pretty obvious that, you know, a product leader, a chief product officer who's running the core product. Is likely to be a natural successor to the CEO. I will say I've seen many examples, though, many, many, many examples. With Vista this past year, in the past year, we did a founder transition, and the chief product officer took over for that founder. And it was very much big enterprise selling, big, big enterprise selling. And that chief product officer had done exactly the things we're talking about. He worked extremely closely with the CRO. The CMO, the office of the CMO, there was no CMO. The office of the CMO was already reporting into him. And he had been participating at the board level for the past four years at the company. So just a very natural transition. So, you know, and... I think very famously there are, you know, GM's CEO is a woman who started off in product and engineering and worked her way up the ranks. So I don't think there's any company that is off limits if you are the chief product officer of that company. So if you're the chief product officer of that company, who knows the product better than you? Who knows the competitive landscape better than you? The answer better to you. Because if you're the chief product officer of a Plaid or a Stripe or a Checkout.com, somebody knows the product better than you. So you should know the product, whether you're in a fintech company, a financial services company, a bank. A real estate company. A car company, it doesn't matter. So I actually think that any company that has a chief product officer who is highly, highly commercial should be in the list of successors for that company. And they often are.
They often are. But I think that unless you're out there trying to make sure, unless you want to be CEO, you may be in the list of successors, but you're not likely to have rounded out your skill set. You're not as likely to have rounded out your skill set with that working closely with sales. Working closely, probably working closely with finance, but at the board level, getting involved in board meetings, helping prepare for board meetings, having sat on another external board. These are all the things you could be doing. But in terms of to answer your question, I think anybody who is a chief product officer in a company should be in the succession planning line for the CEO of that company. Every CEO should have a succession plan. I'm always shocked when we're doing CEO searches because really, and I'm grateful to do them, but really there should be a succession plan. Every CEO, every CPO should be planning their succession so that when they go to the board and say, I'm the one. You have your succession plan set up, right? Don't forget that if you want to take on the CEO role, someone has to take your role. And then number two, make sure that you are as exposed and experienced across the areas that might be natural gotchas, which we talked about. Like again, so finance at the board level, driving revenue. But yeah, I mean, we've seen it in dating. We've seen it in auto. We've seen it in fintech. We've seen it in banks. We've seen it in big enterprise. We've seen it absolutely in PLG. I can name 10 PLG CEOs we've put in place in the last year and a half.
Melissa - 00:51:07: I think this is very inspiring for a lot of CPOs out there who want to take the next leap or product people who want to become a CEO. It's funny. I actually, when you reached out and said, I want to talk about this, I had put a career chart out for product managers on my LinkedIn and everybody was like, well, what's after CPO? I'm like, oh, I didn't put CEO in there, but like, yeah, it could be CEO. It could be COO. And it started this whole debate. So I think a lot of people are going to be very excited to hear about that.
Mercedes - 00:51:31: It's never too early to start planning for this. And it's worst case, it makes you a great chief product officer. You know, worst case, it makes you a great VP of product. Like either way, a little, you know, recruiter secret is that. You know, when we go out and we're asked to find a chief product officer, when we're asked to find a chief marketing officer, when we're asked to find a chief revenue officer, do we want the person who never wants to be a CEO or do we want the person who's got great ambitions? We want the person who's got great ambitions. And it's not that we want to hire the person who's like gunning for the next job. That's not what I'm saying. But I'm saying like a well-rounded, broad executive in any one of these areas who's constantly looking to make themselves surrounded by great team members who they can promote and empower so that they also can move forward. That's the kind of person you want to hire. And for this role, one thing I would just remind everybody of is it's like. Chief product officer to COO, chief product officer to president, chief product officer to CEO. It can go CPO, COO, CEO. It can go CPO, president, CEO. But none of it's going to happen without asking for more. So when you're in your VP of product role, look for more. When you're in your chief product officer role, look for more. And the way to look for more is not about like, what's in it for me? It's like, what can I take off your plate, CRO? What can I take off your plate, CMO? What can I do to make your life easier, CFO? What can I take off your plate, CEO, for the board meeting? And that is the way you will naturally get promoted. Like, make your peers and your boss's life easier. It's the same thing I tell my college kids. Like, hey, when you get your first job, like, what do you want to do? They're like, what do I do? And I'm like, make your boss's life easier. Just make their life easier. You get promoted.
Melissa - 00:53:25: Well, thank you so much for sharing all that advice, Mercedes. If people want to learn more about you and your work with Artico, where can they go?
Mercedes - 00:53:31: They can go to articosearch.com. They can go to my LinkedIn page, Mercedes Chatfield-Taylor on LinkedIn. And I am always happy to talk.
Melissa - 00:53:40: Great. Well, thank you again for being on the podcast, Mercedes. It was great to have you. And thank you to our listeners out there for listening to the Product Thinking Podcast. We'll be back next Wednesday with another fabulous guest. And in the meantime, if you have any product management questions for me, go to productthinkingpodcast.com and let me know what they are. We'll see you next time. Thanks.
Mercedes - 00:53:58: Thanks, Melissa.