When is it time for a business to take on a Chief Product Officer (CPO)? – top tips from ECI Partners

The role of a Chief Product Officer (CPO) is becoming increasingly crucial for businesses going for growth, but when is the right time to invest in a CPO, and how does this role differ from that of a Chief Technology Officer (CTO) or a Chief Technology and Product Officer (CTPO)? ECI Partners, the leading growth-focused mid-market private equity firm, has helped many UK companies to grow and develop, both organically and through M&A, which includes adding value by helping secure the right leadership structure for a firm foundation on which to build for the future. The company has advised many companies on why and when to create a new C-suite role.

Duncan Ramsay from ECI Partners, advises: “The CPO is a key company leader, responsible for the product strategy, vision, and execution within a company – effectively ensuring the products fit the market. They are the driving force behind product development, managing the product lifecycle from conception through launch and beyond, and play a critical role linking customer needs, commercial goals and technology.  In effect, they are therefore the engine of growth, however, the timing has to be right to consider introducing this role to a company.”

When to consider a CPO

Duncan continues: “The decision to bring a CPO on board often hinges on the size and complexity of the business, and the importance of product to the value proposition. A product business like ISMS.online, which changes the way businesses handle data compliance and security compliance, may develop the need for a CPO quite early in its evolution, whereas a tech-enabled services business, like Moneypenny, the global communications company, may find that a great CTO, with a product mindset, is just what they need for the next growth phase.

You will also tend to see dedicated CPOs in larger organisations, and we advise that this role becomes essential when:

• The business is a product business, and winning in the market relies on continuously evolving the product
• The scale of the organisation and/or product portfolio diversifies beyond the scope of what a CTO can manage while also handling technology infrastructure

CPO vs CTO vs CTPO: clarifying the roles

While a CTO’s primary focus is on the technological infrastructure of a company, a CPO’s role is distinctly different. Some of the key distinctions are:

• Vision and strategy: A CPO defines the ‘what’ and ‘why’ of a product, while a CTO focuses on the ‘how’ from a technological standpoint.
• Customer-centric: CPOs are deeply entrenched in understanding customer needs and market trends to guide product development, unlike traditional CTOs, who may be more internally and operationally focused.
• Cross-functional leadership: CPOs often work across various departments, including marketing, sales, and customer service, to ensure a cohesive product strategy.

The CTPO or CPTO
Duncan comments: “The CTPO role is something we see commonly in businesses we invest in (those valued at up to £300m), as there is a need for the CTO to have a product focus, and we often see product teams reporting to a CTO, but the business isn’t of a scale where a separate role makes sense. The CTPO, alternatively known as CPTO, oversees a business’s technology and product needs, and typically combines the CTO and CPO role, enabling pursuit of a common goal.

The CMPO
Product thinking is also bought into organisations in other ways; Chief Marketing and Product Officer (CMPO) is another role seen in our portfolio companies, and this typically covers building brand awareness by developing marketing strategies and campaigns, conducting market research and analysing data.  It also involves cross-functional interaction.

When should you implement a new C-suite role?

Duncan concludes: “Product thinking is a valuable discipline for companies of all shapes and sizes. Whether you start to dedicate a C-level exec such as a CPO or not, depends on how central product is to value creation for your customers and your organisation, and the scale of your business or product portfolio. A larger, more complex business may benefit from additional senior resource; and as you scale, the incremental cost becomes less of a barrier. With a CPO taking ownership of the product vision, road map and execution they act as a crucial buffer, allowing the rest of the C-suit to focus on their core responsibilities.

About ECI 

ECI is a leading private equity investor, focussed on offering collaborative support to management teams. .