The 5 Main Errors in Product Management: How to Recognize and Overcome Them

Companies invest an extraordinary amount of time, effort, and money in digital transformation, workforce development, marketing, and the latest shiny little toy like AI. While these investments are crucial, it’s easy for businesses to get caught up in the noise and lose sight of the one thing that matters most: making products and services that people actually want.

The truth is, no matter how much you invest in the latest tools or strategies, none of it will stick if the products themselves don’t meet real needs. That’s why PA Consulting has developed a holistic model that helps businesses keep their eye on what’s essential—creating products that genuinely resonate with customers and stand the test of time.

In this article, we’ll dive into the five most observed shortcomings in product management at scale-ups and corporates. Drawing from our benchmark analysis of over 50 organisations, we’ll share practical insights and solutions to help businesses avoid these pitfalls. While each organization is unique, these patterns provide valuable guidance on what typically works in addressing these challenges. Do you want to discuss your individual challenges? Feel free to reach out and let’s chat.

1. Lack of Ability to Set, Understand, and Manage a Product Strategy

• The challenge: One of the most significant barriers organisations face is the inability to develop and manage a clear, effective product strategy. Many businesses lack a unified vision that aligns with both customer needs and broader business objectives. Our analysis shows this capability typically scores 15% lower compared to other areas.
• The solution: Often, product managers come from operational backgrounds, such as product owners, and have not been trained in drafting and communicating strategy. To overcome this, companies should focus on upskilling product managers in areas like market analysis, long-term planning, and strategic thinking. Implementing a structured process for creating and refining a product strategy ensures that it is communicated across the organization and that it continuously aligns with customer insights and business goals.

2. Difficulty in Understanding and Responding to Customer Demands

• The challenge: Many organisations struggle to stay close to their customers' needs, often resulting in products that don't fully resonate with the market. Our benchmark reveals that customer insights capabilities reach only 48% of industry best practice norms.
• The solution: Companies often either fail to collect meaningful customer feedback or have vast amounts of data without a clear way to derive actionable insights. To address this, organisations should build structured feedback loops and ensure product teams have access to tools that turn data into practical insights. Direct customer engagement through interviews, co-creation sessions, and market research will also help align product development with real-world needs.

3. Unaware of Critical Skills Gaps in Managing Products and Services

• The challenge: Our research shows that many companies have significant but very specific skill gaps they aren’t aware of. These gaps are unique to each company and don’t follow general industry patterns, making them harder to detect. Despite being overlooked, these gaps have a major impact, with performance deviating by 1.4 points out of 3 from the industry standard on average. Examples of these gaps include customer experience management, establishing effective metrics, and piloting release strategies.
• The solution: Most organisations lack a complete view of their product management capabilities, which increases the risk of unknown skill gaps. Conducting a thorough Product Capability Wheel assessment can help identify these weaknesses across the board. Once identified, companies can develop a targeted capability improvement plan and track progress through regular performance reviews, ensuring steady improvement over time.

4. Being Good at Either Innovation or Delivery (But Not Both)

• The challenge: Organisations tend to excel in either generating innovative ideas or delivering products efficiently, but rarely both. Our data shows that while 18% of companies are strong in innovation, 73% are better at delivery—only 9% manage to balance the two successfully.
• The solution: To correct this imbalance, companies should focus on building cross-functional teams that bridge the gap between creativity and operational efficiency. Innovation and delivery should not be siloed but should function together in a continuous product development cycle. Agile methodologies can be adapted to support both, ensuring that ideas are developed and executed effectively.

5. Lack of an Experimentation Culture?

• The challenge: Many organisations struggle to build a culture of experimentation, where rapid testing and iteration drive learning. According to our benchmark, lower-performing companies score just 1.3 out of 3 in this area, reflecting their reliance on traditional, rigid methods. This slows innovation and makes it riskier and more expensive. Ironically, the cost of not experimenting is much higher, as continuing with flawed concepts results in greater long-term costs than running small, early-stage experiments.
• The solution: Adopting an experimentation culture is key to sustainable innovation. Eric Ries' Lean Startup approach promotes the "build-measure-learn" cycle, encouraging quick, small-scale experiments to validate ideas early. Companies should remove common blockers like risk-averse mindsets, bureaucratic processes, and siloed departments. By enabling teams to take iterative risks and gather feedback early, businesses can pivot quickly, minimize large-scale failures, and foster more effective innovation.

Conclusion

The five errors outlined above represent the most common challenges that product managers and organisations face today. By recognising and addressing these issues, companies can improve their ability to create, manage, and scale products that meet customer needs and drive long-term business success. Of course, effective product management should be approached from a holistic perspective, instead of simply fixing the 5 errors above. For more information on how to transform your organization or team into a well-oiled products-and-services machine, read our previous article on the product capability wheel or reach out!

What’s Next: Spotlight on the Product Manager

This article is the second in our series on launching and managing successful products and services. In the next installment, we will focus on the Product Manager—the central figure driving innovation success. We’ll explore what makes a great product manager, the qualities and skills required for the role, and the different types of product managers we typically encounter in organisations. Understanding who should hold this key position and how they contribute to the product lifecycle will provide actionable insights for building stronger product teams.