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In recent years, the explosion of software-based products and the growing popularity of Agile frameworks have dramatically transformed the field of product management, which now includes a number of roles and specializations. This expansion has led to misconceptions about the responsibilities of product managers, as well as some confusion around where and how they can add value.
At large companies, there is often more than one person responsible for the product management function, while startups and small businesses will typically hire a single product professional. In any situation, though, leaders should ensure they have the right person for their business needs.
You can start by asking yourself: Do you need someone with the skills and knowledge to deliver a product or to build a business around a product? If the focus is on the delivery side, hire a product owner, someone who will work specifically on features, user stories, backlog prioritization, and Agile sprints.
If the goal, however, is to build a business around a new product, and create and exploit growth opportunities, you’ll need someone with a broader skill set and a different approach: a product manager. That said, hiring a product manager does not necessarily negate the need for a product owner—whether you need both will depend on the unique context and maturity level of your business.
A product manager is not necessarily a technical content expert, but they are capable of deep and broad discussions with other departments about building profitable business units. Unlike the product owner, who is concerned with granular processes such as sprint planning and test planning, the product manager is responsible for the broader objectives around strategic thinking, research and competitive analysis, marketing, and business and financial analysis.
So what exactly is the difference between a product owner and a product manager? The product owner is a Scrum-specific role that the Scrum Guide defines as having accountability for “maximizing the value of the product resulting from the work of the Scrum team.” Product owner responsibilities include:
In comparison, product manager is increasingly a cross-functional role. A product manager’s objectives are to lead the entire product team during development while also:
In a 2022 article, McKinsey & Company emphasized the growing need for ever-stronger product management capabilities across industries as companies increase their investments in software development. But what distinguishes a good product manager from a great one? This is how I believe great product managers should be spending their time:
Much of the recent dialogue surrounding the product manager role has been centered on the concept that this person is the CEO of the product, but a big realization for me has been that this isn’t necessarily true. The idea that the product manager has the ability to get the budget and staff they want is often misguided, particularly at smaller organizations. A great product manager understands that customer needs must be balanced with those of internal stakeholders; their role is to serve all parties. Creating a successful product that is both attractive to the target market and achievable with the resources available is a collaborative effort.
The need for product strategy may seem obvious, but many product managers don’t apply strategic thinking to how their products and other parts of the organization work together. If you design a product that meets all the right industry specifications but doesn’t work well with your technical or operations systems, then it’s not going to increase revenue or bring the shareholders value.
For example, I recently worked on sourcing new Internet of Things products for a company in the transportation and logistics industry. The goal was to reduce cost and complexity by using external products rather than developing them in-house.
Sourcing these new products would indeed have increased the number of devices the company could ship and boosted revenue. However, the company’s technology did not properly function on the third-party products, and it would have taken significant investment to fix that. The technical and financial realities were in opposition to the product strategy.
Great product managers understand the cross-functional nature of projects, and their generalist knowledge means they can offer specialist colleagues different perspectives and options.
For example, I recently worked with a talented engineer who had extensive knowledge of the operations required to move a new product through the supply chain and into production. What she lacked was the broader view of research and development, project management, and product strategy. I coached her on the “Why” to demonstrate how her piece fit with all the other pieces. As a result, she was more effective at her job—and I gained more knowledge on the new product introduction process too.
There are some areas that, while still important, a great product manager should spend less time and attention on.
Requirements should be high level and there should not be too many initiatives in progress at one time, so a great product manager should not be spending much time on this task.
At an established company, a great product manager uses what they know and what they have learned from market research, and combines this with their organization’s collective knowledge and previous customer experiences. A startup will typically not have a team with vast experience, so some subject matter expertise may be necessary here in order to define requirements.
It is, of course, important to be familiar with the customer and their needs, but unless you are new to the industry, you should not be spending too much time on this. If necessary, leverage the intimate customer knowledge of the technical and sales teams, but if growth is the aim, focus your time on engaging with customers in new markets.
Using historic metrics to guide you forward is like driving by looking in the rear-view mirror. Rather than looking at what has happened, look at what is happening or what might happen.
Data can be useful, so optimize your time on this task by focusing on two things:
Homing in on this data will provide tangible action points and have a bigger impact on product success than continually reviewing all metrics.
A project I worked on recently demonstrates the value of a product manager. A $250 million engineering and manufacturing company was experiencing a five-year decline in revenue and profit from its largest product line while the market grew at double-digit rates each year. The vice presidents of marketing and R&D had determined that the large disparity between industry growth and the company’s decline indicated an opportunity to improve performance if a clearly superior product could be implemented in record time. I was brought in as the product manager to lead this ambitious project.
In partnership with the company, I worked to introduce a range of improvements, including conducting in-depth research and competitive analysis to determine product positioning, increasing sales and marketing activity, and supporting team leaders with new product development. The project was ultimately successful not only in significantly improving revenue, but also in creating internal efficiencies and systems that continued to positively impact the bottom line.
This is one instance in which hiring a product manager was the right choice, based on the scope of the project and the tasks and responsibilities involved. While a product owner’s goals are centered around prioritizing the requirements necessary for building a product, a product manager determines what should be built and why. In this particular situation, market research, competitive analysis, cross-functional collaboration, and communication with external suppliers were all needed in order to achieve the desired results.
While the market has evolved, and will continue to evolve, there remains a need for the skills and expertise of both a product owner and a product manager. By considering the nature and scale of a project, and understanding the skills and responsibilities associated with each distinct role, leaders can ensure they hire the right person to help them develop and launch products successfully.
This article has recently undergone a comprehensive update to incorporate the latest and most accurate information.
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