Product manager and product owner – What’s the difference?

6 Jul 2021

Product manager and product owner – What’s the difference?

Jul 6, 2021

to ensure The differences between a product manager and a product owner have been argued about for more than 20 years, since the role of the product owner started to put down its roots. In the background is the argument about what responsibility each has and where should the line be drawn. The starting point to this argument is wrong. There is no such thing as the right split. The responsibilities should always be distributed on occasion. 

History of the roles and titles

Product management goes all the way back to the 30s. Procter & Gamble introduced the role of the Brand Manager who had the four P’s of marketing (Product, Price, Promotion, Place) as his responsibility. As time passed P&G’s conventions spread from the soap business to other lines of business and in organizations product management and product marketing units started to develop.

These units and the product managers who worked in them had the responsibility of the product, the price, the place and the promotion. Because the emphasis in different companies and lines of business varied, the role of the product manager molded more with the company’s needs than along a generic role description. The more technical and complicated the product, the more development based the role generally was. In consumer products the role of marketing was emphasized and often it was even cut out of the product managers responsibilities.

The history of the product owner is shorter. When software development started to get more agile in the late 90s, the scrum framework was created. Its essential role was determined to be the product owner. The role was meant to function as someone who understood the needs of the customer, transmitted and prioritized them to the software developers. The need for the role rose from the needs of the development team and the role of a product owner has still stayed as a role in product development, not as a role in business.

At the end of the day, who really owns the product?

Product owner is a misleading title. Nowadays a product isn’t necessarily something concrete, a sellable object. It can be a service for a monthly payment or even a crucial component to a customer solution. The ownership of a product is always the company’s, even if the responsibility belongs to a certain role or person. 

The product owner’s responsibility is in software development to ensure the right things are getting done in the right order. The product managers responsibility are usually the four P’s, which are in addition to the product the packaging, pricing and making it attractive to the customer. The overlapping part of the roles is mostly about developing the product. On the other hand the overlapping might be at the core of everything that’s getting done. For example in the case of continuously developing software where the product itself works as a distribution channel and a lure for customers.

A good example of doing something overlapping and using the same terms for different purposes is product strategy. Even if the original role of product owner didn’t include defining product strategy, nowadays it’s without an exception a part of product owner training, like it’s also a part of product managers training programs.

When product strategy is discussed in a product development organization it usually means a plan about what kind of product is wanted to be developed, how it is going to be developed and in which kind of stages. Technology, architecture and release selections have a crucial role in this kind of strategy along with the features that are being developed. Instead pricing, product marketing, target market or product positioning is rarely thought of. But if the product is for example a wine, success usually is achieved with a different strategy like the Blue sea strategy teaches us.

The need for organizations to define the roles

Different roles, as well as titles getting mixed up, affects mostly companies who develop software. The amount of these companies is growing, so the challenges in determining roles won’t be disappearing. It’s case by case what roles should there be in an organization and how the responsibility should be distributed.

Product responsibility in an early stage startup

When founding a new company the founders usually have a good idea and a vision of the product. The roles are split up based on expertise and despite the title, one does just that what is needed next. At some point, the business grows and the founders have to focus their work on something else. As the development team grows it needs someone to lead and coordinate its direction. Because in the start the need is usually in development, you could assume that it is wise to hire a product owner as the founders focus on the business side of things. 

A good team understands both its own expertise and its future needs. A product owner can be a necessary role, but it’s not always like that. The company might lack expertise from product marketing, pricing, or from refining its own business model. The founders’ time might get spent on the company’s financing, hiring, or taking care of selecting technology. That’s when a product manager, who can allocate a part of his time to leading the team, is a better solution. 

When making the choice you have to also consider the company’s or the product’s life cycles next phase and need. A product manager who can lead a development team can be easier to find than a product owner,  who can do marketing.

Complex customer solutions’ layered or divided responsibilities

A complex customer solution can mean a car, a harbor crane, or a banking system. These solutions are so complex that multiple people are needed to manage the product. There can be dozens of development teams and their responsibilities can be different. In such cases, roles are usually defined according to the organization.

SAFe is an example of a hierarchical development model where product managers are above decision product owners. Roles and responsibilities are clearly defined. On the other hand, they are far from what the same roles are in a software based growth company. Product managers are usually responsible for large entities and their direction, while product owners are responsible for smaller components and their implementation. In the worst case, product owners will only become fulfillers of the wishes of internal customers and writers of user stories whose work is far from considering a product strategy. The roles above the product owners in the organization chart can also be development-oriented. The same role in another organization can be an Area Product Owner, when LeSS is used instead of the SAFe model.

The product architecture and the organization of product development guide the organization of large companies and the work done under different titles.

Self-directing teams

One of the biggest trends in recent years has been the self-direction of teams, also covering the identification of customer needs. Modern teams not only develop features in line with the needs list coming from within the organization. They themselves strive to understand their customers’ problems, test solutions, and produce final solutions.

In order for self-directed teams to work, they must have a wide range of expertise in technologies, user experience, and understanding of customer needs and industry. Often, marketing and sales expertise is also needed to test the desirability of a solution.

Self-directed Teams are created for both growth companies and established firms that want to dismantle their hierarchical structures and give more responsibility to the doer level. Self-directed teams usually have a product owner or product manager, but which of these is the better option?

The question returns to the responsibilities of the team. The self-directed team can be a development team or responsible for the entire product. If a company assumes that the team is able to handle commercialization in addition to development, then the expertise must extend to product marketing. Most product owners are lacking this expertise

What or which roles are needed?

Basically, it can be said that the product owner is a development role and product manager is a business role. This simple memory rule would already ease a lot of confusion between these two roles.

A good product owner is often a specialist. The role of the product manager is broader and requires a wide range of expertise. When building an organization and opening up new vacancies, companies should emphasize what they expect from their new roles and what opportunities they offer to job seekers.

Even from the job seeker’s point of view, it is better when the expectations for the role are clearly described and above all when the title and the role differ from each other. It is important for a job seeker to understand the career path and their own development opportunities, i.e. whether in-depth expertise or a broader strategic and business vision is expected and which things you can influence in the job yourself.

Other disputes over the division of roles and their responsibilities can be stopped. Only organizations themselves can know what they need.

Harri Pendolin

Harri Pendolin

Johtava konsultti, tuotejohtaminen ja strategia

Harri on “product guy” henkeen ja vereen. 20 vuoden työuraan mahtuu niin tuotepäällikkönä toimimista isossa yrityksessä, kuin kahdeksan vuotta yrittäjänäkin, mutta aina tuotteiden parissa. Suurimmat intohimot syttyvät tuotestrategioiden kehittämisessä ja portfolion hallinnassa.

Vapaa-aika menee Harrilla liikkuessa ja lasten harrastuksissa. Harri on aina valmis jakamaan osaamistaan tuotejohtamisesta tai debatoimaan liiketoiminnan strategisista valinnoista. Lisää Harrin kokemuksia ja mielipiteitä voi lukea täältä.

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