The Differences Between Product Owners and Product Managers

There's so much confusion and debate going on over the roles of product managers and product owners. Perhaps it's due to the relative novelty of both fields. Or the fact that their responsibilities tend to overlap. Or maybe it's because their roles aren't well-defined in many companies (especially startups).

Whatever the reason, it's always good to remember that the product manager is not interchangeable with the product owner. While most of a product manager's responsibilities revolve around working with external stakeholders and defining the product vision, a product owner collaborates more with internal stakeholders and is chiefly responsible for turning the product manager's vision into actionable tasks.

But that's not all there is to know about the product manager and product owner. In this article, we examine each professional's responsibilities and advise on the best to have on your team.

What is a product manager?

A product manager connects design knowledge, business strategy, and customers' desires to create a useful and valuable product. They're responsible for discovering and understanding users' needs, prioritizing what to build, creating the product vision, and rallying the scrum team around the vision.

What does a product manager do?

The product manager's role focuses on leading the entire product management team and other teams involved in product development to realizing the product vision. However, unlike conventional leaders, product managers do not have direct authority over their teams. 

Below are a few specific roles of the product manager:

Product vision

The product manager is in charge of creating the product strategy. They draw up the product roadmap and set the proposed timelines for achieving the product's deliverables. Whether the plan is to introduce a new product or improve an existing one, the product manager is responsible for articulating the product's business value to the team so that everyone understands the 'why' behind the project.

Customer discovery

The product manager conducts market research to discover the customers' needs and draws actionable insights from the data. Through the insights, they develop new product ideas, prioritize the product features, and rally the development team to start working on the product. PMs act as the voice of the customer on the scrum team. They're also responsible for communicating with the customers during the product development phase and even after launch. Tasks such as organizing product demos and gathering customer feedback are under the purview of the PM.

Cross-team alignment

As the CEO of the product, the product manager rallies the company's development and product marketing teams to actualize the product vision. Although they may not have direct control over the professionals that make up their team, they still have to get everyone to come together to pursue the common goal. Consequently, they often have to rely on their people skills and emotional intelligence to ensure everyone is on board.

Feature prioritization

The product manager prioritizes the features that the engineering team will build into the product to improve the user experience (UX). They're responsible for making trade-offs based on the features' perceived value to both the customers and the organization. Importantly, they'll work closely with the development team to ensure they're equipped with all the information they need to bring the product vision to life.

Product manager metrics

A great product has to be valuable to both the users and the company. Without widespread user acceptance, it'll be hard for the company to make money on any product. In the same vein, a product that's widely accepted by users but is not useful to the company is unsustainable. Product managers are responsible for measuring the value of products both to the company and the users, and they rely on diverse metrics to do so. Below are a few of them:

NPS (product)

The net promoter score compares the percentage of customers willing to recommend a product with the percentage of customers that hate or will not recommend the product. Typically, the product team asks customers to rate this on a scale of 10. Then, they set their acceptance criteria and calculate the percentage of people who love the product and would recommend it to others (promoters), and those that hate the product and would not recommend it to others (detractors).

• NPS = % of promoters - % of detractors

Conversions (product)

Conversions measure the percentage of customers that take the desired action such as a sign-up or subscribing to a paid plan. It provides insights into the effectiveness of your marketing strategies and the areas you need to improve upon. You must have a goal in mind before you can accurately measure conversion rates. For example, it could be subscribing to a service, upgrading to a more expensive plan, or completing a goal action in the product.

Revenue (business)

Revenue calculates the amount of money the product has generated or will generate. For most SaaS products, revenue is calculated as monthly recurring revenue, a measure of the total amount of subscription-based revenue the product could generate within a month. When necessary, this data can be extrapolated to a year to give the annual recurring revenue.

• MRR = Sum of all the recurring revenue from active customers

Product churn (business)

No matter how good your product is, you're unlikely to successfully convert every customer to a loyalist. Product churn measures the percentage of monthly users that are lost due to people not using your product anymore.

• Product Churn Rate = (Numbers of users first month - Number of users for the second month) / Numbers of users first month

What is a product owner?

According to the official Scrum guide, the "Product Owner is responsible for maximizing the value of the product resulting from the work of the Development Team." If the PM has a strategic role in the product development process, then the product owner role can be described as tactical. They translate the PM's vision into actionable tasks and work closely with the agile teams to ensure they're executing the PM's strategies. They often focus on quarterly or on “3-sprint view” timelines.

What does a product owner do?

The product owner role can be traced to Scrum - 'an agile framework for building and sustaining complex products.' Due to their role in the Scrum framework, product owners work closely with the internal stakeholders to ensure that the development journey aligns with the product roadmap. Below are a few specific roles of the product owner:

Optimizing the development process.

The product owner attends all scrum meetings to ensure that the product development process is in line with the product vision. They coordinate the development process to ensure that the development team is always clear on the next task ahead, and the product will be released according to schedule. Furthermore, they provide detailed requirements, facilitate seamless collaboration, and ensure the delivery team stays on top of the project deadlines.

Turning the product vision into an actionable backlog.

Product Owners have the unique task of translating the grand vision of the product manager into actionable user stories. They further prioritize these stories and arrange them in the product backlog. This makes it easier for everyone on the agile development team to stay in line with the product vision. The focus timeline for product owners is generally on the quarter or sprint view. The 3 sprint view was described to me by one product owner as the “holy grail” for product owners.

Advocating for the customers' needs in front of the development team.

The product owner serves as the voice of the customer on the development team. They ensure all the companies' resources are dedicated to building products that will thrive in the marketplace. Their guidance is particularly important for engineering teams known to build products they like rather than products customers want.

In addition to being the voice of the customer, the product owner is the voice of the support team. After all, any improvements that impact the support team are improvements that probably impact the customer as well.

Do you need a product owner and product manager?

The above comparison aims to help make an informed decision about the best professional to have on your team. Sometimes, you'll need both a product owner and a product manager. Other times, only one of them may be enough to handle the task at hand. Ultimately, it all depends on your organization's structure, the nature of your team, and the product you're trying to build.

If you're building your company according to Scrum or incorporating agile practices, having the product owner on your team is necessary. You cannot execute a scrum project without a product owner and scrum master (according to official guidelines). The Product Owner is not the scrum master.

However, you may still have space for a product manager, even on the scrum team. A product manager can lead your product from the idea through all the stages of design, development, and launching, and even beyond. If you're yet to get the hang of customer relations and market requirements, having a product manager to focus on the larger picture could prove quite helpful.

Conclusion

If you have the resources and the structure to accommodate both a product manager or product owner, you should, by all means, go for it. While some of their responsibilities may overlap, both professionals have vital roles to play in building a great product. In cases where your resources or organizational structure does not make room for both, your project's nature should be the deciding factor. While the product manager can easily handle waterfall projects, the product owner remains an indispensable part of scrum projects.

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Thanks to Chaz Adams for his thoughts and feedback on this article.