The difference between product manager and product owner

Definition and origin of the product manager and product owner

The product manager is an established role that arose from the need to strategically plan and market products. With increasing complexity and specialisation, this position was created to focus on market analysis, product development, positioning and long-term planning. The product manager acts as an interface between the market and internal product development, with the aim of ensuring the market success of the product.

The role of the product owner emerged with the spread of agile methods such as Scrum. In agile software development, it became clear that a specific contact person was needed to translate the product vision into concrete requirements and lead the development teams. The product owner maintains the product backlog, sets priorities and ensures that the team works on the most important tasks. This role is essential in order to react flexibly to changes in an agile environment and to continuously deliver functioning software.

In contrast, the product manager has a broader responsibility. They take care of the entire product strategy, market analyses and long-term planning. The product manager works closely with marketing, sales and other departments to ensure that the product is successfully positioned on the market. He is responsible for the entire product life cycle, from the idea to the market launch and beyond.

The emergence of these roles shows the increasing complexity and dynamism in product development. The product manager defines the strategic direction, while the product owner ensures the tactical implementation. Together, they lead the product to market success.

What do Product Owners and Product Managers have in common?

Although their focal points are different, the product manager and the product owner pursue the same goals:

Product focus

Both roles develop and improve products that fulfil customer needs and create company value. They are responsible for understanding and communicating the vision of the product and sharing it with all stakeholders.

Market and customer orientation

Both the product manager and the product owner must understand the needs and expectations of customers and integrate them into product development. They set priorities, be it for new functions, solutions to problems or suggestions for improvement, in order to create a marketable product.

Working with stakeholders

Both product managers and product owners interact with various stakeholders (e.g. customers, team members, company management) to ensure that the product meets expectations.

Risk and opportunity assessment

Risk and opportunity assessment: Both roles assess risks, identify opportunities and take measures to make the product successful.

Feedback and iteration

Both product managers and product owners continuously collect feedback from users and customers in order to constantly improve the product and optimise the product-market fit.

What are the differences between the two roles?

The roles of product manager and product owner are similar, but have clear differences:

Strategic vs. tactical role

The Product Manager (PM) has a strategic role and focuses on long-term vision, market positioning and product strategy, not just technical development. It is crucial for the direction and success of a product. The main tasks are market research and analysis in order to recognise needs and trends. Based on this, he develops a product strategy that reflects the company’s objectives. They also create and maintain a product roadmap that defines the direction and milestones of development.

The Product Owner implements agile product development tactically and transforms the strategic vision into concrete requirements and solutions. Their main task is to manage and prioritise the product backlog and work closely with the development teams to ensure clear requirements. The product owner combines the strategic goals of the product manager with operational implementation, which makes a decisive contribution to the success of the product.

Interaction with the development team

Ein Produktmanager steht in regelmäßigem Kontakt mit dem Entwicklungsteam, um sicherzustellen, dass die strategische Vision und die Marktanforderungen in die Produktentwicklung einfließen. Der Product Owner ist Teil des Entwicklungsteams und arbeitet in der Produktentwicklungsphase eng mit den Entwicklern zusammen. Seine Aufgabe ist es, dafür zu sorgen, dass die Teammitglieder die Backlog-Elemente verstehen und sie effektiv umsetzen.

Sphere of influence

The product manager has a greater strategic influence and oversees one or more products, often even the entire product portfolio, over the entire life cycle. The product owner usually concentrates on a specific product or a specific area and its operational implementation during the development phase.

Product Manager and Product Owner – complementary roles or redundant positions?

The discussion about whether a product manager (PM) is needed when there are already several product owners (PO) is difficult to understand. In some cases, one person can be both PO and PM if the scope of a project is manageable. However, this is rarely the case with complex industrial goods.

The assumption that there is no need for a product manager if there is already a product owner is particularly widespread in agile organisations. The following considerations influence this view:

Overlaps in the roles

In agile development teams, especially in Scrum, the tasks of the product owner are often similar to those of a product manager. The product owner prioritises the backlog, defines user stories and works closely with the development team to meet stakeholder requirements. These activities could be considered sufficient to take over product leadership without needing a separate role for strategic management.

Misunderstandings about the roles

In some organisations, there is confusion about the specific roles of the product manager and the product owner. If strategic and tactical tasks are not clearly separated, the impression can arise that one role is superfluous. Sometimes the product owner is seen as a kind of product manager who is supposed to take on both strategic and operational tasks.

Agile methodology

Agile development methods emphasise rapid iteration, adaptability and close collaboration. In this environment, the strategic aspects for which a product manager is responsible are less critical, especially when the focus is on current development rather than long-term market or business strategies.

Resource limitations

In start-ups or small companies with limited resources, it often seems sensible to only fill one of the two roles. The product owner is usually favoured, as this role is directly involved in product delivery and is considered to add immediate value.

When discussing roles such as “product manager” and “product owner”, care should always be taken to ensure that these terms are not just used as “labels”, as overlaps in tasks and responsibilities can quickly arise. The product manager is often simply renamed product owner without the tasks and responsibilities changing significantly. It is important to define a clear separation of roles.

The relevance of the Product Owner role in industry

In the field of software development according to agile concepts such as SCRUM, the role of the product owner often dominates. This is because large software products are developed by several agile teams and each team needs its own product owner. In practice, there are often 2-3 POs for every PM.

However, the term “product owner” can also be applied to physical industrial goods, where other terms such as technical product manager, product specialist or platform product manager are usually used. The scope of the roles varies.

The core idea and manifesto of PM1 is that the product manager is the entrepreneur for the product. For us, the division of labour between PM and PO makes perfect sense in many respects. The PM takes on a strategic, long-term market-orientated role, while the technical product manager concentrates on technical, application and product development-orientated tasks. This division of labour is particularly useful for complex technical products, as a single person often does not have enough time, expertise and intellectual capacity.

Fazit

To summarise, close collaboration between the product manager and product owner is crucial to the success of a product. The product manager sets the strategic vision and bears the commercial responsibility. The product owner focuses on agile implementation and the details of product development. Despite overlaps, clearly separated roles offer unique advantages. This leads to a better balance between strategic planning and operational implementation, creating more competitive products overall. Their collaboration ensures that the product meets market requirements and is successful in the long term.

PM: The Product Manager follows the market from a holistic perspective. He analyses market trends, observes the competition, ensures the profitability of the products and identifies opportunities for differentiation. Their main focus is on developing long-term strategies and defining the product vision.

PO: The Product Owner acts as a bridge between the long-term vision and the practical implementation. They work closely with the development teams to ensure that every feature and every product increment delivers the greatest possible value.