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 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 for responding flexibly to changes in an agile environment and continuously delivering functioning software.

In contrast, the product manager has broader responsibilities. They are responsible for the overall product strategy, market analysis and long-term planning. The product manager works closely with marketing, sales and other departments to ensure that the product is successfully positioned in the market. They are responsible for the entire product lifecycle, from the idea to the market launch and beyond.

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

What do product owners and product managers have in common?

Although their focus areas differ, the product manager and the product owner pursue the same goals:

Product focused

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

Market and customer-oriented

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, whether for new features, problem solutions or suggestions for improvement, 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 action to make the product successful.

Feedback and iteration

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

What are the differences between the two roles?

The roles of product manager and product owner are similar, but there are clear differences between them:

Strategic vs. tactical role

The product manager (PM) plays a strategic role and focuses on long-term vision, market positioning and product strategy, not just technical development. They are crucial to the direction and success of a product. Their main tasks are market research and analysis to identify needs and trends. Based on this, they develop a product strategy that reflects the company’s goals. They also create and maintain a product roadmap that sets the direction and milestones for development.

The product owner tactically implements agile product development and translates 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 links the strategic goals of the product manager with operational implementation, which contributes significantly to product success.

Interaction with the development team

A product manager interacts regularly with the development team to ensure that the strategic vision and market requirements are incorporated into product development. The product owner is part of the development team and works closely with the developers during the product development phase. Their task is to ensure that team members understand the backlog items and implement them effectively.

Sphere of influence

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

Product managers and product owners – complementary roles or redundant positions?

The debate 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 a product manager is not necessary if there is already a product owner is particularly common in agile organisations. The following considerations influence this view:

Overlaps in roles

In agile development teams, especially in Scrum, the tasks of the product owner often resemble 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 on product management without the need for a separate role for strategic management.

Misunderstandings about 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, it can create the impression that one role is superfluous. Sometimes, the product owner is viewed as a kind of product manager who is expected to take on both strategic and operational tasks.

Agile methodology

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

Resource constraints

In start-ups or small companies with limited resources, it often seems sensible to fill only one of the two roles. The product owner is usually preferred, 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 used merely as ‘labels,’ as this can quickly lead to overlaps in tasks and responsibilities. Often, the product manager is simply renamed the product owner without any significant change in tasks and responsibilities. It is important to define a clear separation of roles.

The relevance of the product owner role in the industrial sector

In the field of software development based on 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, although other terms such as technical product manager, product specialist or platform product manager are usually used in this context. 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 ways. The PM takes on a strategic, long-term market-oriented role, while the technical product manager focuses on technical, application and product development-oriented tasks. This division of labour is particularly useful for complex technical products, as a single person often does not have enough time, technical and intellectual capacity.

Conclusion

In summary, close cooperation between product managers and product owners is crucial to a product’s success. The product manager sets the strategic vision and bears economic 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, which creates more competitive products overall. Their collaboration ensures that the product meets market requirements and is successful in the long term.

PM: The Product Manager tracks the market from a holistic perspective. They analyse market trends, observe the competition, ensure the economic viability of products and identify 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 practical implementation. They work closely with the development teams to ensure that every feature and every product increment delivers the greatest possible value.