The Main Differences Between a Product Manager and Project Manager
Looking to expand your team? Keep reading to discover which role better suits your product’s needs: Project Manager vs Product Manager
Product Manager and Project Manager roles often get mixed up because of their similarities in terms of skills and expertise. But despite that, the responsibilities of these two positions are completely different.
While a Product Manager is in charge of “What to build” the Project Manager tries to figure out “How to build it”.
Let’s look at the following example to better understand the dichotomy between “Product Manager vs Project Manager”.
What will be your first step if you want to throw a big party? Probably hiring an event planner. That Event Planner will first gather details from you such as your expectations and requirements for said party. According to that data, the Event Planner will plan the party and get the best vendors onboard to turn that plan into a big hit party; such as a caterer for food, a florist for flower decorations, a DJ for music, etc.
Here, “Party” is a product. “Event Planner” is the Product Manager. “Caterer” and “Florist” are Project Managers who lead their teams to achieve the primary goal, whether that means providing good music, outstanding catering experience, beautiful ambiance, etc.
But what exactly does the term “Product” and “Project” mean?
Product vs Project
What is a Product?
A product is defined as anything that meets the user’s needs or solves a problem. It could be a physical product, software, service, application, system, or platform. To make a product a success, you need to take care of its lifecycle. The product lifecycle involves different phases such as planning, development, launch, improvement, and maintenance. A product is not a one-time endeavor. Until the product is no longer needed in the market, its lifecycle keeps running. But there’s no defined period for this lifecycle.
What is a Project?
Project is what is required to develop a product. To make a project a success, you need to achieve a specific set of tasks in a defined period. The project also goes through different phases such as initiation, planning, execution, monitoring, and closure. But, in contrast to a product, a project has a start and finish date. Hence, this one is a temporary endeavor. Once the project achieves the goal and i.e developing a product, it ends.
Now that we know the difference between Product and Project, let’s talk about the difference between product manager and project manager.
What does a Product Manager do?
In simple terms, a Product Manager is a strategic thinker. Also called the CEO of a product. A Product Manager is responsible for the product and its lifecycle management which involves ideation, planning, design, development, launch, market, maintenance, and improvement of a product until its lifecycle ends. A Product Manager is the one who develops an overall strategy, and a product plan and also gets involved in the marketing plan for the product while making sure that everything is implemented according to said plan. The goal is to deliver the right products and features to satisfy a target audience within budget, on schedule, and providing the highest quality levels.
What does a Project Manager do?
In simple terms, a Project Manager is a Doer. Also called the COO of a project. A Project Manager is responsible for taking a project from concept to reality within a defined period. A Project Manager is also responsible for the project and its lifecycle management, which involves initiation, planning, execution, monitoring, control, and closure. A Project Manager makes sure that the project is completed on time and within budget. They are the ones who handle the project by planning and scheduling, coordinating resources (people and equipment), communicating progress and deadlines to stakeholders, resolving conflicts and issues, and making sure everything stays on time and on target.
Responsibilities of a Product Manager vs Project Manager
To learn more about the differences between Product Manager vs Project Manager roles, let’s talk about their responsibilities in-depth now.
Responsibilities of a Product Manager
According to Peter Drucker, the father of modern management, the Product Manager is responsible for ensuring that a company’s products are “relevant, desirable and feasible.” To make this happen, a Product Manager deals with a lot of crucial tasks. And those tasks vary from company to company, and from team to team, depending on the scale of an organization. But more often, a Product Manager performs the following tasks:
- Develop a product strategy
The Product Manager connects with the target user to gather their needs, concerns, and requirements. They use this data to find opportunities and solutions that can be turned into a product. They also need to carry out thorough research to figure out the existing options that the competitive market already offers. The latter includes asking themselves questions like:
- What products are currently available?
- What user needs are these products surfacing?
- What is the average price point of these products?
- How can we offer a better and improved version of our product within a justifiable price point?
- What new and unique features or services can we add to make our product the best choice for consumers?
- Does this product meet customer and business goals?
Once a Product Manager has adequate data, they can develop a relevant product strategy.
- Create a product roadmap
Another important responsibility is to create the product roadmap that explains product strategy, features, milestones, and future growth plans. The Product Manager also helps the team set up real-time and actionable product goals so they can organize and schedule deliverables accordingly.
- Plan and prioritize product features and capabilities
Designing a product with a group of unique features is not enough. The Product Manager needs to plan and prioritize the right features, according to their relevance to business goals, while also taking into consideration customers’ needs, technical opportunities, and limitations at the moment of setting priorities.
- Seek new opportunities
The Product Manager’s work is not done when the product is launched. Constantly monitoring market trends and watching out for product performance and customer feedback is very important for a product’s long-term success. The Product Manager’s key responsibility is to gather and analyze this data to seek new opportunities for product improvement. These prospects could go from bug-fixing and improving product performance, to introducing new features or services.
- Work with cross-functional teams
To make sure each team is aligned with the product strategy and following the product goals as the schedule indicates, the Product Manager acts as a liaison between cross-functional teams such as development, design, finance, legal, support, marketing, and sales. Here, their goal is to make sure that each team is on the same page regarding the product requirements and deliverables.
Skills required for a Product Manager
To perform various functions without any shortcomings, strong leadership, decision-making, and communication skills are a must. But a Product Manager also needs to be a jack of all trades who can not only understand the business side but also the customer and the technology aspect of things as well. To do so, here are some non-negotiable expertise a Product Manager should have.
1. Business skills
A Product Manager should strive to understand the business goals, market dynamics, and what customers expect from the product. And also, finding and seeking growth opportunities to meet those expectations is crucial for business growth in terms of revenue and profit.
2. Technical skills
“A great Product Manager has the brain of an engineer, the heart of a designer, and the speech of a diplomat.” – Deep Nishar, managing director at SoftBank.
But that doesn’t mean that a Product Manager is expected to perform all their functions. On the contrary, it is expected that a Product Manager has a general view of the products’ functions and understands them well enough to connect and coordinate within cross-functional teams.
3. Customer skills
Knowing the target customer is not enough. A Product Manager should be well versed in their problems, needs, and interests too. Without proper customer knowledge, it’s difficult to successfully launch and run a profitable product.
Now, let’s see how a Project Manager’s responsibilities and expertise differ from a Product Manager’s.
Responsibilities of a Project Manager
To make a project successful, a Project Manager is assigned the following responsibilities:
- Initiate the project
Unlike a Product Manager, the role and responsibilities of a Project Manager are hierarchical. To begin with the project, a Project Manager first needs to define key metrics like project scope, objectives, goals, and budget. This is the main difference between Product Manager and Project Manager.
- Planning and Scheduling
Once the project goals are established, the Project Manager breaks them down into actionable tasks that can be delegated to the team. According to the budget and project completion timeline, the Project Manager plans schedules the tasks and assigns resources to them.
- Project Execution
The Project Manager’s prime responsibility during this phase is to make sure that everything is going according to the plan and schedule. To efficiently track the project’s progress, tasks, and timelines, a Project Manager uses various project management tools. When a Project Manager needs to multitask or manage more than one project, such tools come in handy.
- Risk and Issue Management
The team may need guidance to solve the issues they might face during the project development. It is the Project Manager’s responsibility to advise the team and help them find solutions to said issues on time. Also, a Project Manager should monitor the project development closely to avoid potential risks that might delay the project’s completion.
- Project Communications
Lead team meetings to track the tasks assigned to resources and communicate recent changes in the scope or schedule of a project. Also, PjM’s should frequently update the stakeholders with current project progress.
Expertise for a Project Manager
Like a Product Manager; strong leadership, informed decision-making, and excellent communication are must-have skills for a Project Manager. But apart from that, there is some other expertise the role demands to ensure efficient and effective project execution. Such as:
1. Planning & scheduling
Actively plan, prioritize and schedule tasks and timelines, consistently communicate new changes to the team, and client, and efficiently manage resources required for the timely completion of a project.
2. Risk management
Taking calculated risks for project benefits and avoiding potential risks is a non-negotiable skill for a Project Manager.
The ability to foresee and plan for different scenarios in a project and to take corrective action if required is important to ensure timely project completion. An understanding and experience in conflict management between various departments in different locations is also a skill required for Project Managers.
4. Time management
Projects are time-sensitive; not being able to adhere to the timelines will cost more money and time. Completing deliverables within the expected time and budget despite facing occasional issues is a skill that comes only with experience.
Now that we understand the difference between Product Manager and Project Manager, let’s have a look at the similarities between both roles.
Similarities Between Product Manager and Project Manager
- Both strive to maximize product value and quality, increase customer satisfaction, deliver a profitable product and enhance business growth.
- Both are required to be excellent communicators and problem solvers and should have great decision-making and team management skills.
- Both report to stakeholders and clients. The Product Manager informs them about the product’s goals, vision, features, forecasts, and growth strategy. Meanwhile, the Project Manager reports about the team, resources, scope, timelines, and cost.
- Both should have excellent knowledge about the industry, target customers, and technology.
- Both are responsible for defining KPIs to make sure they’re meeting the business and customer goals. The Product Manager defines KPIs for product value, strategy, profit, revenue, and future growth. The Project Manager defines KPIs for project scope, timelines, schedule, and budget.
Why are these role differences important?
After learning about Product Manager and Project Manager role differences and similarities, you might say why one cannot do the other’s work. They can. But should they? What will happen if both roles are performed by the same person? Why are these differences so important? Let’s talk about these questions in the following section.
1. Potential Bottlenecks – Taking care of both product and project will require a person to juggle the tasks. At one moment, the manager might be working on future improvements for the product, and the next moment leading a team meeting to check its weekly status. At one moment, the manager might be scheduling timelines and the next one pitching a product idea to stakeholders. The latter will most likely impact the product’s quality and project performance.
2. Insufficient expertise – The Product Manager doesn’t need to be an expert in technical skills but should have sufficient knowledge so team communication can be smooth. The Project Manager doesn’t need to be an expert in business skills but should have sufficient knowledge to understand the product’s strategy, goals, and KPIs. When one person plays both roles, the manager is expected to be an expert in both technology and business skills. And if that is not the case, this could lead to timeline delays and poor performance. Hence, it is better if an organization considers these roles and expertise differences before hiring a Product or Project Manager.
3. Challenges – Throughout the product and project’s lifecycle, there will be certain challenges a manager will face, but may not have the specific skill set to come up with solutions for them. To handle such scenarios, a wise decision would be to have a manager who has experience dealing with such challenges. For instance, picture a Product Manager who is experienced in resolving business-related issues and a Project Manager who has expertise in resolving technical issues. This will ensure well-timed resolution without compromising performance, time, and budget.
Now that we understand the Product Manager vs Project Manager concept, let’s talk about the Product Manager vs Product Owner concept.
What’s a Product Owner? What are their main responsibilities?
In Scrum, the Product Owner is a role rather than a title. The Product Owner acts as a business representative in the development team. They own the product backlog to make sure that the development team builds the best possible product, in the shortest time, through the most cost-effective means.
A Product Owner is someone who is accountable for maximizing the products’ value, team, and customers. A Product Owner is a decision-maker, a go-to person, a visionary, and more importantly a communicator. They are responsible for deciding what is ready to be released to the customers. Some other Product Owner roles and responsibilities are:
- Manage the Product Backlog
The Product Backlog is the list of all the items needed to deliver the product and the Product Owner is responsible for managing it. This is the most important responsibility among the various other Product Owner roles. It includes:
- Writing the product backlog based on the direction given by the stakeholders and Product Owners’ own understanding of the user stories.
- Plan and prioritize the backlog items based on the product roadmap, strategy, and business goals.
- Update the product backlog frequently to reflect the changes in tasks, resources, and timeline.
- Make the list of backlog items accessible to all stakeholders to keep them updated with the ongoing progress.
- Convert product goals into development tasks
The Product Manager establishes the product goals according to the product strategy, roadmap, and budget. The Product Owner then converts those goals into the deliverables a.k.a backlog items according to project scope, timeline, and available resources.
- Be the voice of the Customer
Have a deep understanding of the business domain, the customer’s problems, what their needs are, and what customers want. Convert customer issues and complaints into user stories. Prioritize and rank those user stories (story points) in the product backlog.
- Oversee the product development
The Product Owner ensures that development work is in sync with the vision, goals, and objectives set for the product. Inspect and evaluate development progress consistently. Be available to answer the development team’s queries regarding product requirements.
- Act as a primary liaison
The Product Owner acts as a liaison between the development team, the customers, and the stakeholders. Their responsibility is to communicate the customer needs and feedback to the stakeholders and review the changes or updates required to develop the product with maximum value. Work with the development team to make sure those changes are getting implemented as per the product roadmap and schedule.
Product Owner vs. Product Manager. Do you need to hire both?
In simple terms, the Product Manager decides what products to build next, and the Product Owner helps the development team to build those products. The Product Manager owns the product roadmap. On the contrary, the Product Owner owns the product backlog and user stories. A Product Manager’s success is measured by product conversion, revenue, and profit, whilst the success of a Product Owner is measured by the backlog, completed stories, and other development metrics.
But, what are the main differences between Product Owner and Product Manager? Oftentimes organizations struggle with titles and whom they should hire. As both Product Manager and Product Owner roles are so different, it is wise to find answers to these questions before filling the position:
- What outcome are you looking for? Is it business-, product-, or development-related?
- What are your requirements?
- What are the struggles, problems, and issues your team is facing? And who can help resolve them?
If your business is small, hiring either one of them should be enough. However, if you have a large team or want to attract an expert candidate, you might want to hire both a Product Owner and Product Manager. While the Product Manager will be looking out for the overall product lifecycle progress; the Product Owner will effectively manage the Product Backlog to maximize the Product’s value resulting from the work of the Scrum Team.
So instead of focusing on the titles, focus on the tasks that need your most immediate attention, and then hire the best-suited person to perform those tasks.
A Product Manager gives you the vision.
A Project Manager turns that vision into an action plan.
A Product Owner helps to turn that action plan into a product backlog.
As you can see, the Product Manager, Project Manager, and Product Owner play an extremely valuable and crucial role in helping an organization bring its products to market successfully.
There’s no role bigger or better than another. All three equally contribute to the success of a product. In the end, having a team with these 3 roles (or not) all comes down to the needs and requirements of your organization.
A smaller enterprise that does not have a huge budget can begin by hiring someone with a multidisciplinary skill set to manage both their project and product needs.
Whereas larger organizations that develop frequent and sizable products will benefit more from having a greater team if they hire individual experts for small areas.
To summarize, here are a few key points that’ll help you remember the distinction between these three roles. When it comes to pinpointing the differences between Product Owner and Product Manager or the main difference between Product Manager and Project Manager, we should consider the following points when hiring a management resource for your team.
Hire a Product Manager to drive the success of a product through its entire life cycle, including the following reasons:
- Your company is experiencing growth
- If you’re looking to build a new product
- You want to scale an existing product
- Need a thought leader for your organization.
Hire a Project Manager to ensure effective delivery of quality products, including the following reasons:
- Want to successfully launch a product within timelines and budget
- Looking to organize and manage resources efficiently
- Need to facilitate teamwork between different departments
- Want to maximize efficiency and minimize cost.
Hire a Product Owner to oversee the actual product throughout the development cycle, including the following reasons:
- Want to develop a high-quality product and get things done on time
- Need a decision-maker and problem solver for a development team
- Need a communicator who understands both business and technology
- Want to keep up with agile/scrum best practices and trends.