Product Management and Project Management: Alignment and Differences
August 2023
Product manager and project manager roles share many similarities but also exhibit some significant differences. Both positions require strong leadership skills, effective communication, problem-solving abilities and collaboration with cross-functional teams. However, they differ in their scope of responsibilities and areas of focus. This article explores the overlaps and gaps between the skill sets and asks for suggestions on if and how the disciplines can support and extend each other.
The Rise of Product Management
In the last five years, product management has seen a significant uptick in interest, jobs and media coverage. According to Gartner data, as cited by CIO1, by the end of 2023 it is estimated that 40% of large enterprises will manage internal business capabilities as products to drive continuous innovation and competitive advantage. Also, more than one-third of Fortune 100 companies have a chief product officer (CPO), showing a 41% growth rate over the past three years.2 Finally, more than 2,000 CPO jobs and 170,000 product manager positions are currently posted on LinkedIn.
It is likely that several factors are contributing to this increase, including:
- The Rise and Necessity for Digital Transformation. As software becomes more integral to products and services, these software-oriented projects are never “complete” since websites and services continue to evolve to meet new technology and customer demands.
Technology companies like Apple, Alphabet, Meta and Netflix have adopted product life cycles for software development to avoid the loss of information associated with handoffs to separate groups for support and enhancements. In industrial engineering, there is a physical asset to hand off and sustain. However, as knowledge is the core asset in the knowledge-work space, potential failure points such as handoffs can be eliminated by moving from projects that are temporary endeavors to long-serving product teams.
As technology powers more businesses, the ability to deliver digital products is becoming everyone’s priority. McKinsey3 reports that computer engineers now make up a quarter of Goldman Sachs’ workforce. The trend is happening across many industries. Software-enabled technology is driving unprecedented digital product growth.
- Focus on the Customer Experience. Technology like the internet, artificial intelligence (AI)-powered search and crowdsourced reviews has made cross-shopping products and services easy and frictionless. This has created a hypercompetitive environment that focuses on the customer experience and reducing time to market. To stay ahead, organizations must respond quickly to new technology and customer demands.
Product management applies an external market focus to product specification, design and deployment. Additional research by McKinsey4 lists skills in brand experience, customer-needs awareness, competitor analysis and launch planning as highly valued or valued higher than internally focused technical planning, estimation and delivery. This is because if the market moves even a little, then well-executed products can land flat or be quickly overtaken by something perceived as more desirable. For digital products operating in an environment of unlimited global competition, success needs market fit and execution excellence.
- Increased Adoption of Agile Approaches. Agile approaches have gained popularity partly because they encourage a customer-centric approach by prioritizing frequent customer involvement and feedback, ensuring that products and services align with their expectations. Moreover, the transparency offered by agile practices allows teams to monitor progress in real time, identify potential issues early on and make necessary adjustments swiftly. Overall, agile methods provide organizations with a flexible, adaptive and efficient approach that is essential in today’s dynamic business landscape.
PMI has seen strong interest in agile approaches from its members. After A Guide to the Project Management Body of Knowledge (PMBOK®Guide), the Agile Practice Guide remains the most frequently downloaded publication. Additionally, the Disciplined Agile® (DA™) tool kit is employed by many organizations to help choose and fine-tune their ways of working.
Overlaps and Gaps with Project Management
While both product and project management are concerned with transforming ideas into outcomes (vision to value), their mindset and frames of reference differ. For instance, product life cycles tend to be longer than project life cycles.
Trying to differentiate between typical product and project management is problematic because the skills and techniques employed can be as unique as the products and services being developed. So, for the purpose of this article, we will discuss the typical practices and tendencies observable in about 75% of cases.
Therefore, while a few product managers may use earned value (EV) to track product development progress, this is an exception rather than a rule. Likewise, some project managers may be experts in competitive analysis, market trends and user experience (UX), but most project managers are not.
The Heatmap Analogy
Website analytics and retail sales analysts use heatmaps to visualize where people spend most of their time on a website or looking at products in a store. These heatmaps highlight attention concentrations rather than every visitor’s complete behavior. See Figure 1 and Figure 2.
Figure 1 – Website attention heatmap
Figure 2 – Shop customer attention-duration heatmap
The following visualizations take the same attention-concentration view of where product and project managers tend to focus. They are simplified generalizations, not explicit declarations that “project managers do not think about market segmentation” or “product managers do not employ detailed estimation.” Due to the diversity of product and project management work, any such statements could be easily proved wrong with specific examples to the contrary. So, please think about this in terms of “most product managers, or most project managers, most of the time.”
Dimension 1: When—Product and Project Life Cycles
Product life cycles tend to be longer than project life cycles. Product life cycles include upfront market research and extend through development, operation and, eventually, decommission phases. See Figure 3.
Figure 3 – Product life cycle
By comparison, projects are temporary endeavors that tend to be shorter and are undertaken to deliver a unique outcome or service or affect a change. If we visualize product and project life cycles on the same x-axis timeline using the heatmap idea discussed earlier, we would see projects occupy the central subset of the typical product life cycle. In contrast, product management has a longer footprint. See Figure 4.
Figure 4 – Product and project management focus across the product life cycle
Dimension 2: What—Product and Project Activities
There is considerable overlap in the work activities undertaken by product and project managers. They both align work to strategy, manage stakeholder groups and prioritize work. These activities and responsibilities, with some example tasks, are shown on the y-axis. See Figure 5.
Figure 5 – Activities and responsibilities (y-axis) extension to the product life cycle (x-axis)
In this space, project management activities focus on the region’s central, lower portion. They concentrate on work orchestration and stakeholder engagement more than product strategy. See Figure 6.
Figure 6 – Project management heatmap of common attention areas
Product management also performs these activities but with stronger emphasis (product strategy) and broader coverage (longer life cycle). See Figure 7.
Figure 7 – Product management heatmap of common attention areas
This two-dimensional view comparing the timeline and activities employed is helpful but misses an essential difference between product and project management. This concerns the “Who do they serve?” or “Who are they focused on and trying to delight?” Adding a third z-axis dimension allows us to see a critical internal versus external distinction.
Dimension 3: Who—Product and Project Service Focus
While both project and product managers aim to serve and delight customers, project managers, on the whole, tend to combine this with an internal sponsor focus. In contrast, product managers combine a customer focus with an external market focus. Figure 8 depicts how project management focuses on serving the Customer and Internal Sponsor. The project management activities are shifted to the back of the space, covering the Customer and Sponsor/Internal viewpoint on the z-axis. See Figure 8.
Figure 8 – The “Viewpoint/Service Focus” (z-axis) heatmap for project management
Using the same three-dimensional landscape, product management occupies a front-shifted Customer and Market/External focus. See Figure 9.
Figure 9 – The “Viewpoint/Service Focus” (z-axis) heatmap for product management
“All models are wrong, but some models are useful.”
George Box, British statistician (1919-2013)
It is worth reiterating that these plots aim to illustrate differences between product and project management. Product managers still have internal sponsor responsibilities, just as project managers should apply external market analysis to realize benefits management. It is just not their core focus. Instead, these are areas that need awareness and attention, like risk management, but not as much effort as, say, task execution.
Even with this deliberate, difference-focused view, there is tremendous overlap between product and project management. Superimposing both coverage plots on the same image shows around 60% overlap. See Figure 10.
Figure 10 – Project and product management heatmap overlayed showing around 60% overlap
Okay, But How Does This Affect Me?
Product management is here to stay and is expanding rapidly. Maybe it is not widespread in your industry yet, but the growth of agile and digital transformation can help gauge its trajectory. As software spread into the core business of entertainment, finance and retail, it was followed by the pervasive adoption of agile approaches that better supported how these software teams worked. We are now seeing a similar adoption of product life cycles that better fit the staffing and funding models for these long-term digital initiatives.
Project managers can be part of the migration, contributing valuable work orchestration and internal sponsor ideas, or they can stand back and watch product managers fill in the gaps themselves. Historically, not moving forward at the same pace as the competition has the same impact as moving backward. When we look at the overlap between the product and project management worlds, there likely are a couple of ways to contribute. We therefore pose the following questions:
- Can we help project managers become product managers—if this is a field they want to explore?
- Can we equip product managers with project management skills—if this could make them more successful?
See Figure 11.
More Questions
This article highlights some of the core commonalities of product and project development as performed by most product and project managers most of the time. However, maybe that does not resonate with you.
- Is there a better way to illustrate and describe the commonalities and differences?
Are there criteria beyond the “when,” “what” and “who” examined here? Does the “why” change? Both approaches strive for successful outcomes and delighted stakeholders, but maybe there is more? Is there a “where” difference? What other dimensions might there be?
- Are there other differences not examined in this article?
Maybe product and project management present a more fundamental division, like oil and water, that cannot be mixed. Some believe agile approaches and industrial project management are like this. Friction between theories or practices is common in management thinking. Mary Parker Follett was a management writer around the time of Frederick Winslow Taylor. She emphasized the people side of management while Taylor expounded on work efficiencies. Taylor’s ideas took off and fueled the Industrial Revolution, while Follett was primarily forgotten until Peter Drucker reintroduced her views on developing human capability. The agile versus scientific management debate misses the duality of success. Hopefully, we can embrace more of a “Genius of the AND versus the Tyranny of the OR,” but maybe they are incompatible.
- Are product and project management mindsets just different tools in the same value delivery toolbox that can be used together, or are they mutually exclusive mindsets that do not mix?
Summary
Product Manager has become a popular job title due to the increased focus on digital transformation, customer-centricity and the rise of agile methodologies in business. In today’s highly competitive landscape, organizations recognize that delivering products that directly address customer needs is crucial for success. The growing popularity of agile approaches has further emphasized the need for effective product management.
As organizations strive to deliver desirable products faster and more efficiently, product managers are critical in coordinating cross-functional teams, streamlining processes and prioritizing feature releases. These skills have considerable overlap with modern project management competencies. A better understanding of the fits and gaps between the roles could ease career migration and benefit both communities with applicable skills and tools.
References
[1] Boulton, C. (2021, January 14). Product-based IT: A bold shift to business value. CIO.
[2] Berring, A. (2023, January 9). Retention through career opportunity: How to hold on to product management talent. Product School.
[3] Srivastava, S., Trehan, K., Wagle, D., & Wang, J. (2020, April 20). Developer velocity: How software excellence fuels business performance. McKinsey & Company.
[4] Gnanasambandam, C., Harrysson, M., Srivastava, S., & Srivathsan, V. (2018, November 28). The product management talent dilemma. McKinsey & Company.