Introducing one of the most popular roles in technology. Find what product management is, what skills product managers have and why product management is important.
Introduction to product management
Product management is a fast growing and integral role within (technology) organizations that seek to create and deliver successful products. In this article, we will explore what product management is, why it is important, the skills required to excel in this role and the average remuneration and popularity of the job.
“I often get asked what a product manager is. What do they do? Where do they come from? How do you get into product management? Why do they like sharpies so much?“
Martin Eriksson, Mind the Product
Product managers operate at the intersection of business, technology and user experience. Mind the Product; What, exactly, is a product manager?
What is product management?
Product management is a job function, typically within companies with a website or digital presence, with the remit of ideating, conceiving and delivering new products that meet user needs and deliver business value. In particular it has developed as its own distinct discipline within technology companies.
“Product management started out as brand management, and in the software industry was redeveloped to fill a gap in engineering. It then proliferated across companies.”
Ellen Chisa, Evolution of the Product Manager
Product management is the process of overseeing the ideation, development and delivery of a product or service. A product manager is responsible for identifying customer needs and translating them into a product that meets those needs. They look for differentiation or product market fit which will deliver business value. They work with cross-functional teams, including engineers, designers, marketers, and salespeople, to bring the product to market. Typically they work within the engineering function of technology organizations.
“Definition: A Product Manager helps their team (and company) ship the right product to their users.”
Josh Elman, Greylock Partners, ‘Let’s talk about Product Management’
The role of a product manager is critical because they are a key function in ensuring that the product is meeting and exceeding customer needs, and that by meeting and exceeding those needs that the product (and the investment to create it) creates value for the company. This can be defined as profit, brand or lifecycle value. They own individual product areas and are responsible for setting the product’s vision and strategy, defining its features and benefits, and ensuring that it is launched successfully. Typically product managers are a mix of business minded, user empathetic, design smart and delivery focused.
Day-to-day the product manager acts as the strategic and process partner to the engineering manager, who delivers the technical aspects of the build. They additionally act as the glue between the product and engineering department and other functions or stakeholders within an organization, devoting time to managing ideation, feedback loops and delivery and ensuring clarity on what is happening and alignment at all levels. Stakeholders can include VP and C-suite level executives, and adjacent functions can include marketing, sales and design teams.
We’ve written in more detail about what product teams do here.
What is a product?
Gartner defines a product as:
“A product is a named collection of business capabilities valuable to a defined customer segment. A product may be just software and data. Alternatively, it may comprise any combination of software, hardware, facilities and services, as required to deliver the entire product experience.”
Gartner Glossary, Information Technology
For us, a product is a digital experience which provides a user with value.
Why is product management important?
Product management as a discipline has an essential role in ensuring organizations stay competitive in their industry. By identifying customer needs and developing products to meet those needs, companies can gain a competitive advantage. Product managers tend to obsess about differentiators, core USPs and customer advocacy in order to create a winning strategy. Finally, product management helps to ensure that products are profitable for the company. By identifying, sizing and prioritising high impact features and projects, product managers have a direct impact on revenue and often cover their costs.
Product managers are also a critical listening function within technology companies. By listening to customers, sales, marketing teams they are uniquely appointed to be able identify risks and opportunities faster than siloed functions. As customer evangelists they often keep the company honest by raising red flags and creating guard rails for stakeholders.
Additionally their role as a communicative function focused on effective delivery means they play a critical role in disseminating information on prioritization, the status of projects and decision making. They additionally manage stakeholders, keeping them up-to-date with projects and roadmaps and help balance trade-offs across the organization.
What skills are required for product management?
Josh Elman, Greylock Partners, ‘Let’s talk about Product Management’
Product management skills commonly referenced in job adverts or by thought leaders in the field break down into soft and hard skills. We’ve written extensively on the soft skills and the hard skills required for product management elsewhere, so we’ll summarize here.
Soft skills required for product management
“In product management, there’s an art and a science. The “art” gets dismissed as soft skills. When PMs fail, it’s usually because of “The Art.” The most important thing you can do early in your career is grow these skills. Don’t let them be dismissed as “soft skills,” don’t get lured by the promise of tactics and techniques: they’re essential, but the craft depends more on the art over the long term.”
Ken Norton, Bring the Donuts, ‘The Art of Product Management’
“What makes one product succeed where another fails? Could be the design. Could be the analytics captured and dissected. Could be the technology behind it, or the features and functionality it offers. Maybe it’s the market. Or the customer. Or the brand.
I think that is just scratching the surface.
I say it’s the people behind all of these things. The way they think. The way they communicate and relate. The way they handle the tough times. The way they make decisions and show up.“
Kate Leto, Kate Leto, ‘Build Essential Product skills with the Human Skills Wheel’
There’s a series of perspectives out there on which soft skills are most critical, but there is general consensus that a mix of the below are key:
Empathy: Empathy is the ability to identify and to a degree ‘feel’ another person’s feelings. Product managers need to be able to understand the needs and desires of their customers to create products that meet those needs. They also need to have sufficient empathy to understand the needs, concerns and unpick the issues of adjacent or critical company teams. An example might be understanding the feedback from sales or marketing teams regarding the product and engaging with their point of view.
“So why is empathy so important for developing good products? Products tend to either solve a problem or create delight. It’s hard to deliver on either without empathy. You can’t really solve a problem without truly understanding it.“
Teresa Torres, ‘5 Steps for How to Develop Empathy’, Product Talk
Communication: Product managers must be good communicators. They should be able to listen and understand customers and stakeholders, and clearly communicate their ideas, work and timelines. They should additionally be able to persuade others and exercise influence over disparate groups of colleagues. Often this means mastering the art of saying no in a polite and constructive way, since product managers often ‘hold the keys to the kingdom’ in terms of access to resources.
Adaptability / creativity: Lenny Rachitsky recently discussed the ‘Zero Interest Rate Phenonmenon Product Manager’ with Casey Winters (Pinterest, Eventbrite, Airbnb, Tinder, Reddit, Grubhub) where they covered the rise of the risk-adverse, framework reliant PM afraid to take risks or unable to work in the grey zone without research and data to back them up. PMs need to be able to make decisions with limited information, adapt to incomplete data, limited resources, and manage limited risk, by shipping products to learn from the results
“Startups typically require us to wear lots of hats. You have to write SQL. You have to talk directly to customers. You have to prep marketing and sales. Most importantly, you have to make a lot of decisions under uncertainty, which you wouldn’t necessarily expect a PM to do at, say, a Google, but it all boils down to using your brain in different ways.“
Casey Winters, ‘Thinking Beyond Frameworks’, Lenny’s Podcast
Leadership: Product managers have to lead through influence, rather than because they manage or lead the team. Since they work cross functionally, they need to be able to inspire others to deliver, by setting a compelling vision and getting buy-in for the what, how and when.
Hard skills required to be a product manager
Strategic thinking: Product managers need to be able to set the product’s vision and strategy, considering factors such as competition, market trends, and customer needs. That means a mix of business acumen, data driven reporting and customer insight coupled with rigorous decision making, analysis and impact sizing.
“Good product managers know the market, the product, the product line and the competition extremely well and operate from a strong basis of knowledge and confidence. A good product manager is the CEO of the product. A good product manager takes full responsibility and measures themselves in terms of the success of the product. The are responsible for right product/right time and all that entails. A good product manager knows the context going in (the company, our revenue funding, competition, etc.), and they take responsibility for devising and executing a winning plan (no excuses).“
Ben Horowitz, ‘Good Product Manager/Bad Product Manager’, a16z
Decision making: Product managers need to be able to bring disparate groups together and facilitate decision making. This can range from identifying and moving the key decision maker to a decision, or taking quick decisions themselves where necessary. They don’t always need to decide themselves (for big decisions) and they don’t always need to find a decision maker (for small decisions), but they do need to possess the right skills to identify Type 1 (hard to reverse) or Type 2 (easily reversible) decisions. Where it’s a Type 1 decision they should also be able to get the key people into the room & walk them through a decision making process.
Technical knowledge: Product managers need to have a basic understanding of technology to be able to work effectively with engineering teams. Some product management roles require different levels of technical skills, i.e. for product managers working with AI, more advanced data science knowledge is key. Technical product management is its own sub-discipline within the field. Once established as a product manager, product managers tend to develop in certain disciplines; i.e. become more focused in certain areas, such as payments.
Project management and delivery enablement skills: Product managers need to run a tight ship in terms of scoping and documenting their thinking, managing competing priorities and delivering projects on time to expectation.
Is product management an attractive job?
Product management roles are relatively skilled and senior and remunerated as such. According to Glassdoor, the average salary for a Product Manager in the United States is around $116,000 per year, while in the United Kingdom it is around £56,000 per year.
Salary levels vary with company and location. For a snapshot as of March 2023 see below.
Product management salaries in the United States:
- Junior Product Manager: $65,000 – $95,000 per year
- Product Manager: $90,000 – $140,000 per year
- Senior Product Manager: $120,000 – $180,000 per year
- Director of Product Management: $160,000 – $250,000 per year
- VP of Product Management: $200,000 – $350,000 per year
Source: Glassdoor
Product management salaries in the United Kingdom:
- Junior Product Manager: £30,000 – £45,000 per year
- Product Manager: £45,000 – £70,000 per year
- Senior Product Manager: £65,000 – £95,000 per year
- Director of Product Management: £85,000 – £130,000 per year
- VP of Product Management: £110,000 – £180,000 per year
Source: Payscale
According to LinkedIn, the number of Product Manager roles in the United States has increased by 32% year-over-year, with over 21,000 open positions as of March 2023. Similarly, in the United Kingdom, the number of Product Manager roles has grown by 29% year-over-year, with over 5,000 open positions as of March 2023.
In terms of keyword search volume, or global search interest, Google Trends data shows that the search term “Product Manager” has consistently high search volume over the past five years, with peak interest in the United States and the United Kingdom.
Further reading on product management
What do product teams do?
Typically product teams are focused on the experience or service that a product needs to provide: why, how and what. They create the rationale, the business case, the strategy and break down the what into tasks so that other teams can understand and execute on building the actual product. They also often interview users and design tests to prove their assumptions around the product in the market. We’ve written more about what they do here.
What is a product in technology?
A product is a digital experience which provides a user with value. Typically they then exchange that value for items of financial value, such as data or money.
What is the role of product management?
The product manager creates the vision for the product, the business case and the organizational buy-in to proceed with building the product. They then organize an engineering team to deliver the product, keeping stakeholders updated and preparing the post launch plan alongside other functions, such as sales or marketing.
