Product Management

The Synergy Between Product Management and Product Development in Agile Environments

Published on 25 July 2024

Written by Martin Hinshelwood

6 minute read

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In the dynamic world of product creation, success hinges on two critical components: Product Management and Product Development. These elements, while distinct in their functions, are deeply interconnected and essential for delivering products that truly meet market needs. In this post, we’ll explore the roles of these two components, how they complement each other, and the importance of their integration in the agile process.

Understanding the Two Key Components

When building products, it’s crucial to recognize that Product Management and Product Development are the twin pillars of success.

Product Management focuses on what to build.
Product Development addresses how to build it.

Though these functions are different, they need to work in harmony to ensure the product’s success. Product Management sets the strategic direction and goals, while Product Development brings these goals to life through actual delivery.

The Interplay Between Product Management and Product Development

It’s a common misconception that Product Management and Product Development operate in isolation, with one merely handing over tasks to the other. In reality, they are part of an integrated story. There’s a continuous interaction and a necessary overlap between these two domains. A useful analogy here is the concept of Evidence-Based Management (EBM), which can help us understand how these functions not only interact but also complement each other.

Product Management’s Role: Guiding the Vision

Defining Market Value

At the core of Product Management is the goal of creating market value. This is achieved by focusing on two main aspects:

Current Value: This represents the features and capabilities that exist in the product right now. These need to be maintained, removed, or enhanced based on their current performance and relevance.
Unrealized Value: This is where Product Management often needs more focus. It includes the potential features and capabilities that the product could have but doesn’t yet. This is about identifying new markets, new users, and new opportunities to grow the product’s reach and value.

Maintaining and Growing Market Value

To maintain and grow market value, Product Management must balance between supporting existing users and aggressively pursuing new opportunities. A decline in user engagement is inevitable if the product remains stagnant, even if incremental updates are made.

A great way to think about this is by comparing it to Netflix’s approach to content creation. As a series progresses, viewership naturally declines over time, even if new seasons are introduced. The key question is whether the investment in new content can maintain a sufficiently high level of interest to justify further development.

Similarly, in Product Management, while it’s important to support and maintain the current investment, it’s equally crucial to push forward into new markets and capture new users. This proactive approach is what drives value creation.

Strategic Direction and Vision

Ultimately, Product Management is about leading the charge. It’s about defining where the product is headed, what the strategic goals are, and how to achieve them. This leadership in direction and strategy is what ensures that the product remains relevant and valuable in a constantly changing market landscape.

Product Development’s Role: Bringing the Vision to Life

While Product Management sets the vision, Product Development is the engine that brings it to life. It is the organization’s capability to deliver on the promises made by Product Management. This process is broken down into two key areas:

1. Ability to Innovate

Innovation is measured by how much time and resources can be allocated to developing new features and functionalities versus maintaining and supporting existing ones.
It’s about ensuring that there is a balance between creating new value and sustaining current value.

2. Time to Market

This measures how quickly a product can move from concept to market-ready.
It’s crucial for staying competitive and ensuring that the innovations made are delivered to users in a timely manner.

The Importance of Engineering Excellence

For Product Development to be effective, there must be a strong emphasis on product quality and engineering excellence. Agile Product Development is about building high-quality, usable, and working products that meet the needs of the market. This requires a commitment to continuous improvement and the ability to respond quickly to changes in the market or in user feedback.

The Agile Product Management Cycle

Leading with Strategy, Vision, and Validation

In an agile environment, Product Management leads with a focus on strategy, vision, and validation:

Strategy: Determining the long-term goals and the direction in which the product should move.
Vision: Setting a clear and compelling picture of what the product will achieve.
Validation: Ensuring that the product is on the right track by continuously gathering feedback and making necessary adjustments.

Supported by Agile Product Development

To realize the vision set by Product Management, there must be a strong collaboration with Product Development. This collaboration allows for the continuous collection of data, feedback, and telemetry, which in turn informs Product Management whether the product is moving in the right direction.

Feedback Loops: Agile Product Development enables the creation of quick feedback loops, ensuring that products are tested and validated in real-time. This helps in making informed decisions about whether to continue on the current path, pivot, or stop altogether.
Building for Value: The ultimate goal is to build products that deliver maximum value to users. By focusing on both the current and unrealized value, Product Development supports the vision of Product Management, ensuring that every product increment is valuable and aligned with market needs.

The Continuous Cycle of Improvement

The interplay between Product Management and Product Development creates a continuous cycle of improvement:

Experimentation: Running small experiments to test new ideas and features.
Delivery: Rapidly delivering these experiments to users to gather feedback.
Adjustment: Using the feedback to make adjustments and improvements.

This cycle not only drives the product forward but also ensures that it remains relevant and valuable in a rapidly changing market.

Conclusion: The Integrated Approach to Product Success

The success of a product lies in the seamless integration of Product Management and Product Development. By understanding and leveraging the strengths of both, organizations can create products that not only meet the current market demands but also anticipate and fulfill future needs.

To recap:

Product Management defines what to build by focusing on market value, strategy, and vision.
Product Development delivers how to build it by focusing on innovation, time to market, and engineering excellence.
Together, they form a continuous cycle of improvement that drives product success.

In your own product journey, remember that the synergy between these two functions is key. By ensuring that they work together harmoniously, you can maximize the value your product delivers and ensure its long-term success.

🚀 Key Takeaways:

Align your product strategy with market value and future needs.
Prioritize continuous improvement and quick feedback loops.
Foster strong collaboration between Product Management and Product Development.

By adopting this integrated approach, you’ll be well on your way to building products that truly make an impact.

When we’re building products, there are really two main parts of the consideration that we have. We need to think about product management and we need to think about product development. So product management is deciding what we’re going to go build. Product development is figuring out how we’re going to go do that, and they need to be able to complement each other in a way that we’re working together towards a successful working product. But product management leads the product development. The product management sets the direction, the strategy, the goals that we’re trying to achieve, the high-level goals, strategic goals, and product development focuses on the actual delivery of those goals and delivery of those outcomes.

Now, that doesn’t mean that there’s no product management in product development or there’s no product development in product management. There’s definitely a bleed over between those two topics. They’re not a distinct thing that somebody hands over from here to here. They’re an integrated story, and I think a good analogy for that is the evidence-based management story that helps, at least it helps me think about not only how they interact with each other, but how they complement each other and how they need each other. Product management and product development need to be successful and working together to be successful.

So the way evidence-based management breaks this down is you’ve got two sets of metrics at the top of the diagram, which is market value. So in the context of market value, that’s where we’re talking about product management. We’re focusing on two things: we’ve got our current value in our product, the stuff that’s there that maybe we need to maintain, maybe we need to remove, maybe we need to augment in some way. That’s the features and capability that we have in our product right now, and all of those features and capability in our product right now should all work. That working usable product we have increments that work, and our current increment, our current product, is our current value. That’s what we’ve currently got; that’s part of our market value.

If you’re not in a consumer-facing world, then think about the market that you deliver to as inside of your business. It doesn’t necessarily have to be outside of your business; it doesn’t have to be a commercial market. It could be an internal market inside your business. And then the other side of that is the unrealised value, and that’s where I think a lot of product management maybe doesn’t focus but should focus, in this unrealised value area, which is the stuff that our product could do that it doesn’t do yet. The net new functionality that we want to bring in, the net new functionality that we want to bring into the story, is going after new markets, new users. We want more people to be using our product than were using it before because you’re always going to have a decline in the people that use your product if the features remain stagnant. Even if you add new capabilities to an existing feature, there’s still that tail-off that we’re keeping our existing user base happy, and our existing user base is always going to juice over time if we don’t do anything.

We might still be bringing in new customers, but the existing people are going to tail off. That’s how I think about it. I think about it a lot like Netflix creating new content. If you have an existing show, the viewership for that show is going to decline over time. It’s not new anymore; people that have watched it are not necessarily going to watch it again, although some people do, and it’s going to decline over time. That’s a little bit more drastic than a product that people use in a business, but the idea is that you’re not gaining a lot of new customers. When you do a second season of an existing season, you know the viewership is going to be less in the second season. It’s always less. But does it maintain high enough for you to justify the investment?

What we really want to be doing is focusing as much as we can, while supporting and maintaining our existing investment in our product, in our story, in our existing customers. We also want to be aggressively going after new markets and new customers. That’s product management leading. Where are we going? What are we trying to achieve? What’s our direction? What’s our strategy for building a more valuable product? Value creation; we’re creating more value. That’s that unrealised value, and those two together, unrealised value and current value, is that agile product management story that leads to market value. That’s what we’re measuring: market value.

The activity is product management, but then we’ve got the product development, which is supporting that story. Product development is our organisation’s capability. That’s our ability to deliver the things that we identify that need to be delivered and perhaps input to those things as well. Provide part of the feedback cycle; that’s what I mean by the bleed over. Product development is going to have good ideas too that we might want to implement. But that’s broken into two sets of metrics in product development. One is the ability to innovate. That’s how much time can we spend on net new versus maintaining and supporting existence. That’s how we’re measuring that amount of time that we spend on net new.

Then the other side of that, to balance it off, is time to market. How quickly can we go from an idea to getting it into production? So ability to innovate and time to market both talk about product quality, talk about engineering excellence. That’s our agile product development. Product development is about building high-quality, usable, working products that are of value to somebody. That’s just product development. Agile product development is just the newer practices in that story.

So we’ve got this product management leading, looking at the market, looking at the futures, looking at what customers are going to need in the future, what our stakeholders are going to need in the future, and trying to anticipate those needs by running lots of little experiments. Some of those experiments will be implemented by product development, so we can then get the results. Ultimately, delivering usable, working product enables us to maximise that value return because we’re closing those feedback loops.

So we’ve got product management leading with strategy and direction and vision. Value and validation is product management’s focus. In order to get that value and validation, we need to actually build something. We need to actually create something that we can then put in front of our users, our stakeholders, to then gather feedback and actually see whether it is actually valuable. Are they actually using it the way we expect? Is it actually changing the number the way we would like? And that’s how agile product management leads but is supported by product development. Product development supports that story of collecting that data, that telemetry, that additional information that product management can use to figure out whether we are actually going in the right direction. Do we need to stay the course? Do we need to pivot? Or do we need to stop?

Agile Product Management Strategy Ability to Innovate Agile Project Management Metrics and Learning Product Delivery Strategic Goals Product Strategy Value Delivery Agile Strategy

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