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Last updated on 9/10/20

Learn why the product manager is referred to as the CEO of the product

The product manager is often described as the CEO of the product. This is a really good metaphor in some ways, but it is not completely accurate. Let's examine why.

Product manager as CEO: a good metaphor

There are many things that a product manager and a CEO will have in common.  A good CEO will:

  • Set the vision for the company

  • Take ultimate responsibility for the success or failure of the business

  • Gather information from many sources before making any decision

  • Monitor and  drive improvements into KPIs

  • Build meaningful relationships

  • Communicate effectively

  • Understand and empathize deeply with the problems of the customer

  • Lead by example

These are also characteristics of a good product manager!

The product manager will drive the vision of the individual product and will be responsible for the success or failure of the product. The product manager will be excellent at communicating, leading by example, and building and maintaining relationships. The product manager communicates effectively with each department of the organization The product manager gathers information from many different sources (internal and external) including customers, competitors, industry trends and uses this information for decision-making.

Product manager as CEO: a bad metaphor

There is one key difference that makes this metaphor fundamentally inaccurate. The product manager does not have direct authority over many of the aspects that are needed for product success, including resources, development, marketing, and sales.

The CEO can hire and fire as they see fit. They can also give direct commands to the sales, marketing, support, finance, and admin departments. They can set incentives to reward excellent performance and also punish bad performance. It is a role with ultimate authority.

The CEO has direct authority
The CEO has direct authority

The product manager does not have this level of direct control. The product manager typically does not manage a budget, nor can they give direct orders to anybody else in the organization (unless other product managers report to them).

Instead, the product manager must use her persuasion skills to influence the other people in the organization to go in the desired direction they want.

It is better to think of the product manager as someone who has exceptional persuasion, communication, and influencing skills. They create compelling arguments and have a vision that other people in the organization are drawn to.

It might seem unfair that product managers have such great responsibility yet such little direct authority. However, good product managers actually thrive in this reality! They know that they can achieve better results with indirect authority (persuasion, influence, story-telling) than they can with direct authority ("do something because I say so").

Product managers are influential and powerful because they can communicate a compelling case based on the data, the reality, and the research. They have intimate knowledge of the customer, the problem and the current product.

The product manager persuades through use of data and research
The product manager persuades through use of data and research

As the tech team (developers, designers, testers) will only work on the vision and the features once persuaded that it makes sense, this acts as a nice "organizational balance" that helps product teams to succeed. The company benefits from having a "check" that the team (rather than one individual) agree on the proposed vision before detailed implementation.

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Example of certificate of achievement
Example of certificate of achievement