24 Jul 2023
Product management is a multifaceted discipline with various roles and responsibilities. In some respects, no two roles are alike. That said, you can create some demarcation based on the customers that a product manager serves - either internal customers or external customers.
Understanding the differences between these roles is crucial for product managers (PMs) to make informed decisions about their careers. This article will delve into the definitions of internal and external product management, highlight their similarities and differences, discuss the pros and cons of each role, identify essential skills for success, and provide tips for evaluating career goals and ambitions.
These distinctions start to come into play as an organization grows.
In the beginning, a company can focus on one, or a few products. A product manager can take on one or a few of these products to help alignment. As teams expand, there becomes more and more complexity in the product portfolio. What could be done in a few days with a small team suddenly finds itself with growing complexity.
Once a tech organization grows to a certain level of complexity, internal and external product managers make executing strategy easier.
Internal product manager: They work within an organization, focusing on developing and managing products or services for internal users. Internal product managers work in places like architecture and “core” services that affect the entire organization. They also help internal tooling for teams like design systems, that make the working environment easier.
External product manager: They work with customers to develop products or services tailored to solve their problems. This is the typical product manager, except at this level of complexity, they get to focus on a particular feature and the customer profile directly with less worry around infrastructure or core capabilities.
While there are similarities between the roles, thinking about the customer you are trying to serve, internally or externally is a clear way to describe how each group engages with the organization as a whole.
Both internal and external product managers share core responsibilities. These six responsibilities are generally going to shape the role, regardless of what your focus is. Ambiguity management, product strategy development, cross team collaboration, market research, stakeholder collaboration, and product lifecycle management are the responsibility of the product manager.
Ambiguity management: Helping the teams they work with make better decisions consistently.Using a tool like airfocus to help create a clear source of truth is helpful for making the right decisions over and over again.
Product strategy development: Defining product vision, goals, and roadmaps to align with organizational objectives.
Cross team colaboaration: Collboarating closely with cross-functional teams, including engineering, design, and marketing.
Market research: Conducting market analysis, gathering customer insights, and identifying market trends to inform product decisions.
Stakeholder collaboration: Engaging with those whose business objectives and interests require engagement with technology teams.
Product lifecycle management: Overseeing the product lifecycle from ideation to launch and beyond, including gathering feedback, iterating, and sunsetting products when necessary.
While internal and external product management share similarities, there are notable differences that set them apart. When an internal product manager and an external product manager compare their calendars, they will see differences in how they work with their customers, how they think about risk, and what success metrics look like to their stakeholders.
Here are a few of the differences:
Client relationship management: External product managers emphasize building and maintaining strong relationships with clients or customers, understanding their needs, and aligning products accordingly. Internal product managers foster relationships with internal stakeholders, such as sales, developers, and designers.
Risk management: External product managers emphasize the risks that exist for the brand. Internal product managers focus on risks that exist in architecture and cost.
Success: External product managers can leverage metrics such as revenue as a way to define success to the organization, while internal product managers think about cost reduction.
What are the pros and cons of the each role?
When you think about internal product management, there is safety in going a mile deep in an organization. You’ll learn a lot about how the organization works, and you’ll be a master of tooling. You’ll find yourself with a bit longer of a schedule due to architecture being 24/7.
Greater job security and stability within an established organization.
Opportunities for vertical growth and advancement within the company.
Deeper involvement in the company's long-term vision and strategy.
Limited exposure to external markets and customer perspectives.
More bureaucratic processes and organizational complexities.
Work-life balance may be compromised due to demanding schedules.
External product managers get a lot of exposure to customers and markets, and they get visibility as they work on things that people outside of the organization care about. While they have a lot visibility, that can also become a burden as they get a lot of demands from different types of customers.
Extensive exposure to various industries, markets, and client perspectives.
Opportunities for networking and building a broad professional network.
Flexibility and independence in managing customer relationships.
Increased pressure to meet client expectations and deliver on commitments.
Limited control over internal processes and decisions.
Challenging to balance multiple customers demands and priorities.
Both roles need similar skills to excel at the role. When it comes to product management, the ability to work with product strategy and roadmapping, communicate, research the market, lead both directly and indirectly, problem solve, and are adaptable are critical when it comes to doing the job well.
Product strategy and roadmapping: The ability to develop a clear vision and strategic product roadmap. Using a tool like airfocus to help create a clear source of truth is helpful for making the right decisions consistently.
Communication and collaboration: Strong interpersonal skills to engage with stakeholders and facilitate effective teamwork. A clear roadmap driven by airfocus can create an artifact that build trust.
Market research and analysis: Proficiency in gathering and analyzing market data to inform product decisions.
Leadership and influence: Capability to lead and motivate cross-functional teams to achieve product goals.
Problem solving and decision making: Aptitude to identify challenges, analyze options, and make informed decisions.
Adaptability and resilience: Willingness to navigate changing environments and handle unexpected situations.
As a product manager, it’s important to have your own career in mind. Without thinking about these things, you’ll find yourself in the wrong space, and could harm your career prospects. These are five things to help you make the decision as to which path is right for you.
Self-reflection: Assess your strengths, interests, and career goals. Consider whether you prefer internal collaboration or external client interaction.
Networking and informational interviews: Connect with professionals in both roles to gain insights into their experiences, challenges, and rewards.
Job shadowing: Explore opportunities to shadow or intern in both internal and external product management roles to gain firsthand experience.
Seek mentorship: Engage with experienced product managers who can guide you in evaluating your career options and offer valuable advice.
Continuous learning: Invest in professional development and education to enhance skills relevant to both roles.
Understanding the nuances between internal and external product management is crucial for product managers aspiring to make informed career decisions. While both roles share key responsibilities, they differ in terms of client relationships and team leadership. By considering the pros and cons, evaluating personal skills and aspirations, and seeking insights from industry professionals, PMs can make a well-informed choice to pursue a fulfilling career path in product management.
Regardless of your choice, airfocus can help you understand what your source of truth is, and through that, you’ll be able to manage strategy, understand user needs, prioritize, and align your teams around clear roadmaps.
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