The title, picking up Ben Horowitz’ idea in “Good product manager/Bad product manager”, may seem provoking to some of you in the context of Scrum teams and cause some resistance like “No! Not at all”, “Who do you think you are?”, “What authority do you think you have?”, “Have you ever had to communicate lay-offs due to a failed or changed strategy?”, etc.
And of course you are right, somehow. As a Product Owner I have bosses inside my organisation, I am not (necessarily) signing contracts on behalf of a company, I have no disciplinary power ultimately allowing me to enforce a decision even against significant opposition and there are many more things a formal CEO can do and has to do that go far beyond the responsibilities of a product owner. And as a CEO you are likely to be _the last line of defense_. There’s hardly anyone behind you acting as another control instance in terms of strategy and implementation of the same. That’s different for a Scrum product owner, of course.
Still I defend this title. I defend it by emphasising the entrepreneurial mindset that a good CEO and a good product owner should have in common. It’s the responsibility for resources and, to some extent, even for the reputation of the company. Given you are the product owner of a client facing product, when you take decisions on what to prioritise for the next sprint(s), then you directly impact how the clients perceive your company.
Whether you consciously sense the market reaction to your previous product increments and respond to it in a purposeful way or whether you just follow your initial ideas ignoring the actual feedback the clients are presenting to you, this can have a significant impact on KPIs like customer satisfaction, retention, churn, new customer acquisition, custom lifetime value and, ultimately, on the related financial figures and the health of the company that determines how long you and your company can survive.
According to the Scrum guide, “The Product Owner is accountable for maximising the value of the product resulting from the work of the Scrum Team.” There have been thousands of discussions about how to measure this value. Many of them falling short when focusing on artificial metrics like velocity, be they measured in story points or completed product backlog items. Is there any actual value produced just by a feature being delivered? Or isn’t that actually just one (important) step towards true value creation? Like for a car manufacturer there this no real value unless the car is actually sold (and paid, by the way). Until then it’s just capital tied up on a parking lot that depreciates over time and needs to be written off and finally disposed if it does not get sold.
So when the job of the product owner is to maximise the value of the product then this is much more than shipping features. It’s about shipping the right features (strategy effectiveness), those that actually sell. Sell to existing clients and make them stay and sell to new clients increasing the client base.
It’s also about building the features the right way (production efficiency) to shorten time to market, reduce production costs, allow to offer at lower prices or increase the product margin.
Both of those levers, effectiveness and efficiency, are directly linked to desired outcomes expressed in customer related KPIs as mentioned above and equally impact mission critical business outcomes like profit and market share, just to name two of them.
There are a whole lot of things that a product owner needs to consider if he wants to be successful in maximising the value of the product resulting from the work of the Scrum Team:
Financial considerations: how do I make the most out of the money (development capacity) I have got?
Product strategy & research: how do I discover what investments are most likely to actually pay back, thus making sure we are leaning our ladder at the right wall before we climb it up?
Operations / Production efficiency: how do I avoid waste in development, thus increase ROI?
HR and leadership topics: how can we become a high performing team with each team member being willing, capable and entitled to contribute to the common goal at the best of their potentials? How do I effectively win, onboard and retain people on my team?
Legal & Compliance: how can I avoid legal risks that, if they occur, could trash huge parts if not all of our developments?
Communication: how do I effectively communicate with the client making sure I actually sense the customers’ feedbacks and leverage it for our continuous learning and product improvement by listening to it and reacting to it in a timely manner?
Those are tactical and strategical questions similar to those that a CEO needs to solve on a company level.
Maybe you still wouldn’t want to call a product owner the CEO of the product. And if so, I don’t mind. To the question in the heading, it wasn’t my goal to make you cry out “Hell Yeah, that’s what we should call them!”.
Much more my goal was to make you aware of the huge scope of aspects that good product owners needs to consider when they truly want to maximise the value of the product they are developing together with the team. There’s way more to consider than just comparing product backlog items and deciding which comes first.
The product owner role, if lived along the Scrum lines, in an entrepreneurial way and not just being the Scrum team assistant of someone else, then this not a junior role. It’s a role that you are assigning a huge responsibility to and that has a tremendous impact on how your company and your product are perceived in the market, by customers and competitors.
Having a good to great product owner on your team can provide you the competitive advantage helping you lead your market.
So If you are to hire a product owner, don’t just ask for a 2-days course’s certificate, assess their entrepreneurial attitude and agile mindset. Then be willing to value them appropriately! You will not regret it.