Product Owner Responsibility

Optimizing the value of the work the Development Team performs

I believe what this santance means is that product owner has to prioritize the backlog in the way that brings most value to the stakeholders. He does this with constant feedback and communication. When backlog items are prioritized and top level priority items details enough for grooming, team provides even more details, backlog items split and estimates.

Hopefully this helps you out.

I see it a little bit different.  I coach my POs to order the backlog based on the items that deliver the most value to the user/company based on what we know right now.  It is a subtle difference that needs some explanation.

Consider that there is a set of stories that provide significant value to the company's annual goals.  But in the same backlog there are a set of stories that will provide value to the immediate work being done.  While both are have high priority how do you determine which one is higher?  It might be more prudent to provide the short term value while still being able to work on the long term.  If the stories are properly refined, it is quite possible to intermix the long term and short term stories in the backlog ordered based on the relative values between them and how that value is most important at the time you are doing refinement or planning. 

Also, remember that Scrum Guide was changed to use order instead of prioritize because priority is not always the best way to work.  It is intentionally vague on what order means because it will vary from company to company, team to team, time to time. You have to trust the PO to make the right decisions based on their knowledge and input from the stakeholders and dev team. 

In addition to what was said, the PO optimizes the work of the Dev Team by making sure the PO engages with the stakeholders throughout the process. If the PO brushes off the stakeholders or doesn't actively work to include them, the likelihood that the team is building what the stakeholders actually want is SUPER slim. 

 I coach my POs to order the backlog based on the items that deliver the most value to the user/company based on what we know right now

Daniel, yes, in my response i assume that stakeholders knows already what brings the biggest value. If development is internal then yes for company long term value.