October 11, 2020

Product Owner: Product Value Maximizer

Product Owner is Accountable for Maximizing Value of The Product.

Product Start with an Idea. Image Credit : Nivedita Gulia
Product Start with an Idea. Image Credit : Nivedita Gulia

 

As per Scrum Guide, version November 2017:

The Product Owner is responsible for maximizing the value of the product resulting from work of the Development Team

Product owner is mini CEO for Product and own the product;

Product Owner preferred stances are The Visionary, The Collaborator, The Customer Representative, The Decision Maker, The Experimenter and The Influencer.

By taking these preferred stances the overall objective of Product Owner is to manage the Product and Maximize the Value of the Product.

Scrum Empirical approach help Product Owner to measure if he is heading in the right direction and he is truly maximizing value for the Product.

Product development is a complex venture and in today’s competitive world Product Owner can get off the track if he is not measuring and managing product value continuously using Empirical approach. Specifically, when Value generation is dynamic and value migrate quickly from one state of product to another state.

Product Owner have to work with organization to measure, manage and maximize value Empirically by using EBM framework.

EBM — Evidence Based Management “Framework” allows product owner and organization to empirically, measure, manage and maximize the value delivery for the Product.

EBM Framework:

EBM : Image credit Scrum.org
EBM Framework: Image credit Scrum.org

 

EBM framework define 4 KVA — Key Value Area which helps organization to measure

  1. Current Value: Measures value delivered to customer or user today
  2. Unrealized Value: Measures value that could be realized by meeting all potential needs of the customer or user
  3. Time to Market: Measures the ability to quickly deliver new capability, service, or product
  4. Ability to Innovate: Measures the ability to deliver a new capability that might better serve a customer or user need

Product Value Defined:

  • Does the value be in having a huge product with tons of features?
  • Does saying Product address thousands of requirements of user make a Product Valuable?
  • Does saying a product is Secure, Scalable, Fast and Easy to Use specify high Product Value?
  • Does a Product with less defects, less cost and having lot of feature make it high Value Product?

In my opinion all of above are contextual.

Product Value Perspective:

  1. Investor perspective: There is only one reason any company (Except NGOs — where objective is social benefits to Society) create product or service is Revenue (ROI- Return on Investment).
  2. Customer Perspective: Customer use product and services to carry out the Job(s) he is trying to achieve.

Any product would be Valuable to Investor (Organization) only if product is having high ROI in given window of opportunity.

And;

Company would able to get ROI only if Product is Valuable to Customer and Customer is ready to pay for product.

So overall:

Product Value can be defined only in the context of the Customer i.e.

A product would be valuable to customer if the product:

  • Help Customer to perform Jobs they are trying to achieve; work or tasks customer are trying to get done i.e. To achieve the Primary Job customer, want to perform as well as achieve other jobs user want to perform along with Primary job
  • Help the Customer to achieve Outcomes they want by using product i.e. To achieve the job in the way efficient to the customer (based on user defined matrix)
  • Help Customer to address the Constraints that may prevent customer from adopting or using the product i.e. To achieve the jobs customer was not able to perform due the product’s specific constraints

IMO, Product is valuable only if product is helping customer:

  • To perform existing jobs better, new jobs, or more jobs;
  • TO achieve Outcome in customer prospect of getting a specific job done to satisfaction based on the customer matrix of satisfaction;
  • And by removing constraints that prevent customer from doing a job.

Product would be Valuable If a product address above questions and answer is “Yes”.

Evidence Based Management allow company to manage, measure and maximize value of the product using empirical approach.

EBM address aspects of maximizing Value by measuring

  1. Current Value (CV): What value product is delivering to customer as of today. Objective is to identify how satisfied Customer, Employees and Investors are.
  • Is customer satisfied with product and if the customer satisfaction is increasing? If customer is happy, they would pay for the product as well as they will recommend product to other customer.

    Organization need to measure customer underserved and overserved Jobs, Outcome and Constraints.
  • Is Employee satisfied with the product and if the Employee satisfaction is increasing? Happy Employee will be more engaged and more productive. Happy Employees make the product more valuable by delivering better quality product and reducing the waste.

    Organization need to measure what are Employee’s pain points. Organization should provide Vision and Empower Employee to self-organize to take their own decisions to achieve Vision in given boundaries.
  • Is Investor satisfied with product and if the Investor satisfaction is increasing? If Investor is happy, they will have more confidence in Team and fund the team for more breakthrough product innovation.

    Organization need to measure what are the underserved and overserved needs of customer to invest wisely to get future ROI.
  • Organization need to continuously measure how they can keep current value high for the longer period to keep the product to mainstream customer.

2. Unrealized Value (UV): The Objective is to identify if organization can maximize value over time if there are high unrealized value in current market or in new market. Organization need to continuously measure unrealized value as Product Value migrate continuously. Organization may get off the track and strong competitor may take advantage If organization is not measuring unrealized value continuously

  • Organization need to measure opportunities: Jobs, Outcome and Constraints where customer are underserved and overserved.
  • Once organization identify, where customer are underserved, they need to target to improve product’s features to carry out existing Jobs more efficiently to achieve better Outcomes and remove Constraints to enable customer to carry out jobs better or more jobs.
  • Organization need to identify new opportunities in current market or need to look out for opportunities in new market.
  • As Value continuously migrate, Organization need to continuously measure how they can keep product current value high for the longer period possible by delivering new features or improving existing features so customer continuously use the product and be interested in new features.
  • Organization should look out for new opportunities in case current value is high and if current value is decreasing; unrealized value is low and customer are overserved in the market.

3. Time-to-Market (T2M): Objective is to measure organization business agility i.e. how quickly organization is able to respond to new opportunities and threat based on Time to Learn(T2L) by frequent and valuable delivery outcome.

  • Organization need to learn from the frequent and often delivery of new or improved features to satisfy underserved Jobs, Outcome and Constrains for customer.
  • Organization need to adapt to new information from market to respond to new opportunity or threat in given window of opportunity.
  • Organization need to deliver new feature or new product to satisfy customer underserved Jobs, Outcome and Constraints in current market or new market before a competitor take advantage.
  • Organization need to identify and remove the waste created by internal process, impediments which create bottleneck to reduce time to market.
  • Organization need to achieve high business agility by keeping Time to Market as close as possible to the Lead Time (time from ideation to deliver to customer)
  • Organization need to continuously measure Stabilization Time, Cycle time and Lead Time. Organization need to reduce Stabilization time, Cycle time and Lead time to improve Time to Market.

4. Ability to Innovate (A2I): Objective is to measure organization ability for “Outcome” based Innovation. Organization need to continuously identify opportunities for Product or services Innovation, New Market Innovation, Operation Innovation and Disruptive Innovation to satisfy Customer underserved or overserved Jobs, Outcome and Constrains.

  • Organization need to measure which customer outcomes are underserved and then provide the creative features in their next release(s) to perform a better job(s) to address those Outcomes.
  • Organization need to measure underserved Jobs i.e. Job(s) customer are not able to do today because there is no product available to perform customer job(s). Organization need to take advantage of being first in the market by developing the required product and delivering early to customer.
  • Organization need to measure operational bottleneck and waste which create delay for organization to deliver new features to customer. Organization need to do everything to reduce cost and speed delivery of new features by addressing all internal operational and process waste.
  • Organization need to measure customer overserved Jobs and Outcomes; Organization objective should be to look out opportunities for “Disruptive Innovation” by using new technology which help customer to achieve more Jobs done in less cost.
  • Organization need to create Agile Environment to provide Focus to team by avoiding context switching to work on number of active products at same time. Organization objective should be delivering the next high value features to customer as early as possible by removing all operational waste.

Evidence Based Management provide the Empirical approach to Product Owner and Organization to Measure, Manage and Maximize the Value of the product in current Market as well as in New Market. Organization should continuously look out for Underserved and Overserved Customer Job(s), Outcomes and Constraints and adapt to new learning to Maximize Product Value.

If you are interested in learning more about Evidence Based Management, you can download EBM guide from Scrum org EBM Guide .

You may reach to me, In case you want to learn more about Professional Product Owner and how to be Pragmatic Product Owner to maximize the value of the product.