In Scrum, the Product Owner is an entrepreneur and the mini-CEO of a product, who is able to make fast decisions. The success of the Scrum Team and company as a whole depends on whether the Product Owner is real.
The real Product Owner in Scrum:
Defines the Vision of the Product.
Crafts a product strategy.
Creates a business model.
Optimizes business value (ROI).
Communicates with stakeholders and acts on behalf of them.
Manages a budget and is responsible for business outcomes.
Thinks like an entrepreneur.
In order for a Product Owner to successfully perform his functions, he needs power.
Why It Is Not Easy to Give Power to a Product Owner
From my experience, companies are afraid to give too much power to the Product Owner, often explaining it by the fact that he/she can make a wrong decision. Indeed, Scrum does not guarantee that the Product Owner makes correct and measured decisions. Product Owners are people, and it means that they can make mistakes. The famous Steve Jobs messed up with lots of products during his life.
There will always be mistakes regardless of the company's management model. A study by Ron Kohavi of Stanford University shows that only one-third of all business decisions lead to positive results, a third of all solutions lead to nowhere, and another third cause negative consequences.
Scrum allows a Product Owner to quickly see that the product is moving in the wrong direction and to adjust the course without wasting time on bureaucratic delays within the company.
To Give Power to a Product Owner Means Becoming More Agile
To be agile means to be flexible, to be able to quickly change direction of product development and to adapt to the market. Agility gives companies a competitive advantage. To achieve it, Scrum offers a new organizational structure, where the key role is given to the Product Owners:
New organizational design for achieving agility.
Scrum is a model of a radical decentralization of an organization.
On the periphery of the company, the independent product groups are created made of the Scrum Teams or their clusters (Nexuses). Each team/cluster is responsible for its own product or service and is in direct contact with the market. The Product Owners lead the the Scrum Teams and have the broadest authority.
If the Product Owner receives negative feedback from users, he/she quickly changes the product, without waiting for a sign-off from the top management. The speed of decision making within the Scrum model increases and, as a result, organizational agility improves. Adapting to market demands allows Scrum teams to create successful products.
Give the Product Owners the power and the opportunity to make mistakes so that the company can become truly agile.
Mistakes will give valuable experience that will help make the product better, and Product Owners with authority will be able to quickly correct these mistakes.
Do you have real Product Owners in your company?