Agile development has definitely gone mainstream, as businesses beyond the realm of technology continue to customize the approach and even build upon it with new approaches like DevOps. But traditional companies still often find themselves struggling to implement these methodologies.
When I work with clients, I see that there is often one critical point of failure: the product owner. In an agile organization, product owners are the ones responsible for aligning the business, IT, and customer perspectives, and they have extraordinary power to create value. They are the people who understand the customer’s needs, know how to increase revenue, cost-efficiency, and customer satisfaction, and see enough of the big picture to deliver a highly competitive product.
Product owners should be the entrepreneurs in the organization: passionate about their mission, motivated to create measurable value, and supported by a culture of empowerment, transparency, and trust. So how do business and IT leaders identify and cultivate effective product owners? And how do they create an atmosphere that fosters their effectiveness?
Step 1: Identify the Right People
A clear pattern I’ve noticed among companies that have successfully become agile is that they look for product owners who think and behave like entrepreneurs. Consider how entrepreneurs behave in pitch meetings with venture capitalists—they have passion and enthusiasm for their products and immediate answers to the big-picture questions.
Leaders need to think like venture capitalists and identify those who can be trusted to steward a major investment. The ideal candidates will exhibit four critical qualities:
- Collaborative Leadership. Product owners must convey a vision for the product, solicit continuous feedback, negotiate tradeoffs, and drive the process forward.
- Business Sense. Effective product owners stay focused on prioritizing the projects that will deliver tangible and measurable value for users.
- Creativity. The best product owners inspire their teams to tackle challenges, setbacks, and budget constraints with smart workarounds and creative solutions.
- Passion. Product owners need to be passionate about the project and fully dedicated to its success. They should have a bias for action, while also incorporating empirical data and input from key stakeholders.
Importantly, I’ve found that much of the product owner’s success comes from simply managing a sound process: conducting market research, understanding the customer’s needs, identifying where the product will create the most value, prioritizing the most important features, testing ideas, capturing customer feedback, and continuously refining their vision over time.
Step 2: Insist on Accountability
If product owners are going to be treated as entrepreneurs, it’s only natural that they be evaluated on the basis of outcomes. But surprisingly, I’ve noticed that product owners are rarely held accountable for their products’ performance.
Just as entrepreneurs must develop a pitch that persuades investors to give them money, product owners should be required to demonstrate the value of new digital initiatives. Here’s how it should be done:
- Establish a business case. Prior to receiving funding, product owners need to establish metrics that can be used to evaluate a project’s success. Questions the business case should address include: What value can be captured? Which customer segments will be targeted? How can we secure quick wins? How can we reduce risk?
- Track performance. Because this is a new way of working for many companies, product owners need to provide 360-degree transparency into all aspects of a product’s journey from ideation to maturation.
- Use the right metrics. A product owner’s performance should be measured on real-world outcomes, including adoption rate, customer satisfaction, revenue gains, and cost savings.
When product owners are held accountable for value creation, and employees’ incentives are aligned around this point, agile teams are well-positioned to produce tangible results—both for customers and the business.
Step 3: Create a Culture Where Product Owners Thrive
In my work with clients, I’ve seen that even the strongest product owners will struggle in a company that doesn’t accommodate an agile mindset. Traditional businesses need to embrace a new way of working based on speed, experimentation, and adaptation:
- Give product owners a long leash. To be successful, product owners need the authority to make pivotal decisions independently and in the moment. They should be fully empowered to experiment, set priorities, and guide the agile development process on the ground.
- Celebrate fast failures. Failure is a natural byproduct of risk taking and should be celebrated. The trick is for product owners to fail quickly. Fast failures can help product owners shift course and reallocate resources in response to real-world data. Companies that embrace these failures it will be rewarded with higher levels of innovation from their product owners.
As entire industries are disrupted by fast-moving tech startups and innovative business models, I have no doubt that agile methodologies will play a key role in helping traditional companies stay ahead of the competition. For organizations to realize all the benefits of agile, they need to find passionate and entrepreneurial product owners, and they also need to empower them to effectively drive this new way of working.