The Product Owner role in Agile is not well understood and it can be confusing to understand how it relates to a typical project management role in a traditional, plan-driven environment. In my opinion, the Agile Product Owner role is actually a hybrid of some elements of a Product Manager role and some elements of a Project Manager role.
Why Is a Different Role Needed in Agile?
In a traditional, plan-driven environment, there have been many projects that may have met their cost and schedule goals but failed to deliver a sufficient level of business value. Agile puts a much higher priority on delivering real business value and not simply meeting cost and schedule goals. An Agile project would not be deemed to be successful if it did not provide a sufficient level of business value.
Scrum has recognized the importance of the need for business direction and has created the Product Owner role to put more emphasis on providing that kind of discipline and business direction. The Product Owner in an Agile project actually takes on a number of functions that might normally be performed by both a “Project Manager” and a “Product Manager” in a traditional. plan-driven development project. It has some of the responsibilities of both of those roles. We’ll discuss each of those roles individually and then discuss how they are combined and integrated into the Product Owner role.
What Is the Relationship to Project Management?
How does the Agile Product Owner role relate to project management? I’ve written a lot about “project management” and Agile projects. Many people mistakenly assume that “project management” is not needed in an Agile project because there is typically no Project Manager at a team level in an Agile environment. However, even though you may not see anyone with the title of “Project Manager”, the project management discipline is still needed:
- It’s a different style of project management with an emphasis on maximizing business value rather than planning and control, and
- The project management functions are distributed among the Agile/Scrum roles rather than being performed by a dedicated person called a Project Manager
I think of this as “Distributed Project Management”. Here’s an article with more detail on that:
The Product Owner comes closest to the overall responsibilities of a project manager. He is expected to perform many of the functions that might normally be performed by a Project Manager including:
- Prioritizing the work to be done,
- Approving completed work, and
- Making decisions that might impact project risks, schedules, and costs
He/she is actually the one person who is totally responsible for the overall success or failure of the project. However, the Product Owner role actually goes beyond a project management role. He/she is expected to:
- Take overall responsibility for the success or failure of the project from an overall business perspective. The role is not limited to simply meeting cost and schedule goals
- Make any decisions or trade-offs that might be needed to meet the project goals. In that respect, the Product Owner has much more decision-making authority than a project manager might normally have
What Is the Relationship to Product Management?
How does the Product Owner role relate to Product Management? Wikipedia.com defines “Product Management” as follows:
“The role may consist of product development and product marketing, which are different (yet complementary) efforts, with the objective of maximizing sales revenues, market share, and profit margins. The product manager is often responsible for analyzing market conditions and defining features or functions of a product. The role of product management spans many activities from strategic to tactical and varies based on the organizational structure of the company. Product management can be a function separate on its own, or a member of marketing or engineering.”
“While involved with the entire product lifecycle, the product management’s main focus is on driving new product development. According to the Product Development and Management Association (PDMA), superior and differentiated new products — ones that deliver unique benefits and superior value to the customer — are the number one driver of success and product profitability.”Wikipedia.com
General Product Management Responsibilities
You typically find real “product management” only in companies that market products for external sale to customers such as Intuit Quicken or QuickBooks. In simple terms, a Product Manager is responsible for the complete success or failure of a product throughout the entire product life cycle which might normally include:
- The business planning and definition of the product from a business strategy perspective to ensure that the product fills an important customer need and will be successful against any competitors in that market
- The development of the product including prioritizing features and capabilities, approving development schedules, release plans, and results
- Managing any risks associated with the product development effort and making risk management decisions
- The marketing and sales launch of the product to the consumer base if the product is sold to consumers. That might normally also include any services that are associated with the product as well as the ramp-up of sales and support capabilities
You can view a more complete description of the responsibilities of a Product Manager on the productmanagement.com website. The Product Owner role is generally a subset of those Product Manager capabilities. He/she may not have the full responsibilities of a Product Manager. There are two different environments where the Product Owner role might be implemented and each can be different:
- Product-oriented companies that are in the business of developing products for sale to external customers, and
- Project-oriented companies whose primary focus is on internal applications development
This category would include companies that are in the business of developing products for external customers or where the software application is a critical part of a product or service that is sold to customers (examples would include Amazon.com, Facebook and Google). In these companies, the software application has a very direct connection to producing revenue and the product management function is very significant and very important. In that environment, you may find both a Product Manager and a Product Owner role associated with large development projects. If that is the case, the Product Manager might be responsible for the broad and strategic business-oriented product management functions while the Product Owner is more tactical and focused on the development project.
Internal IT Application Development Role
An internal IT applications development project typically has a more indirect connection with producing revenue for the company. It may have a goal of improving productivity or operational efficiency. In that environment, you will not typically see someone called a “Product Manager” because:
- The output of that kind of project might not be considered a real “product”, and
- It typically is not be sold to external customers
However, many of those applications are significant enough to be treated like a real “product” and, although it may not justify a dedicated person with the title of “Product Manager”, it has some of the attributes of a Product Manager:
- Some basic product management discipline is needed
- Although the “product” is an internal IT solution and may not be a real product sold to external consumers, it still may have to satisfy some important internal business users
- In a company that develops IT applications for internal use, this same general discipline is needed but it is focused on maximizing the business value that the application provides for the company rather than maximizing the revenue from external sales of the product.
In an internal IT project that is not associated with selling a product to external customers, this role would normally be filled by a Product Owner in an Agile environment. Sometimes a Business Analyst might take on some of those functions in support of the Product Owner; however, a Business Analyst does not typically have the level of responsibility and decision-making authority and accountability of a true Product Manager or a Product Owner. The role of a Business Analyst in an Agile environment is typically limited. Here’s an article with more detail on that:
The primary difference between a Business Analyst and a Product Owner is the level of decision-making authority and accountability. A Product Owner has responsibility for the success or failure of the project, has decision-making authority to make that happen, and is help accountable for the results. A Business Analyst does not have that level of responsibility and is many times an intermediary between the business users and the development team.
The Product Owner role actually has a a huge amount of responsibility that is not fully understood in many cases and many of the people who are assigned to perform this role are not well-trained to do it. What typically happens is that a business management person who has the domain knowledge and subject matter expertise but has neither product management or project management experience is appointed to take on the responsibilities of the Product Owner.
When I took a Certified Scrum Product Owner (CSPO) course years ago, it primarily focused on the mechanics of how the Scrum process works and what the general Product Owner role is in that process. It was taken for granted that the students knew enough about both project management and product management to perform those functions in the context of an Agile/Scrum project. That is often a faulty assumption.
Many companies have difficulty filling this role with qualified people because:
- The people from the business side may have the domain knowledge and subject matter expertise but do not have either project management or product management experience
- A Business Analyst does not normally have the decision-making authority or level of accountability to take on this responsibility
Check out the following related articles on “Agile Business Management”:
- New Agile Training for Business Managers
- What Is the Relationship of Design Thinking and Agile?
- What Are the Critical Skills of a Scrum Product Owner in Agile?
- How Do You Choose the Right Agile Approach for Your Business?
- What’s Different About Agile Metrics?
- What is Systems Thinking and Why is it Important?
- Agile Contracts – How Do They Work?
- Agile Business Strategy – Making Agile Work for Your Business
- What is an Agile PMO? Is it Possible? How Would it Work?
- Are Corporate Culture and Values Really Important?
Resources for Agile Project Management Online Training.