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How to Measure Product Owner Performance

February 25, 2021

By Simpliaxis

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In Scrum, the Product Owners’ primary obligation is to “maximize the value of the Product, create, deliver and maintain a successful Product.” The person is also responsible for managing the Product Backlog, which is listing things that a Scrum Team works on. The Product Owner has to be the customer’s representative and clearly define and communicate the Product Goal. They should also create and explain the items in the Product Backlog. The prioritization of the Product Backlog items, like defects or bugs, is also part of their purview. With so many functions involved, the question of how to measure a Product Owner’s performance is quite tricky. This article attempts to define a guideline of practices that can help decode a well-balanced Product Owner performance.  

Before we can get to that, however, we need to understand what an organization should be doing, right from the beginning, to allow a Product Owner to perform their duties. 
 

Organization’s role:
 

First, an organization needs to have one Product Owner per team with the necessary skill and understanding of what the job entails. Before taking them on, one needs to check whether the person has the required domain and corporate experience. The organization should not overuse the person but allow Product Owners to invest sufficient time for the inward and outward elements of their role. They should also have the freedom to make business decisions and guide the Scrum Team.

Next, to depict Agile requirements, the organization should be building compelling User Stories. The Product Owner should be the guardian of these stories. The Product Backlog, an ordered list of everything needed for the product, should be available to direct the Scrum Team’s output. The Product Owner should be given the role of the head guide.
 

Understanding Value:
 

Product Owners need to have a thorough understanding of the value drivers for their products. They also need expertise in the area of Agile methods to escalate that value using Scrum. But “value” cannot mean monetary gains alone. 

Value can have different meanings depending on the context. For example, let’s consider marketing. Here the word “value” means gaining esteem in the market and increasing popularity and mentions online. The Product Owner needs to understand the product’s value first before he or she can be a success.

This is not to say that being a useful Product leader is uncomplicated after that it’s a complex role that requires accepting people’s suggestions and refusing them when needed. The position requires being generous and also being forceful when needed.
 

Factors that contribute to a Product Owner’s performance:
 

1. Realizing what the accountability is not
 

A Product Owner’s job is not to manage resources and tasks. That is what an Agile Project Manager does – being responsible for managing the project’s extent, the exceptions, and reports. Additionally, the Sprint team is empowered to address the needs of day-to-day activities and Sprint’s progress. The Product owner does not need to get into that. Therefore, the Product Owner’s role is to maximize the product’s value by creating features that deliver the most benefit for the product’s users.
 

2. Realizing the difference between Project and Product success
 

A project is a collaborative enterprise that has a precise end date. It is planned to achieve a particular goal. There is a specific scope, a period, and an allocated budget attached to a project. Moreover, a project is considered successful when the agreed product is delivered within the allocated time and budget. However, a product continues to be successful as long as it is used and deemed worthy. Hence, as long as a product is available in the market, product development and the Product Owner’s role does not end.
 

3. Involving the Scrum Team and stakeholders in value estimation
 

A Product Owner that understands that many perspectives and experience can help in better value estimation is a high-performing Scrum member. Although the estimate of Product Backlog Items’ value falls to the Product Owner, it is best done in collaboration with the stakeholders, customers, and Developers. They will pay equal attention to the team for lower-level estimations (like stories that can be done in Sprints) and other stakeholders for high-level forecasts (say, information from market requirements).

It is equally essential for the Product Owner to realize that there should be no involvement in Effort Estimations. It is entirely the role of the Development Team. A mature Product Owner will not try to persuade the team to develop a Product Backlog item in less time than they estimated. Instead, if there is a time constraint, the Product Owner can pick a smaller Sprint Goal.
 

4. Guiding value
 

A successful Product Owner realizes that there is no point in concentrating on effort and story points without bringing business value. Value can be measured with a variety of methods. An Agile Key Value Indicator for the product can be used for this. Examples of KVI are Daily Active Minutes (The number of minutes the product is used every day) and Daily Active Users (The number of users that return to your app regularly and every day) 

While it’s essential to make these measurements, the Product Owner’s performance can only be evaluated based on how they direct the process afterward.
 

5. Calculating internal and external value.
 

Internal value is the value that the product brings to the organization. It could include optimizing work hours for employees, cost savings, revenue, employee satisfaction, etc. On the other hand, external value is a value that is delivered to customers and other stakeholders. These could be calculated by looking at customer satisfaction, customer loyalty, etc. A high performing Product Owner will look at both these values to steer the process
 

6. Setting goals
 

In conventional organizations, goals are set by the senior management. But in Agile practices, this is done by the Product Owner. A Product Owner who realizes that setting goals is a large factor for success will also aim to persuade the team to share in a vision. Creating a fully transparent goal that inspires the team; then following it up by measuring goal achievement when the Sprint ends is something that a useful Product Owner does as part of his or her responsibility.
 

7.Releasing Early, Releasing Often
 

A successful Product Owner realizes that there is no point in working on a product continuously until a customer finds it perfect since that rarely comes true. Finding out if the customer and stakeholders see value in the product is possible only with releases and feedback. A good measure of a Product Owner’s performance is whether products are released early and often for customers and stakeholders.
 

8. Realizing that “value” is not constant
 

The definition of a product’s value changes with time. For example, in the initial versions of a new app being released, the number of people who know about it and download a free version is an indicator of the value of the product. When the product continues to be used by people, the value may be calculated in terms of the number of people willing to get the app’s paid version. Later, the same app may need to be valued concerning customer satisfaction. A successful Product Owner can change the definition of value based on the situation. 
 

9. Making adjustments
 

The Product Owner’s role is a dynamic one, and he or she has to be able to quickly comprehend the changing market conditions and what the customer requires. Decisions may include breaking down elements and minimizing the scope of a Sprint, just for experimentation. He or she will use different fact-finding and hypothesizing tools to increase value and make adjustments by studying pre-release goals and post-release actuals and including Sprint Retrospectives feedback. The successful Product Owner ties the results of one Sprint to the release plan of the next Sprint.
 

10. Actively Communicating: 
 

As is clear from the factors described above, a Product Owner must work with the team and work with internal and external stakeholders. Communicating without being too pushy and stifling creativity is a big challenge for the Product Owner. They are also needed to be the conduit for the team to connect with senior management or stakeholders. The Product Owner does not need to be an expert on all aspects of the process but should connect the right people where required. For example, Developers needing clarification about the code they are using may have to speak to the users. Stakeholders who need insight into customer trends would have to be directed to the Business Analyst. From development, testing, marketing, and strategic perspectives, what is happening within the process is always known to a committed Product Owner.

In conclusion, it is not an exaggeration to say that a product’s success is closely linked to the Scrum Product Owner’s performance.

 

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