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The Product Owner's Responsibility - Creating Business Value or Creating Something Else?

Main Takeaways
Reading Time: 3 minutes Is Business Value only determined by maximising features delivered fitting the right time to ship the product to market? — Or do other aspects add relevant benefits?


Business Value By Features Only?

Recently I discussed with Your Agile Coach (a member) the responsibility of the Product Owner to achieve, resp. increasing Business Value. In his post "Minimum Marketable Product: Revolutionizing the Way You Develop and Launch Products", the Coach raised good points I can't simply disagree with. According to the Coach, Business Value is determined by maximising features delivered fitting the right time to ship the product to market.

Of course, the time a product enters the market is central. I totally agree with the Coach's point of being right at market time. The world’s first smartphone was IBM’s Simon released in 1994. It was the first device to feature apps and a touchscreen. But, it was too early in the market. When it appears public in the 90s, no one realised its potential at this time. But, when Steve Jobs introduced the iPhone in 2007 it was a big bang. Today, smartphones disrupted the market of telephones, cameras, camcorders, and music players like iPods. Steve Jobs found the right market and the right time to market.

It was not the argument of the right time to market raising my attention. It was another point in the Coach's arguments.

"A product owner takes the responsibility of maximizing the business value for delivered features [...]"

For sure, in his post the Coach raised a crucial question: of course, the Product Owner is responsible for her organisation to increase the Business Value of their products. But does the value depend on the number of delivered features only, or do other aspects create value, the Product Owner has to strive for additionally?

Let me show my arguments.

  1. Achieving Business Value by Features delivered is easy: you make revenue (RV) by leveraging your production costs to the break-even. Getting the market/customers to pay at least for your production costs (PC) plus a certain surcharge (SC). The surcharge is to compensate for other expenses like administrative and governance issues or only to leverage your income. Getting this math: RV=PC+SH to the break-even, you are on the lucky side. Thus, if the surcharge SC is always limited to a certain amount, only the number of Features drives your revenue. — Well done! — Well done? — Really?
  2. Since Harvard Professor Clayton Christensen coined Jobs to Be Done in his Milkshake Marketing Experiment (Nobel 2011) this notion is today common to customer experience. For the customer, the product value is not only determined by the number of features she gets. From the customer's perspective, much more important is, that the products do certain jobs to solve customers' problems: getting enough food to stay for the next break; drilling a hole in the wall to fix a picture.
  3. Take into account that Business Value is not restricted to PC+x only. But instead, with what the customer/market is willing to pay for, we can achieve revenues much more. Say, 100% up to x000% regarding (1).
    The magic wand is: don't consider Business Value only as production costs + x. Instead, the customer pays for the product what it is worth for her! She takes into account the worth of the problem solved and potentially achieving a better social status  (Job to Done).
  4. Take (3). It is a totally different marge than (1). It combines the product's purpose (assumed by the manufacturer), with its recognition and its appreciation by the customer/user.

Customers don't buy products because of their features. Customers buy and pay for how well their problems are solved or they achieve social status through the product (Job to be Done theory). Often customers are confused by the number of features. Surveys show that only 20-30% of features delivered are used by the customers. Thus, less is better. Or, let's phrase it differently: the Product Owner's responsibility is not to maximise the features delivered. This counts only

Therefore — at least for me — the responsibility of a Product Owner is much more than creating Business Value by Features only.


Further Reading

  1. Nobel, Carmen (2011): Clay Christensen’s Milkshake Marketing. Harvard Business School. Feb 11, 2011.
  2. Ulwick, Anthony W.: Jobs to be Done: Theory to Practice.

: Laura Tancredi via, .