In this episode of my blog series on “Anti-patterns that Doom a Product Owner to Fail,” I cover a few problems Product Owners may run into when it comes to money. Money is an exceptionally touchy topic, in my opinion, so tread carefully.
No Control of the “Purse-Strings”
Problem
The Product Owner should be the CEO of the product. Usually, this means that the PO also has control of the money invested in the product. The Product Owner is responsible for deciding what features to build based on what is valuable. Still, if you don’t control how and where you spend money to deliver that value, you won’t be sure that you are making the right choices.
Solution
Give the Product Owner the actual responsibility and accountability for product success by giving them the purse strings. The product owner should make all decisions about the product’s budget, not some other sponsor or executive. Having control of the money empowers the Product Owner to treat it more like a personal bank account than an endless corporate supply of cash.
Focusing on the wrong metrics
Problem
In this scenario, I assume the Product Owner does “own” the budget, but they’re focusing on the wrong things to measure. Not everything can or should be measured. The items you do decide to measure matter because people will adjust their behavior based on numbers. I know it’s sad, but it’s also true.
Solution
Choose to measure the right things. How do you know what’s right? There are some obvious choices, such as profit margin, utilization rates, percentage of market share, etc. These key financial metrics should tell you if your product is succeeding or if you need to change course. Also, keep in mind that financial measures aren’t the only things that can reflect your product’s success. There are also intangible measurements, such as customer sentiment, increased brand awareness, net promoter score (NPS), and other less tangible ways of determining value realization.
No visibility into the product’s budget
Problem
All right, I know some of you will think I’m redundant – it’s deliberate. The first problem listed above (of not having control of the budget) is slightly different from having no visibility into the budget. In this scenario, a Product Owner has neither authority nor visibility; it’s like flying an airplane with a blindfold over your eyes. If you don’t have power over the purse strings but can at least see what your typical costs are for an iteration, you can figure out how much you’re spending.
Solution
If the Product Owner cannot have control over the product budget (for some strange reason), then they should at the very least have visibility into the costs – even if it’s just at the highest level, such as the total cost of labor for a fully staffed Scrum Team per iteration. Once you have this number, you can discern a lot of other information. The more granular the level of data, the more accurate and precise your measurements will be, so if you can get to the line item level, you should. Remember, this is your “baby,” and you are responsible for keeping it alive and growing.
Final Thoughts
As I said before, money matters can be a touchy subject. Many organizations don’t want financial information to be visible or controlled by a non-director or non-executive. Not sharing this knowledge is a significant red flag about the organization itself and the company’s lack of trust and transparency. I wouldn’t want to work for a place like that myself. If you hire competent people, award them the trust they deserve and believe they’ll treat your resources wisely and invest in the right priorities.
Now, what do you think? Have you seen Product Owners that didn’t have visibility or control of the product’s budget? How did that work out? What about metrics – have you seen the wrong type of metrics used for justification of decisions? If so, let me know in the comments below!