Should we invest in a better Product Owner?

I won’t bore you with the calculation, but if you assume that a better Product Owner can:

  • increase the value of Product Backlog items (stories) in the ‘project’ by 20% on average
  • identify the Pareto curve partially in the Product Backlog, so that an 85-33 rule applies

And if we assume that the team costs about $1 million per year (all-in) and delivers, before the better PO, about $3 million per year, then what happens?

The team is now able to deliver $3 million “projects.” This becomes a $3.6 million set of work (+20%), and we can deliver 85% of the value 3 times per year (85% of the BV of the $3.6 mil with 33% of the work — which means we find three projects of the same sort that we can deliver in one year).  Thus, each delivery is 85% of $3.6 million or more than $3 million each. That means delivering $3 million three times in a year, or a total of $9 million of BV in a year.

Thus, this new PO has tripled the business value delivered by the team.

So, how much could you afford to invest in that better PO to get those results?

Probably we are OK if it is more than $1,500 (e.g., for a Certified Product Owner course). And, while the course is good, I suspect that most Product Owners need more than just the course to get those results (e.g., perhaps some coaching from someone really good). And you can easily afford that, too.

So, what’s the first impediment to doing this?

That varies from firm to firm and situation to situation.

First: Get a good PO and invest in him or her.

Then: I find is that most firms think of their IT department as a cost center. Thus they have no concept of BV delivered by IT, much less metrics around that. So, I am suggesting that just getting estimates of BV (and telling the team) and then measuring (even if only roughly) the BV actually delivered would be a big step in the right direction.

BV does not have to be measured in money — at least not initially. Depending on your firm, other direct metrics could be more meaningful. Then you need some experts to give you a rough estimate of the money value of those benefits.

Knowing the BV delivered by each team might be kind of important right now (in a recession), in more ways than one.

Go talk to your Product Owner about that today.



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