A basic Certified Scrum Product Owner course gives Product Owners what they need to be effective product managers with Scrum. However, after about three months of being on the job, most people begin to realize being a Product Owner is a lot harder than it looks. Why? 

Well…too often Product Owners are distracted by the crisis of the day. Other times, they are too deep into refining the engineering solution. Since most of their time is spent thinking tactically, Product Owners rarely take time to think holistically about their product, business and customers. Moreover, if there is any data about the product or customer needs, it is woefully out-of-date because, “Who has time to schedule a customer call when a HiPPO is breathing down your neck?” Consequently, most product decisions tend to be reactive and fail to consider broader strategic implications of importance to stakeholders. 

Product Playbook: The Key to Success

In our experience, the main reason why Product Owners struggle to think strategically is because they lack a product playbook, the central repository of lightweight documents which describe the product, customers, market trends and other important data. Since the playbook is absent, product leaders often flounder in three areas:

  1. Continuous customer discovery
  2. Creating alignment among stakeholders
  3. Identifying and evolving the business model

Below, we discuss each area and provide recommendations and frameworks for improvement. 

1. Continuous Customer Discovery  

One of our favorite descriptions of a product manager’s core responsibilities comes from this quote by John Miniati, “I have a responsibility to my customers, current and future, to release a product that meets and exceeds their needs — even if they are not fully aware of their needs.” What inspires us about this statement is that it suggests great Product Owners have a list of questions that answer three important product development questions: 

  • What are the customer’s interests?
  • What are the customer’s preferences for our solution?
  • What is the customer’s willingness to buy our solution?   

In our experience, customer discovery is done well when there is a continuous dialogue with the market — current and potential customers, partners, and industry experts. Product leaders taking part in regular experiments with customers and end users develop new insights into unmet needs, how current products are performing, potential ideas for new products, and are able to identify new customer segments. 

Product discovery is much broader than prioritizing a Product Backlog. Unfortunately, what we often see are Product Owners who believe customer research is not much more than asking questions related to feature prioritization. They may get in touch with their stakeholders, customers and end users maybe once or twice a year, and justify this cadence with comments like, “I don’t need any more help prioritizing features. We have a backlog that will take us all year to get through!” Because engagement is so infrequent, these leaders miss out on opportunities to learn the unexpected. As a result, their products tend to be uninspiring because they just deliver more of the same old thing.  

Here are some frameworks we recommend to restart your customer discovery process:

  • Start Your Day: if you ask a customer what their biggest problem is, they will most likely answer it in the present because most customers assume time = now. Start Your Day is a collaborative Innovation Game® that encourages your customers to start thinking about their biggest problems using a giant calendar. With this mental model, they now have a way to remember the struggles that might only come up biweekly, monthly, quarterly, or annually, and these insights can be game-changing.
  • Buy a Feature: is another collaborative Innovation Game where small groups of customers work together to collaboratively fund items that are most important to them. The negotiation between customers provides Product Owners with rich insights into the nature of the problems customers are trying to solve and how they determine their priorities. Because participants need to convince others to help them fund what is most important, their conversations reveal key insights that influence day-to-day tactical decisions as well as strategic items on the roadmap.  

2. Creating Alignment Among Stakeholders 

Ask five stakeholders what they think about your product and you are going to get at least seven answers. Ask five Product Owners what is one of their biggest challenges in product development and they will tell you it is aligning stakeholder expectations. Yet even with the understanding that managing stakeholder expectations is really important, we still see Product Owners get burned by this challenge.

In working with our clients, we find that when decision-making is a mystery, stakeholders are naturally resistant to decisions which were made for them. Our experience is that when Product Owners and product managers engage in collaborative and transparent communication with their stakeholders, building and maintaining alignment is much easier. Over and over again, when stakeholders participate in making the decision collaboratively with their peers, or have access to the reasoning which led to a decision, they are much more supportive of product decisions and those decisions tend to be durable.

However, there are two factors which make collaborative decision-making challenging for product leaders: 

  • Too many stakeholders: for some products, the number of stakeholders is staggering. Having more than fifteen stakeholders is not uncommon for many product managers, so keeping in touch with stakeholders can be a fulltime job. Unfortunately, this distracts the Product Owner from their other strategic responsibilities related to discovery and optimizing the business model. 
  • Alignment is not static: it is our observation that stakeholder perceptions tend to drift over time. As stakeholders interact with the product, observe competitive offerings, speak with business leaders about their goals and talk to their peers, stakeholders develop new understandings of the product, the market and the users, which weakens their previous commitments and decisions. It’s not that the previous perceptions were bad, it’s just that stakeholders are learning new things. 

Here are three frameworks we recommend to create and maintain alignment among your stakeholders:

  • Power vs. interest: not all stakeholders are created equal. Use this stakeholder mapping framework to identify all the people in your world that are most important to your success. Product Owners who ask for help from a few other people tend to do a better job identifying all of the key stakeholders and ensuring that they categorize them based on reality, rather than what they hope is true, so we recommend making this activity a collaborative effort. 
  • Cover Story: too often, Product Owners and product managers assume there is agreement about what a perfect future looks like. When stakeholders are not aligned on their perfect future, though, that creates tension and delay among the stakeholders, at best, and failure in the extreme. Use Cover Story to ask your stakeholders to imagine what success looks like by describing it as if it was a featured article in an important publication. By creating Cover Story collaboratively, this will reveal any misaligned visions and help your stakeholders to collectively clarify where all of you are heading with the product. 
  • Impact-Effort Matrix: once you have alignment around the goal, use the Impact-Effort Matrix to collaboratively make sense of possible features and capabilities that might appear on a roadmap or Product Backlog. Stakeholders own the y-axis (impact) and place items based on how much business value a particular feature, or set of features, would bring. The engineering teams and developers determine how difficult, or time-consuming, each is to implement along the x-axis (effort.)  

3. Getting Your Business Model Right 

In the Scrum world, only a few of the Product Owners we have encountered have a clear understanding of their business model and even fewer are responsible for optimizing and evolving that model. This is unfortunate, because if they do not understand how value is exchanged, then they cannot be the owner of anything. While product managers tend to do a better job of being focused on these objectives, most could also use some help given how difficult it is to get this right.

Here is the interesting thing that our clients report about value exchange and business models – most of it is speculative until you have achieved product-market fit. Once the market recognizes the value of your product-solution fit, i.e., you are selling it, the majority of the product’s lifespan is spent evolving the value exchange model and clarifying the business model until you reach profitability. If you cannot reach profitability with your current business model, then a pivot is required or the product is discontinued.

So why do Product Owners and product managers tend to flounder in this area? In many cases, the organization did not do the up-front work necessary to understand what is valuable from the customer’s point-of-view and the value proposition is weak. Other times, Product Owners and product managers are simply not doing the basic math to calculate margin and profitability. Finally, because so many product leaders are focused on resolving the crisis-of-the-day, they are not exploring the competitive landscape for new ideas, opportunities and competitors.

Here are some more frameworks we recommend to help you focus on getting your business model right: 

  • Customer profile – this framework is an excellent place to begin if you feel your value proposition is weak or undifferentiated from the competition. With a customer profile, the goal is to describe the customer in a structured way so that you can develop insights which enable you to differentiate your product on the jobs, pains and gains that really matter to the customer. In our experience, we find the fastest way to achieve these insights is by asking the customer which jobs are important, which pains are extreme, and which gains are essential.
  • Product scorecard – you cannot evolve your business model if you do not have a simple dashboard of metrics. While each product has its own unique set of KPIs, the broad categories outlined in this framework are a good place to start. At the bare minimum, we recommend having specific metrics directly related to profitability of your business model and metrics which provide insights into the quality of your customer’s experience.

If you want to kickstart your Product Playbook and look at some practical examples of frameworks you can use to create it, based on our experience at Applied Frameworks, you can watch this webinar.

More on Product Playbooks . . .

This has been Part 1 of our ongoing series on Product Playbooks. Now that we have clearly identified the challenge, the next step is for you to build your own product playbook. While everyone’s playbook will be unique, we have seen some common frameworks recur across multiple clients, domains and products. Our goal is to share step-by-step instructions on how to use the frameworks in our playbook in order to inspire you to create your own version. Our ongoing series continues as follows:  

Part 2 – How to Build a Product Roadmap – a step-by-step guide to developing a product playbook. 

More to follow . .. so be sure to check back soon!