Living In An Agile World: the Role of Product Management When Development Goes Agile

The Strategic Role of Product Management When Development Goes Agile
By Steve Johnson, Luke Hohmann and Rich Mironov

...the best job to date of describing the yin
and yang of APO (Agile Product Owner) and
APM (Agile Product Manager). Moreover, the
authors are experts in the field of software
product management so they speak with
knowledge and credibility from the PM role.
Dean Leffingwell / Scaling Software Agility

Living in an Agile World: the Strategic Role of Product Management when Development goes Agile 2

About the Authors

Luke Hohmann Steve Johnson is a Rich Mironov is
is the Founder & recognized thought- Chief Marketing
CEO of Enthiosys, leader on the strategic Officer at
a recognized role of product Enthiosys and a
expert on agile management and veteran product
product management of software marketing. Broadly published and strategist. Author of the popular
products and a former senior a frequent keynote speaker, Steve newsletter on technology
software product manager at four has been a Pragmatic Marketing product strategy, Product Bytes,
companies. He is the author of instructor for more than 10 Rich is on the faculty of the
three books and numerous articles years and has personally trained Executive Development Center
on software product management, thousands of product managers at the University of California
and a frequent speaker at software and hundreds of company senior Berkeley’s Haas School of
and other industry events. He executive teams on strategies for Business and a peer reviewer
is currently a member of the creating products that people for the California Management
Agile Alliance. Contact Luke at want to buy. Contact Steve at Review. In addition, he serves as
lhohmann@enthiosys.com sjohnson@pragmaticmarketing.com VP Marketing for the Northern
California Product Development
and Management Association
(Norcal PDMA). Contact Rich
at rmironov@enthiosys.com

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Copyright © 2009 Pragmatic Marketing, Inc. All rights reserved.
Copyright holder is licensing this under the Creative Commons License. Attribution 3.0.
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Other product and/or company names mentioned in this e-book may be trademarks or registered trademarks of their respective companies and are the sole property of their respective owners.

Manifesto for
Agile Software Development

We are uncovering better ways of developing software by doing it
and helping others do it. Through this work we have come to value:

Individuals and interactions over processes and tools
Working software over comprehensive documentation
Customer collaboration over contract negotiation
Responding to change over following a plan

That is,
while there is value
in the items on the right,
we value the items
on the left more.

agilemanifesto.org


While software development teams have been And a product manager is now called a
moving toward agile methods for years, many Product Owner… right?
product managers are only now becoming
aware of it. An agile approach applies Wrong!
collaborative and continuous improvement Companies adopting agile methods know that
concepts to software development. It product teams need a voice representing the
emphasizes close collaboration between customer. Developers need personas, market
development teams and customers; frequent problems, and most of all, a prioritized list of
delivery of deployable code (in sprints); face- requirements. Agile methods advocate a role
to-face communication with customers; tight, called product owner to support the product
self-organizing teams; managing backlogs of team with customer and market information.
user stories to reduce requirements churn; Since the closest equivalent to product owner
and identification of self-improvement in most companies is the product manager, it
opportunities. seems natural to equate the two.
There is no single, definitive “agile method.” But product owner and product manager
Agile teams tune practices and processes for are not the same. In fact, a product owner’s
themselves to create a method that is unique responsibilities are just a small subset of
to their environment. Broadly, agile methods product management.
function as both an organizational philosophy
and a set of development methodologies.
When you adopt agile development methods,
you encounter new concepts, new artifacts,
new planning methods, and new roles and
relationships. It seems that agile teams do
everything in a new way. And, as you attempt Agile teams tune practices and
to integrate agile into your existing systems,
you’ll also attempt to map these new concepts processes for themselves to
to your old, familiar concepts. Requirements
are now stories; iterations are now sprints. create a method that is unique
to their environment.


What is a product owner?
The product owner is a new role, created
and defined by the Scrum Alliance
(www.scrumalliance.org). Product owners live
full-time with development teams—elaborating
users’ stories, managing sprint-level backlogs,
expanding specifications, and interpreting
product vision.
In Scrum, a single person must have final authority
Most product companies already have
representing the customer’s interest in backlog
staff members with similar skills, such as a
prioritization and requirements questions. This
requirements analyst or business analyst
person must be available to the team at any time,
(titles and job descriptions have shifted
but especially during the sprint planning meeting
over time, but product companies
and the sprint review meeting. Challenges of being
have always needed to provide
a product owner:
developers with detailed, feature-
level information and UI guidance; • Resisting the temptation to “manage” the team.
someone with intimate customer The team may not self-organize in the way you
experience is always necessary to would expect. This is especially challenging if
build great software). some team members request your intervention
The product owner addresses the agile with issues the team should sort out for itself.
development teams’ intense need for real-time • Resisting the temptation to add more important
input on user stories, user experience/user work after a Sprint is already in progress.
interface, and requirements.
• Being willing to make hard choices during the
sprint planning meeting.
• Balancing the interests of competing
stakeholders.


Spotting fundamental flaws
Product owners can close the gap between
a product manager’s inbound role (that is,
understanding the needs of the marketplace)
and the development team’s need for product
direction (that is, understanding the detail of
personas and their problems).
There are, however, a few fundamentally flawed
assumptions built into the product owner role
that experienced product managers immediately
spot. These flaws become abundantly clear
when the product owner role is aligned against The top determinant of a product’s
pre-existing functions (e.g., requirements analyst), revenue success is whether it meets
which we would not expect to drive strategy: real customer needs. Regardless of
what the development team builds, a
1. The top determinant of a product’s product without interested customers
revenue success is whether it meets real is a failure. It’s the agile product
customer needs manager’s primary job to meet existing
customers and potential prospects
face-to-face and deeply understand
2. Product owners can’t rank backlog
what they want.
based on ROI
Throughout the development process,
3. Real revenue is driven by pricing the product manager represents
and packaging customers against short-term trade-
offs. If there is a product owner, he
or she needs to channel the product
4. Creating successful benefits and feature manager throughout the day, avoiding
descriptions that truly sell products, short-term thinking that can come
requires a detailed understanding of the from living with Development every
technology and a detailed appreciation day and answering only to the
of the customer’s problem technical team. Remember: You can’t
understand customers without getting
out of the office.


Product owners can’t rank backlog Real revenue is driven by pricing Creating successful benefits and
based on ROI. In fact, this task is and packaging. Product managers feature descriptions that truly
impossible for anyone to do, since typically own pricing; product sell products, requires a detailed
real business metrics and financial owners rarely do. And unless you understanding of the technology
projections don’t exist at the feature/ have a seasoned product manager and a detailed appreciation of
backlog/item level. Researchers tell us driving software pricing and the customers’ problem. This
that the only way to assign revenue at packaging, you could be leaving takes lots of practice, hands-on
the feature level is to perform conjoint revenue on the table. field experience, and a clear view
analysis on every feature. Will any from both sides. In our experience,
company perform this type of research internally promoted technical staff
for each product project? Probably not. members almost never get this
right. Marketing materials created
A broader and more rigorous backlog under this approach are often
ranking approach, “prioritizing for feature-heavy, too technical, and fail
profit,” considers market opportunity to motivate the exchange of money.
and corporate strategic fit at the
product level. Most important to
this process is someone who can
prioritize the issues of all stakeholders,
considering the needs of buyer and
user personas, key new markets, and
issues of internal stakeholders in Sales,
Marketing, Support, Development,
and others. In cases where large projects (products) are divided into
Every release must have at least one multiple teams, it makes good sense to have a product owner (or
feature (story, improvement) requested requirements analyst or business analyst) assigned to each team—
by each major stakeholder group. just as we would have a development manager and program
Figuring out the features for a release manager (scrum master) and QA manager assigned to each team.
is an organizational challenge, not a The point of integration for these teams, though, is a single
technical challenge. The market-driven product manager. When the executives demand “one throat
product manager should determine to choke,” it’s the product manager who is responsible for
what goes into the final product; overall success of the result.
a product owner cannot.


Failure modes
Over the short term, we can easily see product owners operating without close alignment with a product manager.
Over the course of a release—or a half-dozen sprints—we repeatedly see a few failure modes:
• Trading off company-wide strategic product fit in favor of product-level features. Good product managers look
across the product line for ways to make the overall collection more valuable. Hermetically-sealed product teams tend
toward local optimization: what’s best for my release plan—without regard to portfolio-level needs. Yet Sales and
Marketing are constantly trying to cross-sell existing products into the current customer base. Without some strategic
thinking sneaking into every sprint-level prioritization, the company loses many chances to make money through
product bundling, cross-selling, integrated features, and old-fashioned customer opportunities.
• Assuming a few showcase customers represent the broader market. Experienced product managers know
that one customer is not a market—unless you are a custom development shop or internal IT group. It’s easiest
to believe that three customers previewing your product represent the entire market. Product managers have
had this awareness beaten into their heads after thousands of similar customer meetings customer meetings
and presentations. First-time product owners tend to be naïve (or hopeful) that the input they get is both
true and universal.
Real revenue is • Adding new features without pricing them. Product owners worry about completing the sprint; product managers
worry about making money. Every new feature is an opportunity to re-bundle, re-price, or encourage customers to
driven by pricing and upgrade in order to capture more revenue.
packaging. Product • Starving the product architecture in favor of customer-visible features. Product managers and product owners
alike often neglect the architectural element—forgetting to incorporate system improvements into the backlog. To
managers typically own ensure that system internals, architecture, “technical debt,” and other technical issues are kept in the priority, we add
the architecture itself as a stakeholder. That is how you keep the architecture healthy—both now and four releases
pricing; product owners from now.
rarely do. • Wandering from the roadmap. Development teams (and their product owners) concentrate on the next release,
but often lose sight of the 12- to 18-month roadmap and goals that achieve business results.


Product management is outwardly focused
Developers and engineers tend to see product managers as internal technical
resources, to be used as much for project management as product management.
For some companies, agile development methods seem to have made the product
management role even more internally focused—with product managers getting
pulled into deeper tactical, technical activities.
But spending so much time with internal technical teams means less time spent
outside the company in the market. As Pragmatic Marketing-trained product
managers know, you don’t learn anything about the market while sitting
at your desk.
There’s more to product management than supporting Development. Product
managers also work with Sales, Marketing, Support, and other departments. Most of
all, astute product managers work closely with the company’s senior executives.

The activity spectrum of product management
The activities of product management span the range from strategic to tactical.
Some product management activities are focused on the business of the product,
while others are centered more on the technical aspects of the product. Applying
this concept to a grid looks like this:

BUSINESS

STRATEGIC TACTICAL

TECHNICAL


• How Development sees product managers
Technical/Strategic
Developers and other technical colleagues tend to see product
managers (and therefore, the product owner role) as a strategic,
technical resource. A developer’s view of product management
might include market requirements, technology assessment,
definition of user personas, and other technical artifacts. In
many cases, the team realizes the product manager is a market
encyclopedia and so, product teams want a customer expert
to be available all day, every day.
With this grid • How Sales sees product managers
in mind, there Technical/Tactical
Have you ever known a sales person who didn’t see everyone in
are four ways the company as an a resource for selling? Product managers are
the preferred source for great product demos—they can explain
people within the internals of existing features and they know the future plans for
the product. Who wouldn’t want to take them on a sales call? So
the organization salespeople often rely heavily on product managers as a technical,
The Pragmatic Marketing
Framework
typically look at tactical resource.
• How Marketing sees product managers
Business product managers: Business/Tactical
Business
Plan
Positioning
Marketing
Plan
In most vendor organizations, the Marketing department is staffed
with experts in promotion rather than experts in technology.
Market Market
Pricing
Buying Customer And this makes sense. But without some technical abilities, these
Problems Definition Process Acquisition
promotions experts can’t do a very good job of positioning and
Win/Loss Distribution Buy, Build Buyer Customer messaging. And technical product managers and product owners
Analysis Strategy or Partner Personas Retention
are usually terrible at it too. That’s why so many companies
Distinctive Product Product User Program
recruit product managers (or product marketing managers) into
Competence Portfolio Profitability Personas Effectiveness
the marketing department. Marketing people rely on product
Strategic MARKET STRATEGY BUSINESS PLANNING PROGRAMS READINESS SUPPORT Tactical management for tactical, business-oriented information in support
of their promotional, go-to-market plans.
Competitive Product Launch Sales Presentations
Landscape Roadmap
Innovation Requirements
Plan Process & Demos • How the executive team sees product managers
Technology Use Thought “Special“
Business/Strategic
Assessment Scenarios Leadership
Collateral
Calls Executive management relies on product management as a strategic
resource—the source for strategy and business thinking at the
Status Lead Sales Event
Dashboard Generation Tools Support product level. The executive team wants to see business plans and
product roadmaps.
Referrals & Channel Channel
References Training Support
Rather than defining one role, product management actually spans
Technical four disciplines.


Mapping product management activities
Product management is often ill defined and poorly understood in
technology companies; yet the role can be one that propels the company to
the next level of performance. Rather than running the business like a hobby,
effective product managers focus on both the business and the technical
aspects of product management.

The Pragmatic Marketing Framework describes the activities, artifacts, and
practices for defining technology products and delivering them to market.
From market analysis to channel support, product management entails
activities ranging from strategic to tactical and from less technical to quite
technical. These activities align loosely with the expectations of the four
groups: Development, Sales, Marketing, and corporate executives.

The most common organizational format is for one product manager
to perform all of the activities of the entire framework. It’s a big job, but
a satisfying one. It is the president of the product (or perhaps a better
metaphor is the parent of the product). In any case, it’s also what the
“agilists” call a “single, wringable neck.” A single voice of priority.
With one product manager, everyone knows where to go for the definitive
answer. But… as your business grows larger, the demands on this single
person grow greater and greater, and soon exceed the number of hours
available in a day.


The four roles of a product manager
As you can see, the role of There are four distinct roles played by the product manager, which
is a much larger function than that defined by a product owner.
product management includes The four most common titles are product strategist, product
marketing manager, product owner, and sales engineer. The
the responsibilities of product diagram below shows the four roles aligned with the Pragmatic
Marketing Framework.
owner— plus much more.
Each organization adapts these titles and the associated
activities to the way it does business. If you’re new to this product
management framework, download the e-book The Strategic Role
of Product Management.
It is common for product owners to report to the development
Product Business
Positioning
Marketing
organization, but product managers are increasingly reporting
Strategist Plan Plan
into their own department—separate from Development and
Market
Problems
Market
Definition
Pricing
Buying
Process
Customer
Acquisition
from Marketing.

Win/Loss Distribution Buy, Build Buyer Customer Product
Analysis Strategy or Partner Personas Retention
Marketing
Manager
Distinctive
Competence
Product
Portfolio
Product
Profitability
User
Personas
Program
Effectiveness
As you can see, the role of product management
includes the responsibilities of product
MARKET STRATEGY BUSINESS PLANNING PROGRAMS READINESS SUPPORT
owner—plus much more. The practical product
Competitive
Landscape
Product
Roadmap
Innovation Requirements
Launch
Plan
Sales
Process
Presentations
& Demos
manager serves as a hub of market and product
information, relies on business and technical
Technology
Assessment
Use
Scenarios
Thought
Leadership
Collateral
“Special“
Calls savvy, and works closely with Development,
Marketing, Sales, and other departments. Most
Status Lead Sales Event
Dashboard Generation Tools Support of all, a product manager is the executive team’s
Product Referrals & Channel Channel eyes and ears at the product level, making
Owner References Training Support
strategic decisions on the future of the product.

Sales
Engineer


Do We Really Need a Product Owner? By Rich Mironov

Many agile development teams think they need a product owner for every project, but
product owners address only a small portion of the agile product management challenge. The
product owner role has been created by the agile development community to focus on the
hour-by-hour demands of an agile team—even though software product companies typically
have a product manager and other existing resources to meet those needs.
A product manager’s focus is creating products that are delivered to a market full of customers,
not one-time projects delivered to a single customer. And if we have agile product managers
assigned to the product, do we ever need a product owner?
A thoughtful answer needs context, and must be based on the structure and talents of the
team. Agile development is scaling beyond single co-located teams and now includes
revenue-driven product organizations. So let’s consider four situations:

1. Single, co-located agile team
2. Large, co-located projects with multiple development teams
3. Geographically distributed development teams
4. My product manager isn’t doing a good job
and doesn’t know agile development

Do I Really Need a Product Owner?

Single, co-located agile team Large, co-located projects with
One agile product manager can handle all of the multiple development teams
demands from a product team that sits together. In As products and projects grow, Development has
fact, one agile product manager should be able to to create additional agile teams. This approach is
manage two product teams in the same building—even sometimes called the “scrum of scrums” approach,
factoring in travel, customer visits, and demands from where one backlog is split among three or more groups,
Marketing/Sales. We routinely (and confidently) allocate each of which has a development manager, project
50% of an experienced agile product manager to each manager (scrum master), QA group, etc. The experience
development team. When everyone sits together, there’s level of the agile product manager matters here, as well
no need for a product owner (or requirements analyst as scale, team cohesiveness, and whether the groups
or business analyst) on the team to supplement the have radically different technical challenges. It’s critically
agile product manager. important that one person (the agile product manager)
continues to be fully responsible for the resulting
product and its revenue success, but it may be time
to provide some help.
Most product companies already have a range of
resources and talents to apply, so they might have
a junior product manager needing hands-on agile
experience under the guidance of a seasoned agile
product manager; business analysts and requirements
This situation is all about trust, skills, analysts with intimate knowledge of the specific
customer requirements; sales engineers on loan for
team-building, and managers being individual product releases; or someone formally
designated as a product owner. In all cases, the
brave enough to say what they think. product manager is delegating specific authority and is
responsible for overall execution, coordination, priorities,
and customer satisfaction. The product owner (by
any name) is assigned to remove roadblocks, research
questions, elaborate, clarify, motivate, and assist—but
also to raise issues of substance with the agile product
manager. So, product owners are optional for complex,
co-located projects. Product managers need to ask for
help if they need it, and executives should provide it.


Geographically distributed development teams
When Development is split across time zones and continents, one product
manager can’t possibly provide the face-to-face daily input and leadership that
agile development demands. Even if the sub-projects are part of one product’s
overall architecture—and one agile product manager’s overall vision—you
need leadership on the ground in each location to keep the work of agile
moving. This usually includes a development manager, a project manager
(scrum master), test/QA manager, and a product owner. Here, the company
should provide some formal agile training to resources such as business
analysts, since they’ll be without much in-person guidance from their agile
product manager.
Plane flights are too slow, phone calls too impersonal, and hour-by-hour task
assignment changes posted to the walls of the War Room too complicated to
manage at a distance. Having someone in each office responsible for keeping
the team clear on user stories/backlogs seems essential. As above, this quickly
spins out of control unless the product owner (or equivalent) is tightly aligned
with the remote agile product manager, and quickly escalates issues to that
person. So, a product owner seems necessary for each remotely located
development team.


My product manager • “We need more of a kick-start, products rather than identifying the
especially since project timelines are one product manager who’s unable
isn’t doing a good job at risk. Let’s bring in an outside agile to get his or her features/benefits
and doesn’t know product manager for two or three straight. Finance invents a “pricing
agile development iterations who can show us how it’s czar” to fill in for product managers
done while getting everything who stumble through the pricing and
Ask most agile development managers back on track.” packaging process without leadership
in private, and this is what they really or strategy. Developers freely
worry about. They are way ahead of • “We all know that product manager interpret vague requirements and
their (non-agile) product managers X was barely competent doing hope they build marketable software.
and are used to slow, second-hand, waterfall, and is hopeless under
poor-quality customer input. Hiring agile. Let’s replace him instead of Said another way, product
a product owner is one way of spreading the load.” management is a very tough job,
protecting the team from bad product and we need to do it well. Creating
• “Development doesn’t understand product owners to cover our personal
management. The thinking goes, “We
why product managers can’t be shortcomings or lack of agile training
still won’t have good market inputs
here at Headquarters every single is treating the wrong disease. Let’s
or true customer-driven backlogs, but
day. Let’s give the development make sure we’re doing our best agile
at least we’ll manage our sprints well,
team a half-day tutorial on what product management instead of
and our developer-side collaboration
(else) product managers do, and meekly letting Development redefine
will deliver something usable.”
why sitting at their desks every our responsibilities. If we’re short
This situation is all about trust, skills, single day leads to inevitable of trained, capable agile product
team-building, and managers being strategic failure.” managers, let’s get busy recruiting
brave enough to say what they think. It and mentoring and training them
• “Iteration Planning is always on
should not be about creating another to fill the real need.
Mondays and Retrospectives are
new title in order to cover for a failing
always on Fridays. Can the agile
product manager.
product managers schedule more
Coming back to our core beliefs as of their customer travel and sales
“agilists” (we value individuals and briefings mid-week?”
interactions over processes and
tools; we value collaboration over
• “Developers want to hear even So, do we really need
contract negotiation), the leaders
more of what customers really a product owner?
say. If we promise not to say
of Development and Product
anything, can we sit in on your Sometimes—in the right context and
Management need to step up with
next few conference calls?” with distributed development teams
honest discussions such as:
that need real-time, local help. Never
Product management veterans staff up a revenue-driven product
• “Our product managers don’t have
have seen similar reactions from without an agile product manager, but
any agile training. Let’s get them all
other functional groups faced with don’t assume that every agile team
to class this month so we can stop
weak product management teams. needs a product owner.
complaining about it.”
Marketing suddenly creates product
marketing managers for select


“ We hope you enjoyed this e-book and it gives you some food for
thought. If you want to learn more, check out the following.
- Steve, Luke, Rich

Steve Johnson’s Product Marketing blog

Luke Hohmann ’s Agile PM blog

Rich Mironov’s Product Bytes

Attend a training seminar or we can come to you

The Strategic Role of
PRODUCT MANAGEMENT
Download Strategic Role of Product Management e-book
How a market-driven focus
leads companies to build
products people want to buy
By Steve Johnson

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Living In An Agile World: the Role of Product Management When Development Goes Agile

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