While the role of Business Owner would speak nothing to the members of a Scrum Team in a dozen-person startup, it speaks a lot to those working in large, multinational corporations where agile is practiced at scale.
Whether you’re new to agile or you found yourself working in such a setup for the first time, let’s spend some time to understand the differences—and define the relationship—between the two.
The Product Owner is a member of the Scrum Team accountable for maximizing the value of the product resulting from the team’s work. The Business Owner is a stakeholder of the Scrum Team who, in one way or another, has an interest in the delivery of that value.
There is no universally accepted definition for the role of Business Owner within the agile community. In large organizations, this term is usually reserved for the person who sponsors the work of the Scrum Team.
That said, the general rule of thumb is that the role of the Business Owner is more senior than that of the Product Owner. In Bain & Co’s definition of the agile enterprise, for example, the former would be considered to be an agile leader.
It shouldn’t come as a surprise, then, that most Business Owners are directors or executives who head a unit or function within the company whose customers or employees are the product’s users and who therefore have a stake in its continued development.
That stake should ideally be quantifiable using Objectives & Key Results (OKRs) negotiated between the Business Owner and the Product Owner as part of a delivery cadence.
Lines of Communication
As a stakeholder, the Business Owner can choose to engage with the Scrum Team by systematically attending and proactively participating in its Sprint Review meetings.
However, some Business Owners see that as an inefficient use of their time, and they choose to talk directly to the Product Owner instead.
In certain cases, the Business Owner can also delegate the communication with the Product Owner to one of their direct reports, involving themselves only when the budgeting cycle requires or when elevations/escalations require an executive decision.
There is no right or wrong here:
While it would be ideal for all members of the Scrum Team to get exposure to the feedback and questions from their agile leaders, the power distance and unwritten laws in some cultures and organizations restrain that from happening.
In such a case, the Business Owner speaks directly to the Product Owner, ad-hoc or, preferably, within a frequent-enough 1-1 routine.
The danger of this approach is that the Business Owner, already detached from the aspirations and challenges of the Scrum Team, can lose sight of the incremental and iterative nature of its work, pressuring the Product Owner with well-intended but counterproductive ad-hoc requests.
If the Product Owner speaks to one of the Business Owner’s direct reports, then the quality of that communication and the outcomes of that collaboration would depend on the relationship between the two.
Reporting Relationship or Not?
The relationship between the Business Owner and the Product Owner can be as simple as a direct or dotted reporting line—and as complicated as a cross-functional arranged marriage bound by organization design and budgeting cycles.
Neither is necessarily better than the other.
For example, even the most skilled Product Owner would struggle to report to a Business Owner who’s unaware of the intricacies of building and running products, regardless of industry or domain.
This is the main reason why some large organizations choose to build product management teams led by a VP of Product who then manages Directors of Product or Product Owners, depending on the size and complexity of their organizational chart.
But even such an organizational design can create intricacies, as not all product teams own the budgets behind their products.
Multiple Business Owners
In some cases, the Product Owner must align with multiple Business Owners within the organization. While this means that the product is widely adopted and its use scaled, it also risks conflict and political wrangling as multiple sponsors compete for prioritization and delivery.
In such a situation, the process for receiving and prioritizing business needs should be formally defined, and guardrails should be established that introduce transparent decision-making mechanisms and escalation paths that must then be accepted by everyone in the chain of command.
- The roles, reporting lines, and accountabilities of the Business Owner and the Product Owner are defined and known;
- Sponsorship agreements and budgeting decisions are bound to the vision and goals for the product, and not short-term needs;
- In their communication, the Business Owner and the Product Owner focus on promoting progress at a sustainable pace;
- The Business Owner and/or their direct reports are engaging with the Scrum Teams that they sponsor at Sprint Reviews;
- A bi-weekly or monthly routine for communication between the Business Owner and Product Owner is in place.