Plight of Product Owners in Medium and Large Organizations

What prevents product owners in large organizations from functioning like product owners in startup companies, who quickly release new products in the market with lower budgets?

A few months ago, I wrote a post on Agile Journal about how startup company product owners are crucial in driving collaboration within and outside the product teams, thereby influencing the organizational culture [1] to create innovative products. This article takes a contrasting view by highlighting the plight of product owners in large- and medium-size organizations. While product owners in startups (or startup-like organizations) have more leadership power and influence, those in medium and large organizations spend a lot of unnecessary time and effort maneuvering the internal politics in order to implement their ideas. The existing organizational culture, politics, and business model all contribute to this conundrum.

According to Clayton Christensen, Harvard Professor and author of The Innovator's Dilemma, there are three factors that determine what a company can or cannot do [2]:

  1. Resources (people, machine, designs, products, technologies, etc.)
  2. Processes (decision protocols, business processes, levels of permissions, patterns of interaction across business units, etc.) used by its people to convert resources to business goals
  3. Values (a direct by-product of organizational culture) used by its people to decide on priorities and goals

The capabilities defined by these three factors consistently return results year after year as long as the organization is working in the same domain and confronting similar challenges. However, if the organization wants to explore new horizons and bring innovative products and services to market—or create new markets—then these very organizational capabilities become constraints. There are two different cases where product owners with abundant resources, working in relatively large and stable organizations, are struggling to produce new market-defining products due to a combination of people, processes, and values that brought prior successes to their organizations. Product owners in most medium and large companies are not in a leadership position where they have the organizational positional power to affect overall culture and develop innovative products that create new markets or ecosystems.

Case 1: A Very Large Multinational Financial Organization
I recently worked with the digital marketing division of a large financial company that wanted to create a rich-media-driven, Web 2.0-enabled website to reach out to its customers. It took the company ten months and almost a million dollars before it launched the first version of its website, which apparently didn't even satisfy the basic usability goals. The firm has large marketing budgets, well-trained project managers, and good intentions on the part of the product owners. What went wrong?

While the product owner team from the marketing division had good intentions for the product and worked hard to prepare a roadmap, the same team had no power to influence key factors needed to define, design, build, and test the product. The tools used for the product definition, development, and testing were not appropriate for the product development work, and the people identified to do the work didn't have the right set of skills. The technology set and team had been "chosen" for the product group by the different business units who look after technology and staffing. These peripheral yet key supporting business units were measured and incentivized on a set of parameters (utilization of the resources including available staff) different from the product owner team (time to market for innovative products). Thus, the assignment of people and other resources to define, design, build, and test the product were not in tandem with the optimum skill set and experience required to get the product quickly to the market.


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