Scrum is Agile Leadership – Part 1

How Does the Product Owner Lead?

Submitted by Peter Beck on 01/23/2019
Agile Leadership

The Scrum roles are prototypes for agile leadership and agile management. The Agile Manifesto was formulated in 2001 with contributions from the two authors of the first Scrum publication. Scrum is a framework used to optimise an organisation to become more agile. In addition to a basic understanding of the artefacts and processes required, the framework also divides leadership duties into three roles. Scrum also follows a lean approach based on the idea that less is more. The framework thus only prescribes rules that are absolutely necessary.

The benefit of this is that each organisation can develop a suitable leadership system tailored to its needs within the triangle of Scrum roles. On the downside, it does make the concept of agile leadership somewhat less accessible and means it is often interpreted in very different ways.

To help clarify matters, in this article – the first of four – I will answer the question How does the Product Owner lead? using two companies as examples.

  • A young, fast-growing company with an initial 20 employees.
  • A medium-sized company that has grown to 450 employees over the course of two decades.

Example: Start-up

Ownership is leadership with power.

Our example start-up launched just a few years ago with a handful of staff. The founder and principal owner of the company, which has now grown to 20 employees, is part of a team and works on product development. He recently received additional investment capital to accelerate the company’s growth.

The founder is the leading expert in the company’s specialist area. He is now faced with the challenge of helping his employees become less dependent on his specialist expertise so he can focus fully on his responsibility as the Product Owner. Only then can the company continue to grow.

The new product is expected to take the global market by storm. The opportunities are immense – there are few to no competitors doing anything similar. As the founder and Product Owner, he holds the vision for the product and it is important to feed this back to the teams consistently.

His employees are motivated and capable, but their task is highly complex. They are continuously starting work on new topics. The creative chaos is, ultimately, becoming a frustrating maelstrom. Employees are asking for clear specifications to give them a sense of focus. Our Product Owner needs to work with the teams to find out where the greatest opportunities are. How can we use simple tools and methods to find out whether the new functionality will be a success without putting too much into development?

On the flip side, the decisions made now regarding the product’s architecture could have massive implications – positive or negative – for the company’s growth. This is by far the largest risk that the Product Owner must manage at present.

Example: Medium-sized company

In the case of our medium-sized company, the owners no longer play an active role in company management but do attend the shareholders’ meeting. They delegate the authority to make decisions to a newly appointed CEO. His role is to increase profitability on the one hand and, on the other, to create innovations for the future in order to adapt to the rapidly shifting market situation. The CEO wants to optimise the entire organisation and make it more agile so it can react faster to market changes and continuously improve its processes.

The product is the sum of all interdependent services; the aim is to preserve and increase value for the customer. Services can be delivered in both manual and automated processes.

If we see the company’s product as the sum of all value-adding services, it soon becomes clear that the CEO has the role of the Product Owner. Of course, he can’t lead 450 people directly. Instead, he has to delegate to Area Product Owners. The more streamlined the hierarchy and the more independent the individual product areas, the more agile he can be in his management of the company.

However, that isn’t the case just yet. The organisational structure divides employees into different specialisms. Until now, the employees’ careers and recognition have only been understood within this hierarchy. This has created a greatly oversized system of conventional line management positions. These line managers attempt to optimise work efficiency through further specialisation and cost reductions, such as outsourcing.

In addition, the line managers are pursuing goals that increasingly cancel each other out over time. For example, the Head of Product Management aims to increase sales. To do that, he needs new product functions, which massively increases the pressure on Product Development to develop these functions. This contradicts the goal of Production and Operational departments, which are tasked with ensuring quality and reliability above all.   A leadership system like this attempts to avoid innovations and preserve the status quo. To counteract this, the last CEO installed a professional project management system aimed at introducing innovations across line-management functions. However, even more people in management positions with completely different objectives just made life even harder.

Most frustrated are the few remaining experts who are actually creating value. Their efforts are generally split between 4 or 5 projects at any one time. Burn-out is increasingly common and resignations are on the rise.

The gridlock is clear to see in the company’s project portfolio: there are 120 active projects on the list, but no real progress can be seen in any of them. This list is the company’s Product Backlog. Once the Product Owner has identified the problem, the first thing he needs to do is to strike off 80% of active projects – thereby focusing the organisation on common goals.

Naturally, this is a difficult task for him. Many of the projects have a vast scope and involve slumbering ideas with significant value but also significant risk for the future. It could prove deeply foolish to ignore these. The Product Owner needs to call on the Area Product Owners, who in turn work with teams to reduce the projects into small, deliverable chunks. Following the strategy set down by the PO, these Area POs create a more detailed Product Backlog for the company. It brings together all topics areas, from optimising the organisation on a global scale and initiatives to improve service quality to innovative topics that open up new opportunities.


The product owner leads to decisions with the aim of maximizing value relative to the investment.

The PO achieves this by:

  • Balancing risk and chances
  • Focussing the organisation

The activities within the Product Owner’s remit are not sufficient on their own to lead a company. The Product Owner, the Scrum Master and the Team together form a leadership triangle. This system of leadership differs significantly from the classic matrix system, as this description of the Product Owner’s role makes clear.

Parts 2 and 3 will address how the Scrum Master and the team operate and thus complement the role of the Product Owner to form a stable yet agile leadership system.

Part 2 – How does the Scrum Master lead?

Peter Beck

About the author

Peter Beck

Peter has set himself the task of creating companies that deliver value for their customers and employees. That was also the motivation behind his decision to found DasScrumTeam. Peter is a passionate Scrum Trainer (Certified Scrum Trainer, CST) and consultant with a solid background in engineering. Since 2007, he has trained and advised a wide range of development teams, specialist departments, project managers and those in leadership positions, helping them to apply the Scrum framework, agile planning methods and software engineering practices. Peter is a graduate engineer (Dipl.-Ing, TU) specialising in electrical engineering and information technology.

  • Experience with Scrum since 2004 as Team member, Scrum Master, Product Owner, Coach and Trainer.
  • Served as ScrumMaster in internationally distributed Scrum Teams
  • Co-founder and Product Owner at DasScrumTeam AG
  • Key interests: Agile companies and Scrum beyond Software

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