The Product Owner is the customer or its proxy. Since this is the case the Product Owner should have final authority on the order of the Product Backlog Items. At any time the Product Owner can move any Product Backlog Item above or below any other Product Backlog Item.
If the Product Owner has this authority, he is able to respond to the changing needs of the customer and the marketplace. If not, he is blocked from being effective and may need approval on all Product Backlog Item decisions which causes waste in time, by the Product Owner, and waste in effort, by the Scrum Team.
Granting the Product Owner this authority is a multi-step process.
First, the Product Owner must have strong knowledge of the product and the market. There is one primary source of correct, up-to-date information about the Product Owner role: the Scrum Guide. The authority of the Product Owner rests on the Scrum framework and their knowledge of the product/business.
The Product Owner then needs direct and explicit approval from their manager, who must be a business person, not a technology or process person, to assert their authority over the Product Backlog. The manager makes that approval known to the Scrum Team and all the product stakeholders; it should not be communicated by the Product Owner or the Scrum Master (although it should be supported by the Scrum Master).
As a third step, the same manager also needs to create a performance objective for the Product Owner to create accountability for the success of the product. This should be a business metric related to financial performance.
Finally, the other members of the Scrum Team, including the Scrum Master, and the immediate product stakeholders, must have their respective managers or leaders create official accountability for following the directive of the Product Owner with respect to the ordering of the Product Backlog Items.
The only limit to this authority is in the executive-level decision to pursue the development of the product or not. Of course, the consequence of not continuing to develop the product is to declare a whole team to be off the job – possibly laid off.
In many organizations, the people who are designated as Product Owners on Scrum Teams often come from a business analysis (BA) background. This usually satisfies the first step in the process of obtaining the necessary authority, but the subsequent steps are difficult for people from this background because they are reporting into the technical side of an organization rather than the business (e.g. marketing, sales, or product management). It is better to start in the Product Owner role from a less knowledgeable position, but reporting into the business rather than technology (e.g. finance, or customer service are better starting places than technology). The path to full authority is much easier.
The Product Owner is the sole person responsible for managing the Product Backlog. — The Scrum Guide
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