What is a Business Problem Statement?

A business problem statement is a concise, precise description of a specific issue negatively impacting an organization’s ability to achieve its goals. It helps ensure alignment among stakeholders and Scrum Teams, clarity on the existing problem to be solved and a pathway toward the solution.

Key Components of a Business Problem Statement:

Problem: The problem clearly articulates why a challenge is important for the business to pursue.

Impact: Impact describes the problem's negative effects on the business

Desired Outcome: The desired outcome refers to the experience or goal the customer wishes to achieve, potentially with the help of your product.

Why is a Business Problem Statement Important?

Business problem statements are important for effective product management because they:  

Create Alignment and Collaboration
Alignment is crucial for Scrum Teams and stakeholders to share a common understanding of the problem and work toward the same goal. Crafting a business problem statement together fosters collaboration and enhances transparency.

Provide Focus
A clear and concise business problem statement ensures that Scrum Teams are focused on the most critical issue.

Quantify Success  
Measurement is essential, as it allows Scrum Teams to quantify success and track progress toward defined outcomes. It also allows the teams to make data-informed decisions.

Provides a Foundation for Crafting a Hypothesis
A business problem statement is a foundation for a Scrum Team to develop hypotheses. These hypotheses can be tested through experiments, allowing them to explore potential solutions in an iterative manner.