The basic answer is that the person is Business oriented person that can provide leadership for the team(s). Characteristics include:
Communication and Negotiation: The Product Owner is charged with stakeholder management and communication. The Product Owner must straddle two worlds: The Team world and the customer world. He / she must prioritize the customer’s interests and represent them within the Team. Similarly, he has to represent the Team’s needs within the customer community - a sort of ‘devil’s advocate’ for both the Team and the customer. He /she is articulate.
Knowledgeable and Customer Focused: The Product Owner has extensive industry experience / knowledge of our solutions and deeply understands the voice of the customer. He / she spends a significant amount of time talking to actual users using both informal and structured interviews, focus groups, and conceptual layouts. He / she uses his / her findings to sell the project priorities to senior management and uses the stories to motivate the team.
Respectful of the team and of the process … and properly blunt. He / she does not take things at face value. Instead, he / she engages the team in genuine conversation, treating them as professionals. He / she is unafraid to speak bluntly about his / her frustrations. When it came to matters about this new Agile process, he / she is willing to defer to others (Scrum Masters, external consultants), demonstrating that it is OK to learn.
Makes decisions: When he / she have to decide, they decide. The Product Owner often accepts that there is no “perfect” answer and will make the decisions, the “dirty compromises” required. Once a decision is made he / she will stand up and fight for his decisions and not cave in at the first disgruntled user. Further, Product Owners need to be comfortable making decisions on how to do less, not more. There is a need for this sort of self-confidence and strength of character; it will be tested often when executing a project.
Presence: The Product Owner makes it powerfully clear how important the planning is by being present at every session. He / she re-schedules other meetings, sits in the room or is on video conference with the Team, and does not check e-mails or phone messages during the sessions. In other words, he / she backs his / her words with his / her actions.
“Just ask me.” The Product Owner knows how to marshal resources and is unafraid to break organizational rules when necessary. Every time the team gets hung up on some obstacle, he / she keeps reminding them, “Just ask me for help. Tell me what you need” and will help work the issue.
Focused on the behavior and outcomes he wants and on customer value. Let’s say the Team is excited about the possibility of using some new technology, for example. The Product Owner helps to straighten this out. “When I talked to you, I didn’t talk about a particular technology. So, let’s be clear: I expect that every technical decision you make must support the business value. And I expect you to show me several alternatives, simple to complex.”
Not just another project on his plate. The Product Owner needs to tell the the team that he / she is committed to seeing this project through to completion. He / she is not planning to move on to something else after kicking this off. He committed to the success of the product.
Motivational: The Product Owner engages with the Team in a way that really motivates the team. We want teams that are excited about the work they are doing and this is an important part of the Product Owner’s role.
Works to understand everything that is required to release to product. He / she does not just worry about the new features but is interested in whatever it takes to get the release to the customer. In particular the Product Owner is interested in prioritizing issues appropriately where the Team is telling him / her that they can improve their work process and quality of the product.
Anthropological-attitude: The Product Owner needs to work closely with the customer but there is a nuance with this. The idea here is that the Product Owner must not just hear what the customer says he wants, but also needs to discover what the customer actually wants.
Clarifiers: Great Product Owners are clarifiers, not confusers. They need to be able to take complexity and distill out what really matters.
Wants, and understands, the role: Many organizations assign the role of Product Owner. Many Product Owner become the role without really understanding the role. And as a result, many Product Owners fall back on to their old comfort zone rather than really embrace the role. So, for example, is the Product Owner used to be a supervisor, then they fall back to assigning work to the team rather than collaborate with customers and the Team to really help how to deliver maximal value. So the Product Owner should understand the role and more importantly wants the role.
Note: A lot of this text was developed by reading other web sites but it was done a long time ago and so I have lost the references. If you can provide information on sources I would be happy to attribute.