Can one person hold both the Product Owner (PO) and ScrumMaster(SM) role in an Agile team?
TL;DR: No!
It's a question that a lot of companies starting their way through their Agile transformation will ask themselves (and us!). The Scrum team has three specific roles: Product Owner, ScrumMaster, and (most importantly) the Development team. It's clear why the question of combining SM and PO comes up so often - trying to figure out where current roles fit into the new dynamic can be a challenge for an organization, especially if your teams are now smaller and you don't have enough resources to fill the role of an SM and PO for each team.
However, combining these roles is the biggest disservice you can do for your Agile teams. It may seem like a small tweak to the model, but given the functions of the two roles, you are setting up your teams for failure. Let's start with the definitions of these two roles so we can see why that is.
Related: Can Scrum Masters Have Multiple Roles on a Team?
The focus of the Product Owner is on the Product, as you might have guessed by now. According to Scrum Alliance, "The Product Owner defines the what--as in what the product will look like and what features it should contain." The PO is responsible for maintaining the product backlog, and are responsible for communicating with stakeholders internally and externally to identify what the development team is working on. In their day-to-day, they are responsible for creating and prioritizing backlog items and communicating with the team expectations and acceptance of complete work items.
The focus of the Scrum Master is the team. "The Scrum Master helps the Scrum Team perform at their highest level. They also protect the team from both internal and external distractions. Scrum Masters hold the Scrum Team accountable to their working agreements, Scrum values, and to the Scrum framework itself", as defined by Scrum Alliance. Where the PO is focused on What, the SM is focused on Who and How. Arguably, the most important part of this definition is the emphasis on protecting the team. Internal distractions often come in the form of scope creep – new scope being introduced once work has already been committed to. In Scrum this often looks like new stories or bugs being introduced in the middle of a Sprint, and the job of the SM is to prevent this from happening as much as possible.
While I'm sure that we all know that some scope creep is inevitable (unless perhaps you're inhabiting the perfect utopia of business environments, in which case, I'll keep an eye out for my invite), but it can get out of hand quickly if there is no one on the team who is able to push back against the business.
By definition, the role of the Scrum Master is to protect the team from the Product Owner (and the stakeholders that they are representing). Blurring the lines between these two roles mean that there is no one to push back when scope is added last minute, or ensure that the team is sticking to Scrum best practices, despite heavy workloads.
The most common outcomes that we see when these two roles are combined are:
Overall, not great!!
In a perfect world, you should have a single Scrum Master per team, and Product Owner per product. This means that Product Owners can span multiple teams, if the teams are working from the same product backlog, but Scrum Masters are dedicated to a single team. If you don't have enough resources to commit to this model, in the short term, a Scrum Master could potentially span more than one agile team - but I would say no more than 2 - after all, one person can only attend so many Scrum ceremonies while also being available to unblock their teams.
However, the long term success of your Agile transformation means that it's time to start planning to fill those roles. Combining these roles will almost certainly decrease the effectiveness of your move to agile, as your teams are left unprotected and (likely) overworked.
Looking for more information on Scrum best practices? Check out Sprint Planning - How long should sprints be?