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Introduction
All organizations are facing an unprecedented challenge to be able to deliver new products in what could be a totally different market situation. Business Agility can be one way forward in this uncertain lifetime.
#businessagility #corona #productdevelopent #innovation #manageuncertainty
What is going on?
For years I have been thinking; "Sometime, a pandemic will spread over the world. Maybe not in my lifetime, but sometime it will come. Because it's how nature works."
Suddenly, we are all in the middle of it. Almost everyone is affected. Layoffs, homework, people in quarantine, and all the news. It's just everywhere. Still, I don't know anyone who's got the disease. It all feels so unreal and hard to grasp.
Some say it will be over after the summer, others . Others think the pandemic will last much longer and that a worldwide recession will hit us. Some say the world economy will go Can you imagine an economy rolled back 50 years, but we will still have ? But, with our technology, knowledge, and the suffering environment we didn't have then.
Most pundits agree that Anyhow, our world will be different. We don't know No one knows to what extent, but for sure, it will be different. Whatever happens to our economies, lifestyles, or needs; And whatever happens, the uncertainty is higher than ever before. The question is, what will make the growth wheels spin again.
While many of us are occupied in the current situation, trying to live our lives and also save lives, some need to start planning for the future. Leaders cannot wait to point out the way forward. Just forget to do well-defined plans and product designs. When dealing with this massive uncertainty, building up new knowledge, and adjust is going to be your way forward.
Those who are willing to act now will be rewarded pretty soon because we, because of the pandemic, will see a lot of market changes.
My prediction is that the need for Business agility will even higher after the pandemic. Markets have inevitably changed and many products will not sell. Product Management needs to be innovative solutions. Great products have always been the underlying reason for the success Some times the luck and many times research and innovation The chance of success through cost-saving and production optimization is getting lower. Company leaders need to focus more on building the capability to innovate new products and interact with the market to validate what is flying or not.
We will need much more of, what many companies already are doing. Experimentation and measuring of business results. Don't worry, plenty of companies have been doing it for a while and many tools and techniques are available.
Business agility means an organization that as a whole have the ability to ?
How are organizations doing?
As you know, the case is not that uncertainty was low before Corona. We already had a situation of ever-changing technology and needs, which required fast, adaptable, and creative development.
I'm sure leaders, everywhere on this planet, are struggling with their future. What will attract customers? What margins are feasible? How long will the downturn last? What will make my company survive?
Competition is ruthless, and most companies do not survive as long as expected. Several studies show that the age of companies is decreasing. For leading US companies, the average lifespan is now down to just 15 years, according to Professor Richard Foster from Yale University. I very much doubt that this trend will change.
What to do?
So, how to become healthy and sustained as a company? Hopefully, also, taking care of people and the planet.
Many workplaces are appreciated by their employees and known for creating new innovative products. They experiment, measure business results, figure out why they exist, and much more you can read in best sellers. Did you know there are about 100 new books on Innovation published each month? It looks as there is a way forward.
A popular term is Business Agility, which means that an organization as a whole can adapt according to market and customer needs. CEOs and other top managers cannot continue to delegate work <responsibility for organizational design and change managment> to middle management and functional silo managers.
They must build a flow-based and modularized organization that can act swiftly on market reactions. The time is over when Agile and Lean have been thought of just as an IT-team endeavor. Without upper management engagement, we have observed that for most "traditional" organizations it is a very long Journey
I'm sure leaders, all over the world, are struggling with their portfolios. What could possibly attract customers? Which new market behaviors will we see? How long will the downturn last? What margins are feasible? What will make my company survive?
The time is over when the best way to organize was in functional silos with local responsibility and performance metrics. Whether you are promoting silos or not, your business is operating in valve streams. That is all strategic steps needed from start until some kind of client or user value appears.
It is your choice if you want to build your organization around these value streams or stay in the functional responsibility paradigm. But, take the time to think about your choice now and prepare for the worst.
Some things to remember will be even clearer
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Sunk cost. Just because a lot of work and resources have been put into something, it does not mean it is Valuable.
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It requires considerable work to rebuild an organization for Business Agility, and I can see many leaders who are struggling to succeed. In most cases, a big challenge is to clarify who develops the capability of an organization, versus who creates the products. Typically, Product Managers need to have the authority and attention on products and react swiftly on market feedback and do not have the time to work as a line manager at the same time.
How to rebuild organizations?
If you are a builder of a fantastic organization that will be able to take the edge of the uncertainties served by Corona, I think the following bullet items are the most crucial. They were all very viable before, but have become more critical as uncertainty grows.
Transformational leadership. The world needs Servant leadership, Lead by example, or whatever we call the type of leadership that lets people thrive. A fearless organization can achieve the flexibility required to deliver the best solution. You have to trust people and reward them when they learn by mistakes. Happy people will be the best force in creating the new products needed.
Value streams. If you haven't identified your real value streams and paid them the proper attention before, it is now time. Your current organization is probably not fit to take on the new challenges.
Transformational, servant, or whatever we call leadership that let people thrive. You will need an organization that can innovate and gets the right products out on the market. You need to be open, humble, and rewarding as you point out the visionary direction of your enterprise.
Experimentation is key. There is plenty of knowledge on how to perform Business Experiments. Make sure to clarify business ownership.
Backlog, backlog, and backlog. A great Product Backlog is transparent, contains what we would like to have, and is prioritized based on business value. Most organizations do not have the needed knowledge to create great backlogs. They mix projects, activities, and phrases just as before. Top management needs to understand and show the rest of the organization what a great ball log is. Otherwise, it will not happen. I'm sure I have seen it far too offers.
Small batch sizes <picture on stairs?> Leading to slicing
Queue length <Picture?>
Experts participate in the delivery
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One of the most decelerating factors is when a silo orientated delivery organization cannot deliver as one unit. Most managers do not challenge political hierarchies and take the time to define what happens in their organization. Instead, they continue, as before, with some kind of functional responsibilities. When organized around the value, it is so much clearer what to deliver and focus on the outcomes.
Modularized business architecture. When structures get too complex, it is hard to understand who can take responsibility for business outcomes. The most effective medicine against complexity is modularization, with specific interfaces and business responsibility. Organizational and product architecture goes hand in hand, which makes collaboration between architects and business owners necessary. The purpose of each team, a team of teams, and other units should all be connected. Modularization is an essential enabler for creating Value Streams. Despite all the competent online-tools, I am pretty confident that colocated cohesive teams will differentiate.
Flow. This quote from Don Reinertsen says it all: "Operating a Product Development process near full utilization is an economic disaster." Most organizations, not only the large, are still preparing large projects with predefined solutions years ahead of delivery
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Time is over it will not work!
It will not happen by itself you need to be intentional.
Metrics Revenue and profit growth
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. Then other "resources" are expected to deliver according to plan. Avoiding too much prework is yet another cultural habit that needs plenty of leadership to change. Flow optimization, instead of resource management, will get products out the door.
How successful the adoption of the above items is, depends very much on the approach to implementing them. That is why I also add a fifth item I find crucial.
Incremental implementation. It seems as all transformations are thought of as a one time fix that can be implemented as a big bang. If, for example, a company wants to move into Value Streams. The usual approach is to identify all Value Streams and implement them all at once, instead of identifying just one Value Stream, or a few, and make it work properly before launching any other Value Streams. In the latter approach, there will be time to address Flow, Leadership, Compliance, and many other aspects which build in quality from the start.
The problem is not whether your organization will be able to develop and deliver a solution. From a technical perspective, it is easier solutions are more straightforward to produce than ever before. Today technology is cheaper and more available. The challenge is to figure out which solution will appeal to consumers.will become applicable in, maybe, a market we have not seen before. To manage Market Innovation is the primary capability organizations will need.
I, too, would like to have a world without Corona and all uncertainties. But the reality is pressing on, and I don't think Business Agility is an option anymore; it is a must.
Stay safe,
Mats