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 think the pandemic will last much longer and that a worldwide recession will hit us. Can you imagine an economy rolled back 50 years? But, with our technology, knowledge, and the suffering environment we didn't have then.
Anyhow, our world will be different. No one knows to what extent, but for sure, it will be different. Whatever happens, the uncertainty is higher than ever before. The question is, what will make the growth wheels spin again?
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?
What to do?
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. The 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.
How to become healthy and sustained as a company? Hopefully, also, taking care of people and the planet.
Many appreciated workplaces are creating new innovative products. They experiment, measure business results, figure out why they exist, and much more you can read in best sellers.
A popular term is Business Agility, which means that an organization as a whole can adapt according to market and customer needs. It requires enormous 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 organizational capability, versus who creates the products. Typically, Product Managers need to have the authority to react swiftly on market feedback and do not have the time to work as a line manager at the same time.
What to does it mean in practice
If you are a builder of a fantastic organization that will be able to take the edge of the significant uncertainties served by Corona, I think the following bullet points are the most crucial. They were all very viable before but have become more critical as uncertainty grows.
Transformational leadership. Servant leadership, Lead by example or whatever we call the type of leadership that let 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. One of the most decelerating factors is when a silo orientated delivery organization is cannot deliver as one unit. Most managers do not take the time to dig into what happens in their organization. Instead, they continue, as before, with some kind of functional responsibilities.
Modularized business architecture. When structures get too complicated, 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 great value streams. Despite all the wonderful online-tools, I am pretty confident that colocation cohesive units will differentiate.
Flow. This quote from Don Reinertsen says a lot: "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. Then other "resources" are expected to deliver according to plan. Yet a cultural habit that needs plenty of leadership to change. Probably also managers and leaders who are prepared to roll up the sleeves and start to learn the craftsmanship of queue management, WIP, and backlog slicing.
It is not whether you will be able to develop and deliver a solution. From a technical perspective, it is easier than ever. Today technology is cheaper and more available. The challenge is to figure out which solution will appeal to consumers.
Me too would like to have a world without Corona and plenty of 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
Remember some possibly useful stuff.
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 of companies and other organizations cannot wait to point out the way forward. We need to get going. We have an economy to save!.
Historically demand has gone done after a crisis. The global competition is likely to get more brutal than ever before.
It is not possible to have all the layers, streamlining organization charts and avoid silos and layers that only add administration or control
Eventually, we will come out of these crises. It is going to hurt and many will grief their close ones. But in some way, we will come out.
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.
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.
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.
What is your recipe to manage the competition?
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
In almost all organization I can see an unclear decision order where organizational capability and product delivery are mixed and handled so unclear that not much is coming out. All organizations that want to challenge the competition have to take organizational design and product development flow much more seriously.
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.
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.
Trash
The chance of success through cost-savings and supply-chain/production optimization is getting lower. Instead, company leaders need to focus more on building the capability to innovate, create new products, and interact with the market to validate what is flying or not.
My prediction is, that innovative Product Development will be the key to survival.
Did anyone think about slowing down?
The solution
The art of innovative Product Management, with the development of Lean-Agile mindset and frameworks, has for many years become more and more important. I am so sure this development will accelerate so much more. Since the thing with Lean and Agile is all about taming the uncertainty.
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