Disruption. This word has fallen from the headlines because it’s “so 2017.” But not all industries have been disrupted yet. And those that have will likely be disrupted again. Are you ready to respond? Can you keep up with a more nimble company that comes in to steal your market share?
Last week, I watched a talk by a woman who predicts where certain technologies will go and invests accordingly. According to her, analysts are too focused on today. She predicts that blockchain, 3D printing, and eventually robotics, will combine within the next few years to completely disrupt the supply chains of most companies. To me, this means that companies that thought they were relatively immune to overnight disruption could soon be ripe for it.
Another example is the new venture by Amazon, Berkshire Hathaway and JPMorgan Chase aimed at disrupting the Healthcare industry. Many long-term healthcare companies are now merging in an attempt to compete. Will that be enough?
I have the privilege of talking to leaders of many large corporations and organizations to help them determine the next steps to take to be ready for whatever comes their way. No matter the industry, geography, or company size, I have seen five common areas that need to change. I’ll cover three of those five today, and then the remaining two in my next post.
- Invest in the right things
We’ve all heard that 60-80% of products are rarely or never used. Much has been written about whether this Standish Group statistic is fair or representative of reality. However, I have asked many leaders what percentage of products are rarely or never used, and they agree that their products are within this range. A recent study by the Product Development and Management Association (PDMA) showed that 80% of products lose money (perhaps falling into the range of being rarely or never used). For many companies where I have worked, the majority of products were not profitable. A few cash cow product lines supported the rest of the organization. This can be a strategic move as long as you have a plan for how those remaining products will become profitable. If not, you’re wasting precious resources that could be helping youDo you invest in the projects that your loudest executives yell about? Believe it or not, this is the method many companies use to prioritize investments. I have yet to talk to a company where the loudest executive had the most profitable ideas. But I have spoken to many companies where the loudest executive was the one most likely to disrupt the flow of work and negate hard-won efficiencies.Now is the time to rework your strategy processes to make investment decisions based on market data and outcomes. It’s time you ask yourselves the hard questions—and answer them. How much of your current strategy is helping you mitigate disruption? Are you creating anything to disrupt your own market? Should you be?
- Actually work on your strategy
This seems obvious, right? Yet, according to a study by Actuation Consulting, only 37% of Product Managers say their efforts are aligned to business strategy. That means on average, 63% of work is not aligned to strategy even when product managers are involved. How do you compare? Let’s say you are best in class and only 40% of your work isn’t aligned to your strategies. Does that mean 40% of your budget is wasted each year? Wouldn’t you like to know? I talk to many leaders who have no idea what percentage of the work in their organizations is in support of their top strategies. The larger the company, the less data leaders have regarding what is being done, and the higher the risk a more nimble company will capture new opportunities faster.Many companies are spending millions to optimize their continuous integration and continuous delivery processes. Left unchecked, the outcome will be that they can now deliver non-strategic features no one will use much more quickly than before. If you aren’t building the right thing, it doesn’t matter how fast you can build it.How easy would it be for another company to put you out of business in 3–5 years? An increasing number of executives are facing this question. Eight months ago, I met with leaders at a few major healthcare companies and this was their biggest fear. One week later Amazon-Berkshire Hathaway-JP Morgan Chase announced their new business, promising to offer lower cost healthcare. Is your industry next? It takes more than great strategies to stay competitive—your teams have to execute on them.
- Make sure teams understand your strategy
Do the teams executing your strategy understand how their work aligns to your top goals and expected outcomes? If not, they will be much less engaged, quality will decrease and motivation and morale will suffer. Studies have shown that the more fully your teams understand how their own work aligns to strategy and outcomes, the more interested they are in the Unfortunately, many companies we work with have a huge chasm between strategy and execution. They try to fill it with spreadsheets, PowerPoint documents or their PMO. If this sounds familiar, you are not alone.Too many companies have strategies planned for the next 12-18 months and expect Product or Program Managers to somehow magically parse that work into 2-week sprints for the teams. I have never seen this happen without defined and operationalized processes. You need a method to ensure your teams understand how their work directly applies to outcomes and strategy. Review how your company currently links strategy to execution, and the latest market approaches for doing so (SAFe[Symbol], DAD, LeSS, etc.). Then combine practices to best fit your organization. As a leader, it is up to you to make sure the work in your area is valuable, necessary, and that your teams are engaged. Done well, these processes can help create a solid pipeline of data that flows from strategic direction to the execution teams. Throw in a standard Definition of Done and a few best practices and suddenly you have a mechanism to report status back up the pipe as well.
So, ask yourself: are you investing in the right thing(s), truly working on your strategy and making sure teams understand that strategy? If you answered “no” to any of these, it’s time to take a step back and figure out how to change that answer to “yes.” My next post will feature the remaining two steps you need to follow to ensure your company is not left in the dust. Stay tuned!
I encourage you to register for my upcoming webinar, where we’ll discuss each of these points in more detail.