Product-Oriented-Teams

Evolving Your Organization toward Enterprise Agility: Are You Making the Right Decisions?

A key enabler for enterprise agility is product-oriented teams that have end-to-end responsibility. Whether the journey to agile is a company-wide initiative or limited to just a small part of the organization, the nucleus of the work always stays within the product teams. Typically, implementing agile methods and tools is the simple part of the equation, with immediate visible change in daily routines and workflows. However, as with all organizational change, achieving sustainable positive long-term results means the organizational culture and mindset of individuals and leaders must evolve, as well.

Changing the way decisions are made can be difficult. Enabling autonomy and end-to-end responsibility for product teams also means management needs to reconsider decision-making authority. In a successful product-oriented enterprise, decision-making must change in two significant ways:

  1. Product teams must be empowered to make decisions.
  2. Just like in interdisciplinary teams, management-level decision-making must be allocated according to functional expertise.

Have you empowered your teams to make decisions?

When an organization embraces product orientation, each team is responsible for a product from end to end, like owners of a startup. The basic concept is simple: By taking responsibility over the full product life cycle – from ideation to development and operations – the team makes decisions that are beneficial to the product, not just for their slice of the value chain. What this ideally means is that all product-relevant decisions are made by the team, a challenge for traditional hierarchical organizations, in which it’s common to have general management dictate or at least influence decisions that should be made at the team level. In a successful product-oriented organization, teams are empowered to make decisions and fulfill their end-to-end responsibility.

This applies not only to the steady state of the product-oriented organization, but also during its setup. It is important to include stakeholders from all levels of the organization during the planning and preparation phases. This ensures support for the new model and reduces the risk of the team being overwhelmed by their new decision-making rights. If they are not ready to make decisions, or do not feel truly empowered to own their success or failure, then they may fall back into the old way of requesting management approval. People-leaders need to be vigilant in pushing decisions back to the team and expressing the new reality: It’s OK to fail, to test, to learn, and to move forward with lessons learned.

In decision-making, do you value functional expertise over hierarchy and status?

In interdisciplinary teams, decision-making power must not fall to one person, such as the team lead or department head. Every team member has a role and, within that role, he or she has the autonomy to make decisions. In scrum-based software development, for example, the scrum master is responsible for decisions concerning how the team works and collaborates. The product owner and technical product owner decide on the product vision and prioritize product development and features. The developers decide how they want to achieve the jointly set development targets. Of course, assigning decision rights according to roles is not limited to scrum teams, but is also applicable for any product-oriented team.

The same principles must apply at the organizational level to achieve alignment between the product teams and the customer for two reasons. First, the required change in mindset and culture needs to happen on all levels of the organization to be successful. Otherwise, there’s significant risk that the team and management won’t be on the same page when making decisions. Second, just as team-level decisions become faster and more efficient by assigning clear roles and responsibilities, the same goes for management decisions. Conversely, the speed gains at the team level can easily be negated by a “general” management approach, in which lengthy discussions and presentations are needed before a decision is made.

This means the team-level roles must have specific functional counterparts in governing bodies to leverage the benefits of team empowerment and faster, role-based decision-making.

What’s in it for the organization?

By combining these two concepts – team empowerment and a focus on functional expertise – the organization’s teams achieve autonomy. Implementing both is a major step toward building a successful product-oriented organization.

Are you making the right decisions? ISG helps enterprises set up a governance and decision-making structure that enables true end-to-end responsibility for product-oriented teams and manage the needed change from within the organization. Contact us to discuss how we can help you.

About the author

Christian Suffel works as a Senior Consultant in ISG Enterprise Agility, enabling clients to successfully provide their services in the agile digital age. This goal is reached by leveraging the necessary skills and competencies and successfully restructuring IT functions. He advises clients in all aspects of the management of complex transformations and multi-sourcing situations.