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Creating an Effective Agile Organisation

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McKinsey's Digital Product Specialist, Daria Kovacevic discses how to create an effective agile organisation through product management leadership. creating and scaling their digital businesses in competitive landscape, bringing product-centric perspective to Digital and Agile Transformations and helping to build digital capabilities.

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Creating an Effective Agile Organisation

  1. 1. Daria Kovacevic Creating effective agile organisations through product management leadership
  2. 2. Agile has been adopted widely across industries for faster delivery Executives surveyed in 2018 who give Agile a high priority1 ~90% Organisations reporting frequent use of Agile approaches2 ~71% Executives satisfied with their organisation’s innovation performance3 ~6% 1 Forbes https://www.forbes.com/sites/stevedenning/2018/08/13/for-agile-its-the-best-and-the-worst-of-times/#1a1c673765f1 2 PMI’s Pulse of the Profession 2017 Report 3 McKinsey Innovation Practice
  3. 3. –Fred Wilson, Union Square Ventures(Kickstarter, Etsy, Twitter, Coinbase) “If you have a super strong engineering team, but a weak or understaffed product team, you will struggle.”
  4. 4. Most often reasons why products and services fail 1. Over engineered §Built the wrong thing 2. Under valued §No pricing strategy 3. Premature Scaling §Investing into scalability before proven product-market fit 4. Opportunity missed §Narrow discovery horizon or slow to pivot 5. Never should have been built §Lack of governance and accountability !
  5. 5. Top 5 learnings for setting up product management teams
  6. 6. Understand and define product management value Helping the organisation understand the added value of end-to-end responsibility of digital products creates alignment 1
  7. 7. Setup KPI driven product management organisation Strong data driven decision making ensures long time success 2
  8. 8. Build cross-functional teams Collaborative cross- functional teams enable end-to-end delivery with a focus towards end- user needs 3
  9. 9. Set specific goals for product teams Focusing your product teams around key deliverables such as market growth or technical performance accelerates value creation 4
  10. 10. Elevate Lead Product Manager as CPO to executive level along with CTO Giving the product organisation a seat on the table anchors product thinking at the heart of the enterprise 5
  11. 11. –Marissa Mayer, Founder of Google’s Associate Product Management Program “Product management really is the fusion between technology, what engineers do – and the business side.”
  12. 12. Core guiding principles of product management emphasises continuous value delivery and agility at scale Search for product- market-fit by testing hypotheses about market needs and opportunity space Build ownership and accountability by continuously aligning all team members on long- term vision and goals Engage with customers obsessively throughout the entire product development life cycle Grow by experimenting on price, business model and customer experience Stage risk and align incentives by using metered funding mechanisms focused on growth
  13. 13. Product management capabilities can be built up systematically Stage 1 - Nursery Stage 2 - Grow & Learn Stage 3 - Rapid Scale Stage 4 - Mature
  14. 14. Stage 1 - Nursery Pilot agile delivery Customer Focus • Introduce customer centric perspectives Agile Operating Structure • Initiate agile transformation for the first time • Create training and coaching plan, since Agile way of work is unfamiliar to most and not practiced widely • Introduce Product Owner role Governance Model • Digital Factory setup with traditional organisations structure still side by side Impact On Org • 2-3 product teams assembled from cross-functional divisions, specifically for the pilot
  15. 15. Early introduction to product management is centred around cross-functional agile delivery Head of Digital Factory Engineer Product Owner Subject Matter Expert Designer Engineer Scrum Master Current organisation is left in place, whilst a special lighthouse initiative (e.g. Digital Factory) is chosen as a vehicle to introduce agile product management Head of the Digital Factory is responsible for the success of the initiative and facilitates new cross-functional way-of-work, product vision, stakeholder management and assists the Product Owners in their decision making Hand-picked team, including a new Product Owner, is assembled from several different functions to form a new cross-functional team. Cross functional teams operate as a unit to ideate, design, build, deliver and test the product with end-users CEO COO, CMO, CTO etcCDO Rationale for change: 
 Slowly introduce cross-functional product management within the company
  16. 16. Stage 2 - Grow & Learn Expand product centricity Customer Focus • Expand Pilot Agile delivery success across end-to-end customer journeys Agile Operating Structure • Introduce Product Manager role • Create understanding for value of Agile Product Management Governance Model • Extend influence of the Digital Factory • Create chapters Impact On Org • 4-8 product teams identified along end-to- end customer journeys or business processes
  17. 17. Multiple cross-functional product teams and product owners replicate and improve on learning from the first stage Rationale for change: 
 Replicate learnings from pilot and Create more customer centric product teams Head of Digital Factory Product Manager CEO COO, CMO, CTO etcCDO Engineer Product Owner Subject Matter Expert Designer Engineer Scrum master Product managers can come from different parts of the organisation, but may need a spike in technology or commercial growth, in addition to a customer centric mindset depending on the nature of product teams they manage Product Managers are introduced as a new role that provides strategic guidance, goals and vision for 1-2 product teams each Much of the current organisation is still operating in the traditional way, but the Digital Factory is growing to include 4-8 cross- functional product teams Scrum Masters can support 2 teams since Agile maturity is rising Chapters start to form across different product teams, where experts of similar skill sets share best practices or discuss technical dependencies with one another in a systematic way
  18. 18. Stage 3 - Rapid Scale Scale operating model Customer Focus • Make user and customer needs the primary driver for ideation and innovation efforts Agile Operating Structure • Prepare all business units to adopt the Agile operating model • Make Product Management critical for continued growth and innovation Governance Model • Create Director / VP or CxO level executive for product management • Form Chapters and Guilds Impact On Org • Most of the organisation, including Finance, Risk and Legal operate in an Agile way
  19. 19. Operating model is replicated across multiple product teams and product managers manage dependencies effectively Rationale for change: 
 Re-structure organisation to become well versed in agile product management CEO VP of Product, Platform VP of Product, Growth VP of Product, Apps Engineer Product Manager CDO Most of the organisation is now re-structured to support product teams, including Finance, Legal and Compliance VPs of Product are identified as a new role and have the position equivalent to SVP or Director, responsible for setting strategic direction of tribes and frequently engaging with tech or marketing senior execs to align on corporate level decisions Tribe Product teams are now clustered into tribes, e.g., one tribe working on mobile applications, another one on desktop applications Agile coach Designer Subject Matter Expert Tribe Product Owner Guilds are forming, where people group according to their interests, e.g., focus on web development Organization of experts of same background starts to be formalized in chapters, with steady exchange of best practices and setting of guidelines Scrum Masters become Agile Coaches and are mostly needed for new teams, can support multiple teams. Matured Agile teams move beyond Scrum COO, CMO, CTO etc
  20. 20. Stage 4 - Mature High performing product org Customer Focus • All findings in research and ideation need to be  backed by an real time experiment to test assumptions before 
 development kicks off Agile Operating Structure • Create cross functional teams that work as truly collaborative units • Foster product management as both strategically and operationally critical Governance Model • Ensure that guilds and chapters are a rich forum for ideas and knowledge sharing Impact On Org • Whole organisation is working in a truly customer and product centric manner
  21. 21. High-performing product organisation across entire business Rationale for change: 
 Fully mature into an agile product management organisation with highly skilled and collaborative Individuals VP of Product, Platform VP of Product, Growth VP of Product, Apps Tribe Chief Product Officer is introduced at the same executive level as the CTO, CMO or COO, and responsible for leading the product-led organisation Product organisation operates as a fully flat organisation and is made of individuals who are highly skilled and highly inter-operable in all aspects of product management Product Managers act as portfolio managers, and in large teams, the role could be split between Lead and Junior Product Owner is no longer a job title and can be assumed by anyone and within a resilient operating system optimised for collaboration for “what matters” Digital Factory label is no longer necessary as the whole company is operating as an agile product organisation to serve customer needs Product Manager COO, CMO, CTO etc Tribe Engineer Designer Engineer Subject Matter Expert CEO CPO
  22. 22. Thank you

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