Underestimating the importance of this role could make or break your operating model transformation: here’s how to think about sourcing the role that will only increase in importance.
This article was originally published on CIO.com by Michael Bertha, Partner at Metis Strategy and Kira Kessel, Associate at Metis Strategy
You’ve seen the virtues of transforming from a project to a product operating model: value-driven work, delivered by dedicated teams rather than through projects led by disparate team members.
But as you embark on this transformation, you’ll have to remember one thing: you can’t do it without a product owner. The strategist, the technical expert, the business savvy leader—those with all three commonly called unicorns, or rock stars—is a person not easy to find.
Product owners are the linchpin of the product operating model; on product teams, a bad engineer is one bad apple, but a bad PO can sour the whole batch. No one else has the end-to-end accountability for a product like the product owner does. No one else so consistently represents customer interests, pushes engineers to adopt DevOps and Agile methodologies, and corrals individuals to execute against a roadmap. This is a leader who thinks of technical features in one conversation and business strategy in the next. The unicorn, if not sourced with proper due diligence, will be viewed only as a creature in fairy tales.
In a traditional project model, a leader is judged based on how well they react to requests and executes on them. In a product model, however, a good product owner anticipates the customer needs and responds to them by prioritizing items on a roadmap based on the capacity of a product team.
Product owners move you from reactive to proactive.
Adopting the product model is no meager mind-shift. Broadly speaking, you have two main options: hiring or upskilling.
You might hire for either of two reasons. The first is that you may not have the luxury of time and mistakes. This is largely a matter of two things: culture and industry.
Let’s start with culture. Ask the following of your company: Is learning tolerated? Is training available? Are there resources you can use to help establish the person in their role? Is there strong leadership and mentorship? Without these variables at play it will be difficult to develop someone internally. You might need someone who has the core PO competencies and fits your culture, someone who perhaps already has the leadership chops you’re lacking—a necessary hire.
Then there’s industry. Also unable to afford time or mistakes are those industries that are heavily regulated, scrutinized by agencies and governments, or uniquely depended upon by their customers. If, for example, you work in medical, military, aviation, and so on, you may not want to risk upskilling when you need someone who can navigate complexities beyond just those inherent to a product owner’s role. These product owners will have to consider certain variables—safety, cybersecurity, geopolitical factors, and many others—that require extra attention when representing the voice of the customer.
Say you’re a technology executive at a biopharma company. Your product owner will not only need to drive innovation—putting the most promising features at the top of the backlog—but will also need to do this while adhering to regulatory constraints. For Shobie Ramakrishnan, Chief Digital and Technology Officer at GlaxoSmithKline, this looks like balancing core values like “accountable for impact” with the pursuit of AI/ML technologies to “supercharge” R&D and clinical trials.
Luxury and time, of course, is only one of the reasons you might hire. The other is that you want a fresh perspective. In particular, someone who offers a point of view you can’t train. Usually that someone comes with a mixed bag of experience: a background in product, engineering, marketing, and finance are most common. What matters is that they offer something new to your company. A leader like this may disrupt the status quo, bring innovation, and offer new ways of thinking about the same problem. They may even serve as a catalyst for change beyond your recent move to the product model.
But could you not solve these issues—the constraints of luxury and time and the desire for a fresh perspective—by outsourcing? Your contractor may not cost as much, but you may face bigger drawbacks. A contractor who doesn’t stick around will take with them the skills and experience you want an employee to share with colleagues so that expertise, new ideas, and growth of the company reinforce one another from within.
In contrast, when you retain someone full time, especially a product owner, you retain institutional knowledge, which is especially valuable when it concerns strategic areas like GenAI, data, cyber and other innovation—areas of central concern to the product owner. A good example of this comes from Zurich North America’s COO Berry Perkins, who has made it part of IT strategy to keep this type of knowledge in-house. Of course, that’s not the only part of the strategy—it also involved the establishment of nearshore competency centers that will depend on Zurich’s employees acquiring new skills and embracing new processes and technologies. Which brings us to upskilling.
You may have a unicorn in your backyard without even knowing it.
What can distract you from that realization? Budget. If it prevents you from hiring, then you may next consider whether you have the funds, and the bandwidth, to pursue training your soon-to-be product owner.
Investing in your training muscle—developing a training capability, establishing career coaching, and encouraging growth from within in other forms and fashions—could do more than just produce the perfect product owner. It will signal to your employees that you want them to stay, that their contributions matter, and that there is space for them to grow internally. Retention could soar, innovation may spike, and revenue would, inevitably, grow.
If training isn’t on the agenda, you may decide to pursue upskilling simply because your employees hold something valuable already: their relationships and their institutional knowledge. The high-performing product owner will have already built relationships with their colleagues, will know the dynamics that exist between teams, will understand the technologies used, and will be better equipped to align IT and business stakeholders. Most importantly, they will have established trust.
Perhaps not even trust is the most important thing. What could be? Institutional knowledge, which, as we’ve seen, an existing employee will already have. They will know the tools, know the processes (which they’ve seen are convoluted at times), and know the customers of the company they are serving (and can speak to the company’s competitive differentiation, not just industry norms). Best of all, they know the product—its thorns, buds, and roses.
Believing in the value of the product operating model is one thing. It’s another to embrace the transformation from project to product with eyes wide open. You should acknowledge the challenges you will encounter, most notably that this one role could make or break the transformation. So before you’re too far into the journey, remind yourself: if you don’t know who your product owner is, at least understand what will dictate whether you hire, contract, or upskill. Better to figure it out now, not later.
How leaders can drive the coveted project-to-product transformation
This article was originally published on CIO.com by Chris Davis, Partner at Metis Strategy, and Kelley Dougherty, Associate at Metis Strategy.
In this time of fluid markets, fierce competition, and constant disruption, the modern enterprise must stay innovative and agile. It must be ready to evolve at any moment, and deliver quickly, consistently, and reliably through its large-scale software operations.
But it can hardly do so through traditional, monolithic ways of working, particularly those organized around projects. Many companies are therefore reorienting their operating models around end-to-end products. Done well, these transformations make a company nimble. Done poorly, they exhaust the organization and produce little value.
Leaders must transform their organizations methodically along a path that minimizes redundancies, builds momentum, and creates immediate and tangible business value. In this article, we outline the steps to start a product operating model journey, coloring the steps with stories told on the Metis Strategy Podcast by executives from companies like Ascension, Condé Nast, and Hyatt.
First, leaders must identify the products around which their operating model will be designed. We define a “product” in this context as:
“a capability or portion of a capability, brought to life through technology, business process, and customer experience, with a continuous value stream, and an ability to measure success independently.”
Therefore, leaders should draw the capability map of their business, showing how value streams and assets are positioned, how they relate to each other, and which of them are immature or missing. These capabilities can then be translated into end-to-end products calibrating for the organization’s size, offerings, and business model.
If an organization has uniform customer offerings and go-to-market motions, then its products should be aligned to the company’s value chain. Such is the case at Ascension, as explained by its Chief Marketing and Digital Experience Officer, Raj Mohan: “We’ve organized our teams particularly broken up by the consumer journey into product teams down that path, and then staff those teams along those journeys itself.”
In practice, products aligned to a customer-facing value-chain might include: Development → Marketing → Sales/Order Management → Fulfillment → Customer Success
Aligned to internal value streams, they might include Financial management, HR management, Legal Management, IT Management, Facilities Management, and Data and Analytics.
In contrast, if an organization has multiple business units, offerings, or go-to-market processes, its products must be defined so they account for each BU’s customers, geographies, and so on. This way, products can still be aligned to value chains but also arranged into broader groups, lines, and teams, each constituting a “deeper” aspect of the value chain.
This is how products have been defined at Condé Nast.
Sanjay Bhakta, Chief Product and Technology Officer at Condé Nast explains that his organization’s product offerings result in them having “some capability within the brands, especially the big brands, that focus on things that may be bespoke or have specific requirements.”
Next, leaders must define the capabilities around which they’ll organize resources and configure the product teams such that they can deliver value autonomously. Mohan suggests that a product team can stand on its own “if, over at least a three-year horizon, you can see clearly that a durable team can bring value that you can sign up for.”
How many product teams should you have? As a rule of thumb: about one tenth as many employees as there are in the organization. Ideally, each product team should comprise seven to nine people, and they should include a product manager, scrum lead, technical lead, and engineers. These might be supplemented by user experience leads for consumer products, other engineers, shared services, or specialists.
A project-to-product transformation requires that an enterprise think first in terms of products, and this shift hangs on the structures and processes by which the company manages its portfolio. A company should organize its portfolio around the outcomes it seeks, and those should in turn dictate the capabilities initially staffed to mature at a higher rate. When resources are limited, start by productizing 2-5 key areas, do it well, and scale from there.
Hyatt, for example, has organized its portfolio around customer-focused capabilities, and so has caused the enterprise at large to think in terms of customer outcomes. As Hyatt’s Global CIO, Eben Hewitt, has explained: “Moving to a product mindset, to me, means, number one, it’s for a customer… You’re thinking about the outcomes that people want.”
Further, an organization will do well to manage its portfolio according to Agile principles and to align its product teams to business outcomes. Not only will product teams then naturally align to each other and their shared objectives; the organization itself will think in terms of products and outcomes.
To manage portfolio by capabilities, use annual planning sessions to craft roadmaps aligned to outcomes and segmented by capability. Such roadmaps can then inform the teams who support those capabilities, and ensure their own roadmaps align to enterprise objectives. These planning sessions also give leaders a chance to decide how to allocate funds. As a rule, the product teams should receive roughly 80% of the organization’s budget, and that allocation should cover their needs end to end to build and manage the lifecycle of the product. The remaining 20% should go toward broader initiatives.
Adopting an Agile mindset and common ways of working early in the journey will help reorient a company reliant on waterfall, project-based operating models towards continuously delivering value. However, frameworks such as Scrum and Kanban are a means to an end. Some organizations conflate a “product” transformation with an “Agile transformation,” and lose themselves in the minutia of adhering to specific ‘rules’ and ceremonies. The key is to create a baseline for teams to form, storm, and norm by reducing confusion of how to transition from a rigid waterfall process to a mindset in which an entire agile product team establishes a shared identity founded in the problem the product solves; not their title or role on a waterfall assembly line.
Bhakta emphasizes that Agile should extend to the relationship between product and engineering. He explains: “[It] helps us do faster decision-making, helps us to get products out into the market faster.”
If organizations are already practicing Agile when they start transforming, then they should focus on infusing into their processes the product mindset. If an organization isn’t so mature, however, then it should train teams on core Agile practices to which they can align their processes.
Ultimately, this transformation largely depends on whether people can successfully serve the role as a Product Manager, and balance the business value, viability, usability, and feasibility to focus teams on shipping products and experiences that users love, adopt, and help improve with feedback.
Therefore, each team needs a Product Manager, who can:
Identifying, training, and upskilling Product Managers, especially for internal products, is often the hardest part of the journey. But to be successful, Product Managers must also have clear scopes of responsibility, the power to execute on them, and feedback loops by which they can measure performance and course-correct.
Each of the steps we’ve covered critically enable teams to scale, and once they’ve been carried out the first time, they tend to act as a flywheel, sustaining themselves with their own momentum and creating excitement within the organization to productize more capabilities.
To gauge success of your product operating model journey, start by:
The journey of maturing a product team is never really complete. Once the teams are launched with the steps outlined in this article, leaders should then do the following at scale, working team by team:
It is our firm belief that adopting a product operating model is the only way to successfully support a scaling organization. But don’t take it lightly; this is a commitment that requires leaders to dedicate at least a year of their time to successfully transform an organization’s mindset.
Thank you to all who attended the 10th Metis Strategy Digital Symposium. Across conversations, leaders emphasized the need for foundational data and analytics capabilities to prepare their organizations for growth. Whether modernizing systems, designing new operating models, or upskilling teams for the future, an organization’s ability to appropriately harness the information assets available continues to be a key source of competitive advantage. Below are highlights from the event. Stay tuned to the Metis Strategy YouTube channel and Technovation podcast in the coming weeks for full recordings of individual panel discussions. In the meantime, click here to request an invitation for our next virtual event on December 13, 2022.
To prepare employees for jobs of the future, technology leaders are focusing on upskilling and development initiatives that teach employees the latest technology skills while providing a clear path for professional growth. The most in-demand skill today: “data, data, data,” said Udacity CEO Gabe Dalporto. ”Every part of every organization needs better data skills.” That means not only equipping data scientists and IT teams with the latest skills, but also ensuring data literacy across marketing, compliance, cybersecurity, and beyond.
It isn’t enough to only provide training, however. Dalporto noted that attrition can actually increase if reskilling programs aren’t directly linked to individuals’ jobs and career paths. The message resonated with attendees, 44% of whom noted career pathing and other growth opportunities as focus areas within their upskilling initiatives.
Pearson CIO Marykay Wells reiterated the importance of creating an environment that encourages continuous development. Pearson offers weekly learning hours and a range of certifications employees can pursue to help spark new ideas and creative thinking. The company is also leaning into greater job mobility, encouraging team members to apply their learnings across the organization.
A strong foundation in data and analytics paves the way for new innovations. As organizations modernize enterprise data platforms and gain access to consistently reliable information, they are finding new ways to use emerging technologies to improve processes and services.
At Boeing, data is embedded across the enterprise and serves as a source of growth and resilience, CIO and SVP of IT & Data Analytics Susan Doniz said. Data-driven insights give the company a greater understanding of supplier networks, assist with product planning, and drive sustainability initiatives. Boeing is using emerging technologies like digital twins and the metaverse to drive product precision, building airplanes thousands of times digitally before creating the physical plane. Boeing also combines its own information with weather data and other external sources to drive additional value. “The value of data is not just data by itself, it’s how you combine data with external data,” Doniz said.
Emerging technologies have also shown promise in driving enterprise sustainability efforts. As Chevron Chief Digital Officer Frank Cassulo prepares for the transition to a lower carbon world and more renewable energy sources, he is advancing the deployment of industrial IoT, edge-based sensors, and real-time monitoring to improve the efficiency, reliability, and safety of the energy system. “We believe the intersection of technology and the energy transition is defining the rate at which we advance,” he said. Last year, the company launched Chevron New Energies to identify new technology opportunities and business models to deliver a lower carbon future.
Technology leaders are embracing more data-driven decision making processes and rethinking how to measure the success of digital products and services.
For example, every Monday morning, Vinod Bidarkoppa, SVP at Walmart and Chief Technology Officer at Sam’s Club, meets with the executive leadership team to discuss the Net Promoter Score of critical member and associate journeys from the prior week. Those metrics inform how the organization operates and focuses their efforts week to week. “Because there is data behind it, people can answer in a very data- driven way,” Bidarkoppa said. “It makes it a very rich conversation and it’s not just an opinion.”
Enterprises are also expressing a growing desire for reliable cybersecurity metrics. Orion Hindawi, Co-Founder and CEO at Tanium, detailed how the company is helping customers understand how their progress on particular KPIs compares to others in their industry. That data allows customers to better see where they have adequate protection or gaps that need filling.
Data-enabled products are also unlocking new efficiencies. Ameren Chief Digital Information Officer Bhavani Amirthalingam noted that putting more data into customers’ hands gives them more choice and control in managing their energy consumption. Greater accessibility to data also gives Ameren the ability to effectively track and reduce energy consumption in the data center and among key suppliers.
As Pearson offers a broader range of digital education products, it is placing additional focus on metrics such as time to value (the time between a student enrolling and actually starting a course), as well as internal productivity metrics to guide process improvements for engineers. “We are thinking about ways we can use data to improve experience and value,” Wells said.
In an increasingly complex economic and geopolitical climate, digital leaders are among those re-examining global talent footprints and seeking opportunities to streamline or automate existing processes. More than half of MSDS respondents noted that they are bringing on more full-time employees across geographies and exploring new locations for talent.
Denton’s, the largest law firm in the world, has grown from 3,500 employees 10 years ago to 20,000 employees around the world today through robust M&A activity. Over the years, each entity retained IT teams, structures, and systems. As cloud computing adoption expanded and cybersecurity concerns became paramount, especially for clients, Global CIO Ash Banerjee and his team are transforming and unifying the technology function, progressing the firm’s growth and integration strategies while seeking to balance local and global needs.
Anil Bhatt, Global CIO at Elevance Health (formerly known as Anthem) works to make sure that his global product team and engineer teams have the capabilities they need to meet business needs. At the same time, he’s focused on making sure team members are taking care of themselves. Bhatt’s team led two employee-focused transformations and introduced more flexibility and recognition. “As you take care of associates and employees, it changes how they look at company,” he said.
As the security and privacy landscape grows more complex, technology leaders must balance global rules and standards with country- or region-specific regulations. Kevin Stine, Chief of the Applied Cybersecurity Division for NIST’s Information Technology Laboratory (ITL), has been encouraged by an uptick of international governments and businesses adopting and engaging with the NIST framework. He notes this global alignment of standards as a critical step to aligning key cybersecurity outcomes and avoiding duplication or conflicting expectations.
As data-based decision making and digital tools pervade modern business, technology leaders are modernizing organizational architectures to help their companies more directly tie technology initiatives to business growth. At retailer Dollar General, CIO Carman Wenkoff prioritized people and processes in the modernization journey. After evaluating organizational structures and existing ways of working, the company grouped 105 technology domains into categories and assigned domain leaders to define and implement a future vision. The new structure is helping the retailer define new ways of working and find new ways to serve customers.
The prevalence of technology is putting more leaders on the path from CIO to CEO, COO, and other business leadership roles in the C-suite. Chandra Dhandapani; Chief Executive Officer for Global Workplace Solutions at real estate firm CBRE advised technology leaders wishing to ascend to other roles to stay closely aligned with business leaders, invest in technology closely aligned with business strategy, move fast, and care about customer experience. She encouraged leaders to take an outside-in perspective and “internalize being business leaders first who happen to have expertise in technology.” Dhandapani believes that CIOs are well positioned to take on additional leadership roles as they understand their organization’s data strengths and weaknesses and know how to use data to develop key insights.
From inflation to the war in Ukraine and the ongoing effects of COVID-19, a perfect storm of economic, social, and geopolitical disruptions has increased uncertainty for business leaders. Building on research and insights from technology executives across industries, Metis Strategy has identified five actions leaders can take to navigate that uncertainty in the months ahead:
Recent downgrades to economic forecasts suggest an economic decline is on the way (indeed, some argue that it has already begun). In July, the International Monetary Fund released an updated global economic outlook which forecasted growth to slow to 3.2% in 2022, down an additional 0.4% from its April forecast and sitting at just above half of the 6.1% growth from 2021. The IMF cited the war in Ukraine, supply chain disruptions, and tighter monetary policy among the key drivers behind the decline. In the U.S., inflation continues to rise, recently surpassing 9% to reach a 40-year high. Additionally, interest rate hikes to tame inflation are already underway by the U.S. Federal Reserve. With so many economic factors at play, uncertainty will be the only constant for the time being. As such, contingency planning and risk management in decision making will be vital to long-term success.
Multi-scenario planning allows decision makers to identify potential outcomes and the likely predictors of each to ensure that the organization is ready to act quickly no matter what comes to pass. Companies must not place too much emphasis on small data variations, as this course of action will not necessarily yield the best results given the array of factors at play. Rather than try to predict or plan for each incremental interest rate hike, for example, leaders instead should prepare for a combination of possible economic conditions: inflation and a recession, inflation and economic growth, stagflation, and so on.
By pursuing macro-level planning for multiple scenarios, organizations will better be able to see the shifting landscape and make timely adjustments rather than wavering due to “paralysis by analysis.”
New work models demand new infrastructure. That sentiment has never been as profound as it was over the past two and a half years as CIOs facilitated a massive shift to remote work. Today, those CIOs face a mandate to enable productive work in a hybrid environment.
As hybrid work models become the norm, it is time for CIOs to focus once again on their organization’s long-term agenda. Corporations know that the pace of change in technology has never been as quick as it is today, and at the same time will never be this slow again. With over 70% of organizations pursuing a flexible or hybrid work model, companies must invest in infrastructure, training, and culture to provide teams with the tools they need and ensure a strong and collaborative environment across more flexible work models.
That requires giving people the tools and skills they need to navigate the uncertainty that lies ahead. Upskilling and reskilling programs are some of the most prominent ways to do this. A LinkedIn study found that 94% of employees would stay longer at a company that invests in their learning. This has manifested itself in many ways at insurance giant MetLife, which launched a digital academy for employees to develop technically. The company has also worked to foster a culture in which employees feel empowered to achieve their career aspirations, Bill Pappas, MetLife’s Head of Technology and Operations, said in a recent episode of the Technovation podcast. Part of developing a strong hybrid model includes investing in the necessary tools, from collaboration platforms to cloud infrastructure, that enable teams to work productively from wherever they are.
Every organization must define its own version of a sustainable work model, including how to attract and retain employees, and how to nurture the desired culture. As old work operating models are redefined and new ones are implemented, investments in people and infrastructure that enable digital dexterity, paired with an increased focus on cultivating culture, will be key differentiators for organizations’ long-term success.
Supply chain challenges brought on by COVID-19 and the war in Ukraine, among other factors, have exposed the fragility of global trade networks, which have seen relatively little disruption over the past 30 years. The global economy’s reliance on Ukraine and Russia for crucial commodities such as oil, wheat, and neon (used in chip manufacturing) has hurt national economies and small businesses alike. The war also has disrupted both air cargo routes and sea shipments, driving up wait times and prices. Trade restrictions (such as sanctions and tariffs) and weakening trust between countries further compound those challenges. Increasingly, companies are questioning whether global supply chains will be as beneficial as it has been in the past.
Consequently, executives are re-assessing the viability of relationships with suppliers both foreign and domestic. Decision-makers may benefit from diversifying their supplier portfolios, possibly favoring those that are more geographically proximate and located in more politically stable countries to further help prepare and protect against future disruptions. Companies such as Intel and General Motors, for example, are building new manufacturing capabilities within the U.S. to decrease their dependency on suppliers in Asia. However, the decision to regionalize varies widely across organizations and industries, and many economists, academics, and executives are speculating about what the next decade holds. Professor Willy C. Shih of Harvard Business School argues that regional supply chain blocs may be the future of international trade as organizations emphasize safer and more stable routes. Others contend the benefits of a global supply chain (i.e. reduced costs), will regain value and that a “transformational shift from global to regional business” is unlikely. The common factor across both theories (and many others) is that significant instability is likely to endure. That makes building supply chains with sufficient flexibility of paramount importance. Technology offers several avenues to achieve this.
Many organizations are turning to digital tools to boost supply chain resilience and transparency. Companies can leverage artificial intelligence and machine learning to carry out risk analysis of supply chain patterns in real-time. Autonomous planning, for example, allows organizations to increase supply chain efficiency and decrease necessary human involvement. Enterprise resource planning upgrades and advanced track-and-trace solutions also offer more visibility into the movement of goods and can help mitigate risk. Furthermore, emerging technologies such as blockchain, autonomous mobile robots, and 3D printing may offer additional benefits from the warehouse floor to a product’s final destination.
Cybersecurity remains a priority for all members of the executive suite. Last year saw a record number of data compromises, up 68% from 2020 with an average cost of a staggering $4.24 million per breach. Roughly 65% of respondents in Foundry’s 2022 State of The CIO study said current socioeconomic pressures have further boosted the importance of increasing cybersecurity, and cyber has been noted as the CEO’s top priority for IT in 2022.
The increasing volume of digital interactions has led to a dramatic rise in the likelihood of breaches and the cost of protection. Facing a threat landscape that is evolving faster than ever, organizations should act quickly to re-evaluate company polices, assess risk management strategy, and bolster both internal and external security practices. This requires a mindset shift in how security is viewed. Traditionally viewed purely as a cost center, organizations must view cybersecurity as a critical piece of the enterprise risk mitigation strategy. Today, businesses must continuously update their cybersecurity practices to reduce the risk of becoming a target and ensure they can respond quickly if or when they face an attack.
Technology leaders should communicate clearly to C-level peers and boards about how risk is being managed. At the same time, it’s important to continue developing strong cybersecurity hygiene at all levels of the organization and to disincentivize unsafe behaviors. Security policies should be evaluated and updated regularly to ensure that they are keeping up with changing times. Regardless of what specific technologies an organization pursues, it must accompany the mindset shift to cybersecurity ultimately as a risk mitigator and cost saver, rather than just a cost center.
Environment, social, and governance initiatives (ESG) have been on the rise for the past several years. Individuals are becoming increasingly concerned not only with working for a company that is actively pursuing ESG initiatives, but also in purchasing from one. This trend shows no signs of slowing down.
It is critical that organizations clearly communicate actions and results of ESG efforts to the public. Historically, however, ESG goals have not always had clear or easily obtainable data and metrics. Technology is making that job easier. Connected devices, for example, can conduct remote diagnostics of buildings, enabling “smart buildings” and helping to minimize their carbon footprint. CIOs can lead the charge on ESG initiatives by identifying key results that IT can deliver, weaving ESG into an organization’s broader digital strategy, and rallying support across the organization to ensure progress on ESG initiatives is fully realized.
The global business environment is in a period of transition. Leaders must use this time to ensure their organizations can respond in a nimble fashion to unexpected changes and not only survive, but thrive, no matter what the future holds. This requires a holistic look across people, process, technology, ecosystems, and strategy and, in many cases, willingness across the enterprise to transform operating models and ditch traditional ways of working. Technology leaders can be at the forefront of this shift, pairing their expertise in digital with a focus on operational excellence to drive sustainable change across the enterprise.
Matthew Schmidt contributed to this article.
At the beginning of 2021, Metis Strategy highlighted key areas of focus for the future of work. The environment has evolved significantly since then, and indeed continues to change, as organizations navigate major shifts in economic and workforce dynamics. At the heart of many discussions has been a company’s most valuable asset: it’s people. Amid a fast-changing business landscape, we have seen a renewed focus on employee health and wellness, re-thinking talent strategies, and enabling productivity in a hybrid work environment.
While it remains uncertain how 2022 will unfold, one thing is clear: organizations must be nimble in order to respond effectively to whatever change is coming. Technology leaders are well positioned to be a catalyst for this enterprise agility. Almost 75% of attendees at the December Metis Strategy Digital Symposium noted that creating a culture that embraces uncertainty and has the ability to pivot quickly would have significant business impact over the next six to 12 months.
As organizations look ahead to an uncertain 2022, technology leaders will continue to drive agility while placing additional emphasis on talent and employee experience. In an era of unprecedented change, an iterative, test-and-learn approach will be key. Below are a few areas of focus:
Health and wellness continue to guide return-to-office plans
When we wrote our first article in early 2021, vaccines were not yet approved and there was little knowledge of the variants that extended the health crisis. Amid continued uncertainty about the path of the pandemic, health and wellness considerations still take priority while planning for the future.
Many companies have pushed back return-to-office timelines to minimize health and safety risks. According to a survey conducted by Gartner, over two-thirds of organizations have pushed back their return to office dates, including Google, Apple, and Ford. Some companies have opted to go completely remote, while others have announced they plan to return workforces to the office when it is safe to do so. Across all of these examples is a growing embrace of flexibility as companies discover and adapt to new ways of working.
No matter their return-to-office philosophy, leaders must remain up to date on new developments and recommendations from health officials while maintaining regular and open communication with employees about expectations moving forward. Firms that embrace agility will be able to flex quickly and communicate clearly when the unexpected occurs.
Organizations broaden their horizons for talent
Across industries and job functions, competition for top talent continues to grow. As a result of “The Great Resignation” or “Great Reshuffle,” companies have seen a shift in the makeup of their workforces, with more than 20 million people leaving their roles in the second half of 2021 alone. With an estimated 65% of employees actively looking for new opportunities, the competition to attract and retain talent has never been higher, giving leaders an even stronger imperative to find and retain the best people.
Organizational agility is the common thread among companies that have found success. During a recent event, Asurion CIO Casey Santos explained that her team is connecting to the talent market by emphasizing the strength of their culture and technology, becoming more flexible, and relying on less formal recruiting techniques.
Ralph Loura, the CIO of Lumentum, highlighted the need to focus on engagement and “think of people as people.” Roughly 35% of CIOs at the December Metis Strategy Digital Symposium chose reskilling or upskilling as their talent development priority in 2022, followed by enhancing the employee experience. In addition to attracting new talent, finding new and creative ways to engage existing colleagues can contribute to organizations’ success within the dynamic talent market.
Loura also noted that the war for talent is no longer based primarily on geography. Seeking people in different locations or creating positions that allow for permanent remote work can broaden the talent pool.
A new era of flexible work brings new opportunities for talent recruitment and development, but it is not without its challenges. Many leaders continue to grapple with the best ways to build and reinforce a cohesive culture when teammates have few opportunities to collaborate in a single space. As organizations continue to adjust their talent strategies and allow for greater flexibility, expect a renewed focus on culture building and employee development.
Taking an iterative approach to find the optimal hybrid model
In addition to building a cohesive culture in a hybrid environment, organizations must also find new ways to promote productivity and ensure teams are able to collaborate effectively. Doing so starts with providing an effective operating model.
Organizations should take an iterative, test-and-learn approach to find the model that best meets the needs of the business and its stakeholders. Some organizations are sampling the four-day work week, piloting meeting-free days, or encouraging flexible hours in an effort to increase flexibility and productivity. There have been few definitive lessons from these experiments as yet, and approaches vary based on the company implementing them. Nevertheless, this nimble approach allows teams to quickly test new frameworks and find the appropriate balance.
New collaboration models continue to evolve as well, particularly as organizations test a mix of remote and in-office teams. Providing an environment that fosters collaboration between in-person and remote employees is key to ensuring success in hybrid environments.
Agile has become the most prevalent software development methodology, with 95% of companies noting they use Agile in some form, according to the latest State of Agile report. As Agile enters its third decade, it is not a question of whether to use Agile, but which flavor of Agile to use.
In our work with companies of all sizes over the years, we have found that while many organizations purport to “do Agile,” they do not necessarily deliver the higher quality, appropriately prioritized software that Agile promises.
Cultural barriers and organizational misalignment often get in the way of realizing the true value of Agile. Indeed, respondents to the survey above cited resistance to change, lack of leadership participation, and organizational culture at odds with Agile values among the top challenges to adopting Agile practices.
In this article, we will provide a brief overview of the Agile methodology and discuss five characteristics that have helped leaders address common challenges and realize greater value from their Agile implementations.
Why Agile?
Agile methodology prioritizes delivering software in an incremental and iterative way. The way we define Agile today has its roots in 2001, when a group of software practitioners formulated the Agile Manifesto. Unlike prior approaches, in which software was developed in silos with little input from customers or business partners, Agile methodology prioritized an iterative development process that emphasized collaboration and adaptability.
Why do so many organizations choose Agile? Those familiar with linear “waterfall” software development lifecycles will remember how slow, counterintuitive, and frustrating it could be to complete a project. Project managers spent most of their time making plans and adjusting them daily, while engineers found themselves torn between actually developing software and re-estimating months of work based on changing requirements. Users were rarely happy with the end product, and despite lots of negotiation it rarely felt like anyone was “winning.”
While waterfall development has a role to play in some IT projects, much of the corporate world has embraced Agile to jump-start software development and delivery efforts. When implemented well, Agile can lead to high-quality software delivered frequently and built with the end-user in mind.
In our work with Agile teams across large companies, we have observed the following five characteristics of successful implementations:
1. Executive buy-in and commitment
Any organization that wants to start on an Agile path or improve its existing Agile practice must begin with a real commitment from executive leadership. For an Agile initiative to be successful, leaders need to possess the Agile mindset and be determined to lead and support their employees through the transition.
Most organizations that fail at their Agile initiatives miss this first step. We frequently see that leaders fall at two extreme ends of the spectrum: they are either micromanagers or they are absent. The best Agile leaders, on the other hand, give teams the autonomy to do their work while removing roadblocks and acting as a guide to ensure that goals are clear and the work contributes to the broader vision. Effective Agile leaders allow their employees to fail while creating mechanisms to learn from failures so that they are not repeated.
We see most successful implementations of Agile in organizations where leaders guide and inspire, establish the right framework, and empower their teams to do their best work. Leaders do this best by listening to their teams and trusting their judgement in the way they do their work.
2. Choosing the right process
As mentioned earlier, these days it is not a matter of whether to use Agile, but rather what flavor of Agile to use. Below are a few common approaches your teams might choose:
Scrum is the most commonly used Agile methodology for organizations that want to develop products incrementally in short iterations, with more than 75% of respondents to the Agile survey noting they use some version of it. Scrum is frequently used interchangeably with Agile, and most Agile teams today will use basic pillars of Scrum such as Sprint Planning and Daily Standups. Those whose projects involve high levels of uncertainty may select Scrum because it allows teams to share progress frequently and pivot as needed.
Many mature Agile teams favor Kanban, an Agile framework for continuous work with limited throughput, or scenarios in which teams may be working on only a handful of tasks at one time. A typical Kanban team will have work requests coming in regularly, and the team will release on a continuous basis. This approach tends to work well for teams with work that is more operational or “keep-the-lights on” in nature, such as minor feature updates or bug fixes.
Organizations that want to expand their Agile practices to large programs or portfolios often select a scaled Agile framework. SAFe®, as it is known, is the most prevalent framework for enterprise-level implementations of Agile. This is often the choice for large programs with multiple teams and intricate dependencies. These large programs are typically a combination of Scrum and Kanban teams.
The best way to select the right flavor for your organization is to first observe and listen. Experienced Agile Transformation leaders will assess existing teams, tools, and processes to understand the current state of existing Agile practices. They will then pair those findings with the strategic goals of the business to choose the most appropriate implementation.
3. Team structures that fit the company’s goals and culture
Once leadership commits to the process and an appropriate Agile methodology has been selected, it is time to begin the “practice” of Agile.
Regardless which methodology you choose, two things are critical to a successful implementation: team structures, and the roles and responsibilities within those teams.
The Agile methodology has clearly defined roles with very specific responsibilities. The Product Owner owns the vision of the ultimate goal and is responsible for setting priorities to bring value to the customers quickly. Scrum Masters are servant-leaders, responsible for removing impediments and ensuring that the team adheres to Agile principles. Delivery Teams, which can include team members with different areas of expertise depending on the project, are responsible for producing high-quality products.
Clear roles and responsibilities prevent confusion. Without them, things fall through the cracks and there may be friction between team members with overlapping roles or reporting relationships. For example, some organizations may choose to appoint someone’s direct manager as a Product Owner. As work commences, the direct report working on the team may find it difficult to know when they are hearing from their boss, who can mandate how and when certain work gets done (and makes compensation and promotion decisions), or from the Product Owner, who does not dictate how the work gets done. Having a boss as a Product Owner can also diminish the sense of ownership a person has about their project.
The second most common mistake we find occurs during the formation of teams. Whatever Agile methodology an organization chooses, there are common aspects of successful Agile teams:
Teams with these qualities often will be better prepared to produce their best work while also adapting to changes in technology or customer demands. When teams continuously deliver products that meet customers’ needs, trust will continue to develop between teams and management.
Two of the most common and easy-to-fix mistakes we see involve team size and skillset. Teams that are too large often lead to longer meetings and time to align. Teams lacking cross-functional skillsets are more dependent on other teams. In both cases, teams risk increased complexity and potential for errors.
4. A true commitment to continuous learning
Implementing Agile at scale requires a commitment to continuous learning. Rather than conducting a post-mortem analysis at the conclusion of a project and filing away the findings, Agile puts specific emphasis on Kaizen, which means continuous improvement. The concept, which comes from the Toyota Manufacturing System, aims to eliminate waste by looking for product and process quality improvements throughout the entire development cycle.
In Agile, work is broken down into smaller increments so that learning from each increment can be applied to the following increment. Agile teams will conduct Sprint Retrospectives at the end of each one-to-four-week increment where they discuss and document what went well and what could be done better going forward. They then take these learnings to make the next increment more effective.
The importance of continuous learning is often overlooked. Leaders should allow their teams to fail and learn from those failures, while providing appropriate guardrails to ensure the team is not taking on undue risk. It is critical that teams not only hold regular and honest retrospectives, but that they also act on those findings and track progress. Too often, these retrospectives can become a routine activity that does not add value. By checking in frequently to discuss lessons learned, teams can quickly determine whether a product is meeting customer needs or changes they can make to their internal processes to ensure smooth delivery.
5. The right metrics
When measuring Agile maturity, teams should consider both hard and soft metrics.
Hard metrics are often quantitative data that can be obtained from the tools that teams use. They include:
It is important to evaluate hard metrics over a defined period of time in order to measure continuous improvement. After collecting data for at least four to six weeks, leaders will begin to see whether a team is improving or remaining stagnant. Generally, teams that embrace Agile values deliver what they commit to and increase their velocity over time.
Soft metrics are more qualitative in nature and are usually obtained using surveys and observations. We find that high-functioning Agile teams often have:
An effective Scrum Master, for example, will regularly check in with the team to ask for their level of satisfaction with the project and process. High-functioning teams respect each other’s feedback, are open to discussing difficult issues, and support one another throughout the process. From the outside, a mature Agile team will look like a well-oiled machine. Teams will be producing high-quality, innovative work that is validated in increments, and they likely will have fun doing it!
As companies continue to deploy Agile practices across their organizations, it is important to remember that it is a journey of continuous improvement. Agile is a way of thinking, and it best serves organizations when it grows and evolves with the organization’s needs. By choosing the right flavor of Agile, building cross-functional teams with clear roles and responsibilities, and practicing strong leadership from the top, companies will be better positioned to ensure that they can deliver the value that Agile promises.
While CIOs continue to prioritize the shift to product-oriented operating models in 2021, companies still struggle to create empowered product teams throughout their organizations. One significant inhibitor is often the lack of progress and investment in DevOps.
Amazon Web Services defines DevOps as “the combination of cultural philosophies, practices, and tools that increases an organization’s ability to deliver applications and services at high velocity.” In this setup, “development and operations teams are no longer siloed… [and] engineers work across the entire application lifecycle, from development and test to deployment and operations”.
DevOps can significantly enable product operating model transformations. It brings agile processes to life through technical enablement, turning processes into automation. Put simply, this often means automating the software development process from start (continuous integration / CI) to finish (continuous deployment or delivery / CD) while also creating empowered developers with a pulse on customer needs.
A successful DevOps transformation enables teams to react quickly to shifting market demands and reduces risk by decreasing the time it takes to get working software out the door. For example, an empowered product team that releases new features daily or hourly can iterate and innovate securely much faster than in the past, allowing for constant validation of product strategy and the ability to scale when they find something that works.
DevOps, Agile, and product operating model shifts are closely linked in successful digital companies. Through our work with some of the largest organizations in the world (both digital natives and digital immigrants), we have found that leaders who closely couple DevOps transformation efforts with Agile and product management transformations are significantly more successful in realizing their goals. Below are four tips to help you do so successfully:
In future posts, we will go into more detail about how to kickstart your DevOps transformation, from examining the key dimensions of the transformation process to exploring creative ways to fund DevOps efforts. Drop us a note if you have any questions, thoughts, or suggestions for future topics to cover!
This article is part of an ongoing series exploring the ways in which companies are can prepare for a post-pandemic world of work.
Tiffany Jenkins, Mac Connolly, and Yucca Reinecke co-authored this article
In the post-pandemic world of work, flexibility will be key. Our conversations with technology executives suggest that many companies expect to maintain a hybrid working model, in which some employees work remotely, others work primarily at the office, and many move back and forth between the two. More than 80% of executives polled during the January 2021 Metis Strategy Digital Symposium expect either a 50/50 split between remote work and the office or for most employees to work remotely beyond the end of the pandemic. And just this week, Salesforce.com said it would give employees three ways to work, even once it is safe to return to the office: flex, fully remote, and office-based.
In this article, we will explore four key dimensions leaders should consider as they evaluate the people, process, and technology changes needed to enable hybrid work for the long term, including:
A shift toward a long-term hybrid working model requires a major rethink of day-to-day operations. While many changes were made at the peak of the pandemic, including, in many cases, a massive shift to remote work, companies should now build upon the experiences and learnings to date while developing a sustainable operating model that supports these changes long into the future. That means rethinking existing ways of working, scheduling meetings, current employee practices, and the policies that govern daily operations.
An important first step is to assess which jobs will require a return to the office, which ones can be conducted fully remote, and which require a mix of both. In order to answer that question, companies may need to look at jobs from different points of view, including functional responsibilities, type of work performed, and the skills and preferences represented in certain jobs. For example, some companies are experimenting with having groups of employees return for a few days per week or bringing together certain teams on specific days when these teams are expected to engage in collaboration or discussions that benefit from co-location and in-person interactions.
For jobs that will be largely remote, leaders should think about whether those workers will be required to be located within a certain proximity of the office or other work-related physical location, if compensation changes based on employee location are warranted, and other policies that will impact future decision-making.
An operating model fit for a hybrid work environment should also anticipate the new, often more complex, ways in which colleagues will collaborate, over virtual collaboration and communication tools or even across time zones, and how that impacts productivity, employee experience, and company culture. Determining how and where teams will be expected to work together can further influence decisions around technology and real estate investments, as we will explore below.
Companies are placing renewed focus on employee experience as teams adapt to major changes in their work habits. While a shift to largely remote work during the pandemic led to increased productivity at many companies, the new setups also showed remote work’s potentially adverse effects on well-being as employees balanced the demands of work and home. Indeed, many employees’ greatest challenges stem from the physical and emotionally blurred lines between the workplace and their personal or family lives. As one of our executive partners recently said, “we no longer work from home, but we live at work”. Left unaddressed, these challenges could lead to difficulties retaining talent long term.
To that end, it is increasingly critical to invest in an employee experience that balances productivity and employee well-being. Fortunately, most organizations have realized that well-being, productivity, employee satisfaction, and retention are more closely intertwined than they were pre-pandemic and should be addressed in unison. Doing so can lead to higher engagement, and ultimately better business outcomes. A Gallup Study found that engaged employees are 21% more productive, 22% more profitable and score 10% better on customer ratings than unengaged employees. Companies that consider all these factors are more likely to retain talent and, in some cases, may become a more attractive employer now and during the gradual return to the ‘next normal.’
A key driver of employee engagement efforts is providing employees with the tools and support they need to do their jobs successfully no matter where they work. These can range from technology such as laptops, collaboration tools and video-conferencing applications to perks that support health and wellness, from gym reimbursements to subsidized childcare and access to therapy and mental health support.
Several organizations have also begun to experiment with virtual and digital tools that attempt to replicate the social interactions that typically occur in a physical workplace, such as virtual “water coolers.” While not intended to produce concrete outcomes, these social interactions have shown to lead to greater team cohesion, trust among team members, and generally higher levels of employee motivation. However, it is also important for leaders to help employees know when to log off or when it may be best to disconnect from more rounds of video conferences. Leaders should continuously solicit feedback and measure outcomes of these efforts on productivity and perception of well-being.
Putting people first by ensuring that they have the support they need, communicating early and often, and creating new opportunities for learning stands to boost both engagement and productivity no matter what comes next. As Verizon CIO Shankar Arumugavelu said in a recent interview about the company’s pandemic response: “We all have business resilience plans. At the end of the day, what stood out [at Verizon] is the human resilience. That really made the difference here.” As the company develops its post-pandemic plans, the company is taking the opportunity to rethink how things are done for the betterment of customers, employees, shareholders and society.
Several of the organizations we work with have addressed the new realities of virtual work by making it easier – and in some cases even explicitly welcome – to have family members join certain meetings, for example, or by otherwise supporting employees who are exposed to the logistical challenges of co-managing professional and personal lives.
As noted above, enabling a successful hybrid workforce means ensuring employees have access to the technology and tools needed to carry out day-to-day operations. In our conversations with IT teams, we have found that reliable and secure video conferencing, instant messaging, whiteboarding and visualization tools that can be accessed in and out of the office have often been deemed essential.
Rather than attempting to fully replicate the workplace in the remote environment, companies should first assess the digital tools and capabilities that have best supported a remote-first workforce. Firms can then assess how those tools may enable collaboration in an in-office and hybrid working environment and think through the process changes that may be required to do so. Many IT teams we have spoken with have adopted new interactive whiteboarding tools, for example, and companies have invested in the training needed to ensure teams are well positioned to use them.
Of course, simply implementing the needed tools will not lead to greater collaboration. Leaders also must be intentional about driving adoption. Slack or similar communication tools will not improve effectiveness if only a few people use it. Conversely, with deliberate and widespread adoption, the use of real-time communication tools can address the fundamental need for accessibility.
At a recent Metis Strategy Digital Symposium, Comcast CIO Rick Rioboli noted that the pandemic has created an opportunity to completely rethink the physical office. The company now is approaching its offices “not as what we go back to, but rather as what [our offices] can do for us.” Similar conversations are happening across industries as leaders consider how best to use physical office space once it is safe for employees to return.
Often, those conversations include thinking about how to weave digital capabilities that currently serve remote employees across the physical office environment and how to reconfigure existing space to maximize the potential for productive collaboration in a post-pandemic, hybrid world. A workplace intelligence report by global technology leader NTT Ltd. found that 31% of companies are implementing additional creative thinking spaces, while 30% will provide more meeting places and 27% will reduce individual desk space.
Turning the office into a digitally enabled, collaboration-first environment will be critical to enabling a hybrid workforce. As companies seek to create a safe, collaborative, and efficient space for their employees, we have observed a few common practices:
In addition to layering digital tools onto the digital space, there are some design changes that can benefit hybrid employees as well. Among them:
As companies begin to formulate and test hybrid operating models, continued investment and careful strategic planning are necessary to maintain effectiveness and resilience. While reports of increased productivity are reassuring, the next question to ask is how to make that productivity is sustainable over the long term. By adapting your operating model, investing in employee experience, empowering employees with needed tools and technologies, and rethinking the purpose of physical spaces, companies will set themselves up to tackle the changes brought on by a new world of work.
