The roles of Product Owner and Product Manager often intersect, leading to confusion and potential conflicts. These roles play a crucial part in product delivery, yet their distinctions are not always clear-cut. Understanding the nuances between a Product Owner vs Product Manager is essential for organisations to reduce friction, optimise their product development processes, and ultimately deliver high quality outcomes for the customer, faster and more reliably.

This blog aims to shed light on the key differences and similarities between these roles, exploring the challenges they face and the misunderstandings that can arise. We'll delve into the scope of their responsibilities, decision-making processes, and approaches to stakeholder management. By examining these aspects, professionals and executives will gain valuable insights to help them navigate the complexities of product development and foster more effective collaboration within their teams.


Defining the roles: Product Owner vs Product Manager

Product Owner responsibilities

Ideally, the Product Owner role is a sponsor or entrepreneur for the product, who are in charge of the business case and budget, and have the authority to make decisions. They should be invested in the product's success and have overall strategic and management responsibility.

However, in some organisations, the Product Owner's role has been reduced to that of a scribe or proxy. There's a tendency for Product Owners to take on the role of "story writer" and "project manager," adopting a project mindset of requirement order-taking and managing scope, budget, and timeline.

Product Manager responsibilities

Product Managers have their eyes set on the horizon, focusing on vision, strategy, and communication. They gather insights, understand customer needs and plans for the future of the product, whilst also maintaining the product roadmap. Their core responsibilities are to drive innovation, meet long term business objectives, and keep the organisation’s products relevant in competitive market contexts.

It's worth noting that in some organisations, especially smaller startups, one person may perform both roles simultaneously. This approach can work, but it's important to understand the core responsibilities required to ensure effective product development.

As Dan Teo, CEO & Partner of Radically puts it, “Someone needs to manage the strategy, value, and backlog of work; everything else is open for tailoring. I would start with a blank sheet and list the core things that need to be done. Then within the context see what roles are required. In a cost-constrained environment, the concept of “hats” instead of roles is a good solution.”

 

Key Differences and Challenges

While there's significant overlap between these roles, there are key differences which are sources of common tensions.

product-owner-vs-product-manager

Scope and Time horizon: Long-term vs Short-term Goals

Product Managers are responsible for setting the overall direction of the product, which involves making strategic decisions that align with the company's long-term objectives. Product Owners, on the other hand, are more concerned with short-term goals, such as delivering specific features or improvements within a sprint.

This difference in time horizons can lead to disagreements about priorities and resource allocation. Product Managers might push for initiatives that have long-term benefits but require significant investment, while Product Owners might advocate for more immediate, tangible results that satisfy current customer needs.

Decision-making: Strategies vs Tactical Focus

Product Managers typically focus on the broader product vision and strategy, while Product Owners tend to concentrate on tactical, sprint-level decisions. This difference in focus can lead to tensions, especially when responsibilities overlap. Product Managers need to maintain a long-term perspective, overseeing the entire product lifecycle and developing the product roadmap. In contrast, Product Owners often find themselves more involved in the day-to-day aspects of product development, managing the product backlog and working closely with development teams.

Stakeholder Interactions

Product Owners work closely with development teams, and act as a bridge to other stakeholders to maximise the value of the product. A key group is the customer, as they often represent their needs and translate them into product requirements. 

Product Managers have a broad scope of stakeholder interactions. They focus on the product vision and strategy, communicating with stakeholders to ensure alignment and gather insights. They oversee the entire product lifecycle, from conception to launch and beyond. Product Managers also develop and maintain the product roadmap, outlining the future direction and planned features.

Product Managers need to balance the needs of various stakeholders, including executives, customers, and development teams. They are responsible for making higher-level strategic decisions that align with the company's long-term objectives.

 

Overcoming Tensions

Establishing clear distinctions between a Product Owner and a Product Manager’s role can help with overcoming decision-making conflicts. Some useful strategies include:

  1. Role clarity: Because these roles work together closely and responsibilities can vary greatly from organisation to organisation, it’s important to clearly articulate the scope and responsibilities of each role to minimise confusion. 
  2. Regular communication: Encourage continuous open dialogue between Product Managers and Product Owners to ensure alignment on product goals and priorities.
  3. Collaborative planning: Involve both roles in strategic planning sessions to allow both the long-term vision and short-term execution needs to be surfaced and tradeoffs be worked through.
  4. Shared metrics: Establish common success metrics that both roles can work towards, balancing short-term wins with long-term objectives.

product-manager-vs-product-owner


Conclusion

The relationship between Product Owners and Product Managers has a significant impact on the success of product development initiatives. Their distinct yet overlapping roles require clear communication and collaboration to navigate the challenges of scope definition, decision-making, and stakeholder management. By understanding the value and  responsibilities of each role,  fostering an environment of mutual respect, and addressing these challenges head-on, organisations can create a more harmonious and effective product development process.

Want to learn more?

If you’d like to learn more, feel free to get in touch at tiffany@radically.co.nz

 

Developing your company's purpose is one of the most critical steps in building a meaningful and successful business. Gone are the days when work was solely about trading time for money. Today, employees seek a deeper sense of purpose, often valuing it more than financial compensation. In this blog, we explore the significance of company purpose, why it matters, and how to develop your company's purpose to inspire your team and create a basis for sound future decision-making.

When I started my career, the philosophy was that work was a transactional exchange where you performed a role in exchange for money. The assumption was that you always wanted more money and therefore would happily modify your performance and behaviour to achieve this.  Yet, as a consultant, I worked with teams that completely defied that notion. They worked for something else.

This concept fascinated me and drove me to understand what motivates people. My employer noticed this and moved into a management position. While I found this incredibly exciting, I struggled to find good role models to learn from. The system of work in which I had grown up was a leftover from the last century, devoid of good examples for a hungry mind. Thankfully, my timing was good, and work was about to undergo a seismic shift.

Fast-forward 22 years, and we have a very different world of work. It turns out that why we work (purpose) is extremely important to people—at times, more important than money.

There are a lot of different reasons for this, but the two major trends I see are:

  1. Societal shifts: People used to obtain most of their meaning and purpose outside the workplace, largely from community groups, churches, and neighbourhoods. These are now in obvious decline, and people’s need for purpose has turned to the workplace.
  2. Advances in behaviour science - we now understand a lot more about what motivates people, and what provides purpose and meaning.

 

Societal Shifts

Humans have an inherent biological need for social connection. Traditionally and instinctively, we have developed a sense of meaning and purpose through social groups. However, attendance in social groups is declining.

In Robert Putnam’s book Bowling Alone, he illustrated the decline in civic participation, from community groups to religious organisations, and its link to the breakdown of social capital. Younger generations, such as millennials and Gen Z, are significantly less likely to join local groups, further accelerating this decline.

Church attendance has steadily declined since the early 2000s, a trend confirmed by multiple surveys from reputable research institutions. In the United States, less than 50% of the public now attend church regularly - for the first time, it has dropped below 50%.

We used to find meaning and purpose in society. With that in the decline, we seek to fulfil this basic human need at work.

Behavioural Science

Neel Doshi and Lindsay McGregor's book Primed to Perform is a compelling reward on the topic of human motivation. They categorise work into two types:

  1. Tactical performance is "how effectively your organisation sticks to its strategy." Good tactical performance (rules, checklists, and standard operating procedures) is essential for certain types of work.
  2. Adaptive performance is “how well your organisation diverges from its strategy." It’ shows up as creativity, problem-solving, resilience and innovation.

Over the last century, we have excelled in tactical performance. But as our world becomes increasingly Brittle, Anxious, Non-Linear and Incomprehensible, adaptive performance is critical.

Six factors impact adaptive performance - three positive and three negative:

  • Play - when you are motivated by the work itself.
  • Purpose - you work because you value the work’s impact
  • Potential - you grow and learn from the work
  • Emotional pressure - you work because some external force threatens your identity.
  • Financial Pressure - you work to gain a reward or avoid a punishment.
  • Inertia - you dont know why you work. You go to work because you did yesterday.

It turns out that why you work affects how well you work. Purpose really matters. For a deeper dive into this see this webinar we did with Neel Doshi.

Finally, the Better Up Meaning and Purpose Report highlights a compelling and confronting statistic : 90% of people surveyed said they would sacrifice up to 23% of their future lifetime earnings for work that is more meaningful.

That is twenty-three per cent of their earnings for the rest of their lives to have meaningful work.  

If businesses haven’t clicked yet, purpose and meaning are very important.

What is Purpose?

We’ve discussed the importance of Purpose and will shortly dive into how to develop yours. But first, we need to clarify what exactly purpose is.

The purpose is the underlying reason why your company exists. It’s the broader impact your organisation aims to achieve in the world. It ignites people with the energy, passion, and motivation to get out of bed each morning.

Examples:

  • Amazon: “To be Earth's most customer-centric company.”
  • CVS Health: Helping people on their path to better health.
  • eBay: “To empower people and create economic opportunity for all.”
  • Apple’s Purpose: “To empower creative exploration and self-expression.”

A good purpose statement leaves freedom and scope on the how. As a founder, you want your people to think about new and innovative ways to achieve the company's purpose. If any of our team approached me with a new idea, I would first apply the purpose filter—“Does it help us achieve our purpose?” It needs to make sense commercially, too, but purpose comes first.

How to Develop your Company's Purpose

The work required to develop your company's purpose is significantly more challenging than you might first think. It took me over six months in my second company, Clarus, as my first attempts felt cheesy and too lofty.

What I (eventually) learned was to let go of the need to “get right.” Remember, perfect is the enemy of good.

Start with your underlying beliefs and passions. Why are you putting all this effort into a business? What is the rallying cry that will inspire others? Why should anyone care? Ponder these questions and then write down your top five ideas. Now go share them with others. Don't just read them out; tell a story about the problem this business solves and why it is important. Watch how they respond. Are they motivated by it, or are they ambivalent?

If you are an existing business looking for your purpose, try this. One of the best techniques I’ve used came at Clarus. One of the team members, Robbie May asked, “What would the world look like if Clarus disappeared tomorrow? What is the hole we would leave in the business landscape? THAT is our purpose.” I found that an excellent way of thinking about it. As a team, we could answer this immediately.

If you are a new business, your purpose will likely come from

  1. Market research -  what unmet needs or problems does your proposed business solve? Look at what your competitors are doing and understand what needs are not being addressed by their products or services.
  2. A strong understanding of your customers' needs -  it is very hard to develop a purpose statement if you dont know your customer's needs. The best way to understand these is NOT surveys and polls. Get out from behind your laptop and talk to them. You will be surprised by how much you will learn.

Start with these, understand how your business can solve a particular problem and develop a starting purpose you can then iterate on.

Example: Developing our Company Purpose at Radically

When Dan and I started Radically, we knew the problem we wanted to solve. Companies told us they needed help to modernise how they delivered work. Many of them had tried agile but failed to make any meaningful impact.

At the time, the only option was one of the Big Four consulting firms, and it was clear that firms engaged them reluctantly. Dan and I were both tired of seeing people roll their eyes and complain about these companies, and we felt we could do a much better job. In short, we wanted to show that consulting doesn't have to suck.

We also wanted to be an upstart that would challenge the status quo but had clear business acumen and the credibility to work with executives. We wanted to be alternative but corporate.

This was our starting purpose:

We help leaders transform their organisations to achieve radically better outcomes.

We started with clients who already knew us, trusted us, and worked incredibly hard to meet our purpose and started earning a good reputation. After our first year, we realised our purpose statement needed to be narrower. We pivoted to

We help businesses adapt to meet the needs of a rapidly changing world.

This worked well for us for many years, but as the company grew we knew we needed a purpose statement from our people. At a company offsite, we discussed who we are and what we believe in. Out of that came our refined purpose statement of today:

We design and build future-ready businesses by bringing together high performance and humanity.

This purpose statement now clearly defines who we are, why we exist and what we do. We passionately believe that a future-ready firm needs to be at the intersection of high performance and humanity.

Notice it also suggests what we aren’t and don't do. We dont high-performance at any cost. We dont believe in armies of soulless consultants in suits, largely made up of graduates straight out of university, billing every minute possible.

Don't get hung up trying to get it perfect. Start with what you have and iterate over time.

Summary

Humans are hardwired to come together in social groups to achieve something bigger than ourselves. Tapping into this is both ethically and commercially astute. A strong purpose drives good decision-making, aligns stakeholders, and inspires employees by providing meaning and direction.

This approach is the future of business. It creates places where people want to work and inspires belief, promise, and hope.

In my next post, I will discuss the challenges of running a purpose-driven firm. It is hard and requires a lot of new leadership skills!

If you are interested in discussing anything here (or any other lessons), please contact me over LinkedIn.

 

 

In today’s business world there is a tension between flexibility and certainty, and organisations find themselves torn between predictive and adaptive approaches. Combining Agile and Traditional Project Management has become a hot topic, as businesses try to use the best parts of both methods without compromising quality. This mix aims to blend the structured planning of the waterfall model with the adaptability and ongoing improvement of agile techniques creating a strong hybrid approach that can adjust to different project needs and hurdles.

This article explores how to blend predictive and adaptive approaches to create successful initiatives. We'll look at key considerations when putting this combined approach into action, including project type, communication strategies, and tools that support both approaches. The piece will also tackle common problems that arise when mixing these different project management philosophies and offer practical ways to solve them.

 

Integrating Predictive and Adaptive approaches for successful initiatives

The integration of traditional project management with agile methodologies has become more common in large-scale organisations. This blend brings together the organisation and planning of traditional methods with Agile's quick responses and adaptability. But setting up and operating a hybrid approach has its own challenges which require careful alignment between the project team, organisational objectives, and project implementation.

To better understand the challenges associated with implementing hybrid models, interview data was collected from eight experienced Agile coaches who have implemented Agile in non-software industries. The practical actions identified for managing these challenges can be categorised into three levels: aligning planning and delivery approaches, effective risk management, and stakeholder engagement.

agile-project-management

 

Planning and Delivery

A crucial part of combining predictive and adaptive methods involves striking the right balance between planning and delivery. Traditional project management puts emphasis on detailed planning up front, while Agile focuses on iterative delivery and adaptability. To integrate these, organisations should establish a plan that provides direction and clarity of intended outcomes, while allowing for some flexibility as more information arises with each iteration. It’s important to have a plan to forecast, predict and manage dependencies, and iterative delivery with frequent feedback loops to allow projects to navigate the uncertainty inherent in today’s projects.

At the beginning of the project it’s crucial to clarify the intended outcomes of the initiative and create at least a high level plan of how they will be achieved. The optimum level of upfront planning required will be determined by the type of work and level of certainty, but in most cases the work in the near future will be more certain than the work further in the future, and the level of granularity of planning should reflect this. There is often little value in planning every detail of a task that will happen 3 years from now because it is likely to change and can be solidified closer to the time!

Once a plan is established, the iterative delivery of adaptive methods allows for the project team to react to change by checking progress on a regular cadence and making more informed decisions as the work progresses and more information is available. Ensuring that the main project plan is continually kept updated, and transparent to team members and stakeholders is crucial to ensure alignment across the project.

Risk Management

Effective risk management is crucial when combining predictive and adaptive approaches. Traditional risk management techniques such as identification, mitigation and monitoring strategies are important, but can be complemented by the proactive risk mitigation approaches of Agile practices such as limiting work in progress and increasing transparency. Regular risk reviews and retrospectives also allow teams to identify and address potential issues promptly. By fostering open communication and encouraging proactive risk management, organisations can manage the risks they can predict and navigate the ones they can’t.

Stakeholder Engagement

Engaging stakeholders is essential for the success of hybrid projects. Traditional project management often involves formal communication channels and structured stakeholder management processes. Agile, on the other hand, emphasises frequent interaction and collaboration with stakeholders. To effectively integrate these approaches, organisations should follow the valuable traditional approach of stakeholder identification and engagement planning, but also establish clear communication protocols that facilitate regular feedback loops and stakeholder involvement. This includes conducting regular demos, showcases, and review meetings to keep stakeholders informed and aligned with project progress.

By defining and aligning planning and delivery approaches, creating effective risk management practices, and meaningfully engaging stakeholders, organisations can successfully navigate the challenges associated with implementing hybrid models. The insights gained from experienced Agile coaches provide valuable guidance for practitioners seeking to effectively combine predictive and adaptive approaches in their project management practices.

 

Key Considerations

When integrating Agile and traditional project management approaches, several key considerations need to be taken into account to ensure a successful implementation. The approach taken for any project should be based on the type of work and the problems to be solved. Generally, if work is more predictable, a traditional approach may be more suitable, while if work is more uncertain and requires more flexibility, an Agile approach may be more appropriate.

Assessing Project and Programme Type

The project and programme type and requirements play a crucial role in determining the most suitable approach. It is essential to assess the nature of the project, its complexity, and the level of uncertainty involved. This assessment helps in deciding whether a predictive, adaptive, or hybrid approach would be most effective in delivering the desired outcomes.

Evaluating Team and Organisational Culture

Another critical consideration is the team and organisational culture, as well as stakeholder expectations. Agile methodologies heavily rely on collaboration, transparency, and a willingness to embrace change. The organisation's culture should support these values to facilitate a smooth transition towards Agile practices. It is important to align stakeholder expectations with the chosen approach and ensure their buy-in and support throughout the project lifecycle.

Adapting Stakeholder Engagement

Effective stakeholder engagement is often the key success factor for initiatives and can make or break a project. To ensure stakeholders are kept informed and engaged, one must consider the current expectations and mindsets of key stakeholders and tailor the stakeholder engagement and communication approaches accordingly. For example, a key stakeholder who is accustomed to traditional reporting and governance styles will expect to be engaged in this way and these practices may be required to win their trust, but involving them in regular iteration reviews and showcases can introduce them to a different way to engage.

Tailoring the Approach

When integrating Agile and traditional project management, it is essential to consider the project and programme type, team and organisational culture, and stakeholder expectations. By carefully assessing these factors and adopting a tailored approach, organisations can successfully blend the strengths of both methodologies to deliver successful initiatives.

 

Tackling Obstacles

Integrating agile and traditional project management approaches can present several challenges that organisations must navigate to ensure successful implementation. These challenges often stem from resistance to change, misalignment of processes, and stakeholder management issues.

agile-project-management

Addressing Resistance to Change

One of the primary obstacles is the resistance to change within an organisation. Transitioning from a traditional, hierarchical structure to an agile, collaborative environment requires a significant shift in mindset and culture. Employees may be hesitant to embrace new ways of working, fearing the unknown or feeling uncomfortable with increased transparency and accountability.

To overcome this resistance, organisations must invest in the change journey for their people. Training and education programmes can help employees understand the benefits of agile methodologies, but experiencing a different way of working is often required to shift mindsets. Choosing a strategically important project to pilot Agile ways of working creates focus and dedication, but often requires external support to ensure a sound application of Agile approaches. Leadership leaning in and encouraging teams to embrace change and adapt to new ways of working is also an important success factor.

Aligning Agile and Traditional Processes

Another challenge lies in the misalignment of processes between agile and traditional approaches. Providing clarity on which approaches will be adopted, how the project will operate and how roles and teams will interact is crucial for success. Investing time at the beginning of the project to agree ways of working (project structure, roles and responsibilities, forums and cadences, etc.) will ensure that team members understand how work is done and how information flows through the project.

Managing Stakeholder Expectations

Managing stakeholder expectations can be difficult when they are accustomed to one approach over the other. To overcome this mismatch in expectations, organisations must educate stakeholders on the benefits and strengths of each approach in different contexts, and how each approach requires different stakeholder engagement and behaviour.

Ensuring that stakeholders feel engaged and updated is important to win and maintain their project support. Especially if agile methodologies are new to some stakeholders, ensure that they are involved in planning and review meetings and actively elicit their input. Creating and maintaining transparent reporting practices which clearly communicate status and progress can also be a great way to ensure stakeholders stay informed and engaged.

Managing stakeholder expectations can be difficult when they are accustomed to one approach over the other. To overcome this mismatch in expectations, organisations must educate stakeholders on the benefits and strengths of each approach in different contexts, and how each approach requires different stakeholder engagement and behaviour.

Ensuring that stakeholders feel engaged and updated is important to win and maintain their project support. Especially if agile methodologies are new to some stakeholders, ensure that they are involved in planning and review meetings and actively elicit their input. Creating and maintaining transparent reporting practices which clearly communicate status and progress can also be a great way to ensure stakeholders stay informed and engaged.

Embracing a Proactive Approach

By addressing resistance to change, aligning processes, and effectively managing stakeholders, organisations can successfully overcome the challenges associated with integrating agile and traditional project management. It requires a proactive approach, clear communication, and a willingness to adapt and continuously improve. With the right strategies and support, organisations can harness the strengths of both methodologies to deliver successful projects and drive business value.

 

Quick Recap

The integration of Agile and traditional project management approaches provides a powerful toolset to tackle complex initiatives. By blending the structure of traditional methods with the flexibility of Agile, organisations can adapt to changing requirements while maintaining a clear direction. This hybrid approach has a significant impact on project outcomes, enhancing team collaboration and stakeholder engagement throughout the project lifecycle.

As the project management landscape continues to evolve, mastering this integrated approach becomes crucial for success. Teams that embrace this methodology are better equipped to navigate challenges and deliver value consistently. By adopting a balanced perspective and continuously refining their approach, organisations can unlock new levels of efficiency and innovation in their project delivery.

Want to learn more?

If you’d like to learn more, feel free to get in touch with me at ryan@radically.co.nz

 

Does this scenario sound familiar? Your company has embraced agile and teams now enjoy greater focus and clearer collaboration. Yet the anticipated business benefits have not materialized. Delivery is slow, expensive and a source of frustration.

Although agile has markedly improved organisations, the full benefits are unattainable unless the entire work system is aligned with agile principles.

With over 20 years of experience in helping organisations achieve high performance and adaptability, I've gained valuable insights into agile system design. In this article, I will share some of these insights and discuss one of the most effective frameworks for optimizing organizations for peak performance: value streams.

Organisational Design

For the past century, reductionism has been the prevailing method of organizational design. In this model, the work of the organization is progressively broken down and assigned to functional units. Centralized management then coordinates these functions, aiming to ensure that the right people perform the right work at the right time. This approach has historically been reasonably effective, contributing to the development of many goods and services we now consider essential.

However, over the past three decades, as the world has grown increasingly fast & complex, the limitations of the reductionist approach have become painfully apparent. It presents several challenges:

  1. Frequent hand-offs between teams or business units that hinder rapid end-to-end delivery.
  2. Ambiguities in team roles and interactions, leading to internal friction and confusion.
  3. An inability for the organization to swiftly adapt to external market changes as work is stuck in progress.

 

Slow delivery

 

Consider a traditional organisation design where individuals are grouped based on their skills into specific functions, such as Sales, Marketing, Product, and R&D. When a customer makes a purchase or request, the responsibility for fulfilling this request flows across these various functions. Each participant handles their segment of the request before handing it off to the next function, like a relay race. If errors occur, the work must be returned to a previous stage for corrections.

Coordination of these efforts typically falls to a manager, whose task is to orchestrate these activities efficiently—a nearly impossible job. Often, when work arrives at a function, that group is already engaged with other tasks, forcing the new work to wait. This leads to significant delays.

Furthermore, since each group focuses only on their specific part of the process, they may lose sight of the overall customer outcome. This can lead to misdirected efforts and costly mistakes.

While a functional structure makes sense from an internal efficiency standpoint (let's group everyone who does similar work together), it creates significant waste and fails to streamline the delivery of value to the customer. And in a hyper-competitive world that just doesn't cut it.

Agile Emerges as a Team-Level Solution

Agile provided major improvements at a team level via cross-functional teams. To eliminate hand-offs between functions, teams were cross-functional and worked collaboratively to deliver a shared customer outcome.

Jeff Sutherland, co-creator of Scrum, took inspiration from The New New Product Development Game.

"Under the rugby approach, the product development process emerges from the constant interaction of a hand-picked, multidisciplinary team whose members work together from start to finish. Rather than moving in defined, highly structured stages, the process is born out of the team members’ interplay (see Exhibit 1).

In the rugby approach to product development, a specially selected, multidisciplinary team collaborates continuously from the project's inception to its completion. The development process evolves through the dynamic interplay among team members, rather than progressing through rigid, predefined stages. This method emphasises the fluid and collaborative nature of the team's interactions (refer to Exhibit 1)."

The New New Product Development Game

Exhibit 1 - Sequential (A) vs. overlapping (B and C) phases of development

 

In a cross-functional scenario, a team would be made up of individuals from Sales, Marketing, Product, and R&D, all collaborating as a single unit with a clear focus on meeting the customer's needs. Progress!

 

Collaboration

 

 

However, complications arise when the work requires multiple teams. Handoffs lead to work accumulating in queues, awaiting the next person, team or business unit.

This delay is glaringly obvious in the production of physical goods, where work visibly stacks up. Consider a production line where goods must go through several stages to be completed. Queues immediately highlight where the bottlenecks are and we can identify areas to investigate.

Yet in knowledge work, the queues are largely invisible. Work sits in a queue, waiting for a team or business unit to pick up once they get what they are currently doing completed. Consider all the items sitting in your email inbox, pending your action to move forward!

In many organizations, only 5-10% of the total time required to deliver a piece of work is the time spent actively working on it (adding value). The rest, a staggering 90-95%, is spent waiting. This is known as process efficiency and understanding this can fundamentally change how you view organisation design.

 

Process efficiency

The traditional functional organisation design results in significant waste. The value-add work is only 5 days yet elapsed time is 23 days. This is surprisingly common.

 

Value Streams

Agile revolutionized more than just software development, quickly gaining traction with other business units such as legal, finance, and marketing.

Value Streams extend the agile philosophy into organizational design by organizing multiple teams around a clear, customer-oriented mission, aiming to minimize hand-offs and establish clear team scope and interactions. By aligning cross-functional teams towards a unified goal, value streams reduce unnecessary hand-offs and have become an essential element of contemporary organizational design.

Value Stream model

In a Value Stream-based model, the design is optimized to reduce hand-offs and wait times, with clearly defined team scopes and interactions.

 

When structuring teams, Team Topologies by Matthew Skelton and Manuel Pais offers valuable guidance. It outlines four distinct team topologies:

  1. Stream-aligned team: aligned to a flow of work from (usually) a segment of the business domain
  2. Enabling team: helps a Stream-aligned team to overcome obstacles. Also detects missing capabilities.
  3. Complicated Subsystem team: where significant mathematics/calculation/technical expertise is needed.
  4. Platform team: a grouping of other team types that provide a compelling internal product to accelerate delivery by Stream-aligned teams

 

Leveraging Value Streams

While value streams are a highly beneficial concept, adopting a value stream-based operating model represents a significant undertaking. It alters the fundamental ways in which people work, disrupting roles, accountabilities, reporting structures, and performance metrics. Managing this transition requires strong change management.

Such transformations are inherently risky. Each organization possesses a unique blend of people, processes, culture, mindset, governance, management, and leadership. Successfully implementing a value stream model involves thorough consideration, meticulous planning, and careful adaptation.

We have achieved considerable success using a strategy that involves co-creation with stakeholders and pilots.

Co-creating a Value Stream Operating Model

Co-creation involves collaborative workshops where we design the operating model together. Our approach is grounded in the belief that while Radically provides deep expertise, no one understands the intricacies of your business as well as you do.

Our clients consistently tell us that this collaborative approach is a breath of fresh air. Many have had negative experiences with traditional consulting firms that isolate themselves in a conference room for weeks before unveiling their model in a grand reveal. Experiencing change imposed upon you can be unpleasant. Participating in the process of change is far more empowering.

Naturally, no model is flawless. This type of work is fraught with complexities and many "unknown unknowns." This is where conducting pilot projects proves invaluable, allowing for iterative testing and refinement.

 

Pilots

The field of Complex Adaptive Systems has significantly influenced our understanding of organizational design. Such systems, characterized by "unknown unknowns," defy straightforward planning and implementation. Instead, effective solutions tend to emerge organically through active engagement and practical experimentation.

The purpose of a pilot is to implement a crucial piece of work using agile, uncovering likely "unknown unknowns" before scaling further. Typically, a pilot focuses on a specific segment of the business, such as a single value stream, a strategic initiative, or a major project. At Radically, we establish these pilots based on the principles, desired culture, leadership style, and operational methods we aim to promote.

We assemble a cross-functional team drawn from different business units. Their role is to

  1. Guide the change.
  2. Observe the emerging patterns and interactions.
  3. Use the insights gained from these observations to refine and enhance the operating model design.

In this approach, we work in short cycles, continuously reviewing and adjusting our progress. During these iterations, we identify any aspects that may need modification to successfully scale the model, such as reporting structures, incentive schemes, key performance indicators, mindsets, skills, and communication methods. Over several months, this iterative process yields critical insights—insights that only become apparent through actual implementation. We then determine solutions for these issues before scaling further.

By leveraging co-creation and pilot projects, we collaboratively design and test a model that truly works. When the people doing the work participate in the model design, it not only enables smoother change but also makes acceptance and adaptation of the model substantially easier.

Co-creation

Summary

Adopting a value stream-based operating model can significantly reduce waste and increase adaptability across many organizations. When combined with agile ways of working, human leadership, and a strong emphasis on value, companies can greatly enhance both performance and customer satisfaction, while also improving organizational culture and the workplace experience for their employees.

Designing such an operating model involves numerous collaborative design workshops, effective communication, active listening, and thoughtful discussions, all underpinned by careful change management. Strong executive sponsorship and support are crucial; without this model being a priority among the top executive concerns, successful implementation is unlikely. Transitioning to a new operating model is a substantial and disruptive endeavour, but the benefits make it a worthwhile investment.

 

Want to learn more?

If you’d like to learn more, we can run a one-day deep dive Designing Value Streams workshop for you. Just drop me a line and we can discuss.

 

Meet Ryan Jones.

Where did you grow up?

I grew up outside of Atlanta, Georgia in the USA, went to uni in the UK, came over to New Zealand in 2017 and have absolutely loved it here.

 

Do you have any hobbies? What do you enjoy doing outside of work?

I’ve been a musician since I was young and have always loved listening to and making music. I’ve been in many different bands growing up, and nothing can beat a good jam session with mates. My wife Rachael and I also love getting out into nature and we go camping and hiking as often as we can. We’ve managed to do 8 of the 10 Great Walks and hope to do the other two soon!

 

What made you get into consulting?

The modern office world can be a very strange and unnatural environment and I’ve always been passionate about making a dent in this to help people become more engaged and at ease in their workplace. Eventually in my career I realised that as a consultant I can use my skills to make a bigger dent!

 

Where do you see yourself in the next 5 years?

My wife is currently pregnant with our first child, so in 5 years I see myself fulfilling the most important job title of my life - Dad!

 

Throughout your time at Radically, what is one key thing that you have learnt?

Organisations are modern day tribes and are made solely of people and relationships, so the more that you can make each interaction and relationship as rich and meaningful as possible, the healthier the organisation will be! 

Also, I’ve seen many organisations struggle to deliver at pace because information has to flow up to the top levels of management for decisions to be made, which results in slow pace and ill-informed, biased decisions being made. When clear strategic direction is given by leaders and decision-making authority is delegated to people who are closer to the work (with clarity on constraints and guardrails), it results in better and faster decisions, and a more empowered and engaged workforce.

 

What advice do you have for other leaders?

Because organisations are solely made of people, relationships and interactions, make your interactions more meaningful by prioritising richer communication channels. Just remember “walk, talk, write” - if you have a significant message for someone, walk over and talk to them if you can, if not pick up the phone and call them, and rely on email and messaging only if necessary!