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High-performing product teams: What are they doing differently?
While organizations across industries widely practice agile delivery practices, few emerge as high performers that have fully embraced enterprise agility. High-performing product teams break down silos, accelerate product-centricity and drive agility in all parts of their business.
According to a proprietary survey of more than 900 senior executives conducted by Strategy&, PwC’s strategy consulting business, less than a third of organizations surveyed have adopted the agile method across the entire enterprise. Moreover, organizations are taking significantly longer to achieve expected agile maturity: Compared to our 2019 survey, three times as many organizations have taken more than eight years to attain agile maturity. With the agile achievement gap widening, high performers have a competitive advantage. It has become increasingly important that transforming organizations have a direct path forward to enterprise agility.
The five-dimension framework
In our work advising and analyzing organizations that are adopting agile, PwC Strategy& uses a five-dimension framework to evaluate an organization’s agile maturity. High performers are reimagining their enterprise across end-to-end customer journeys, achieving product excellence and winning through innovative solutions that respond to change and create value for customers.
Here are the five dimensions that make up our framework:
- Organizational model with agile roles and product-centric teams that enable collaboration across lines of business
- Talent model in which individuals adapt to change and risk and have skills needed for end-to-end ownership of value delivery
- Technology enablers for teams to rapidly develop and release new products to market
- Planning and performance management in which funding allocation is based on rapid and iterative prioritization rather than long-term planning
- Ways of working that allow teams to collaborate efficiently in the delivery of shared, iterative outcomes
Organizational model
Having a strong organizational model is foundational to the agile journey and allows for a heightened focus on product management functions. High-performing teams have delivery structures organized around products or end-to-end journeys, with business and technology teams collaborating to develop products or platforms. Their organizational models align to their agile portfolio using customer segments, customer experiences or business capability.
These high performers break down static, siloed and structural hierarchies. Through sweeping enterprise transformations, high performers standardize their product model blueprint across lines of business, including key roles and responsibilities of the product hierarchy. Over time, these organizations have a path to reducing the role of certain “hats,” such as scrum masters, and periodically review the current environment for any anomalies and structural changes in their organizational model.
Talent model
The high performers we’ve studied have an enterprise approach to capability building, ongoing coaching and performance management. They have a strong understanding of resource requirements, as well as foundations for upskilling and coaching employees where needed. Agile Centers of Excellence (ACoEs) can be helpful in this aspect, providing guidance and leading practices as well as dedicated coaching to agile teams. Just 31% of organizations that we surveyed in 2022 provide agile team learning and coaching through a dedicated employee-led training center. The remaining organizations rely on external sources for training or certifications or hire agile coaches as needed.
When a leading US-based financial services company empowered its ACoE to train and coach product teams, key roles such as product owners underwent role-specific learning journeys to develop agile capabilities and behaviors regardless of their line of business. The ACoE expanded to product leaders, coaching directors and above on transformational leadership. Through this strong nurturing system, the company was able to transform all levels of the product hierarchy, creating a baseline for enterprise agile behaviors and developing an organizational mindset shift from project to product.
Developing a dedicated, homegrown talent center is an investment to retain and nurture internal employees. Having a strong employee base ensures that product teams are stable and persistent, allowing individuals to build product-specific expertise to consistently deliver on the customer journey. According to the 2022 survey, approximately 60% of organizations plan to accelerate hiring and bulk up their internal employees.
Technology enablers
Technology enablers focus on an organization’s data architecture as well as its automation and DevOps practices. High performers have modernized architecture (e.g., cloud-based, application programming interfaces) as well as automated pipelines that support continuous delivery. These attributes allow organizations to scale up and deliver with speed.
Lagging behind competitors in technology is not an option. In the 2022 survey, 43% of organizations reported having a widely adopted modern architecture foundation that enabled their ability to innovate, develop and scale with speed, while 37% had made substantial progress in modernizing technology foundations with pockets of technical debt still remaining. Meanwhile, those in the early stages of the tech modernization journey must address legacy infrastructure that impedes delivery.
Planning and performance management
To measure how and where value is flowing in the agile enterprise, high performers have lean processes and performance management functions in place, prioritizing and reviewing strategic initiatives more frequently to optimize the use of resources on the most valuable opportunities. In addition, almost 70% of respondents in the 2022 survey either agree or strongly agree that IT teams and lines of business in their organizations must work together to plan and deliver strategic initiatives. Through cross-functional collaboration, product strategy, roadmap and delivery are integrated.
The financial services company mentioned earlier launched an agile product review process to bring product leadership and product teams together from lines of business and technology to discuss and align on product strategy, team performance and key blockers. Conducted at the product-family level, this review process enhanced organization-wide agile maturity with a standard approach to discussing and assessing products as an enterprise, driving stronger alignment between product strategy and execution. Moreover, with more frequent checkpoints with leaders driving accountability for technology and business metrics, productivity and team performance improved.
Enterprise metrics need to be flexible in that they will evolve as organizations mature in the agile journey. High performers have evolved from tracking transformation progress metrics (such as the number of employees trained or certified) to execution metrics (such as feature delivery lead time) and finally to business metrics. These value-delivery metrics focus on business impact such as revenue, earnings, cost or net promoter score, and suggest a stronger relationship between technology and lines of business in product delivery.
Ways of working
This dimension of enterprise agility ensures that organizations do not backtrack on their agile journey and that they continue to adopt and evolve agile ways of working. Specifically, ways of working relates to agile mindsets, behaviors and practices in the hierarchy of agile work decomposition, ceremonies and product visioning.
High performers support and enable teams to deliver using agile principles wherever possible, allowing the organization to adapt with speed and provide value to customers more quickly. However, adopting ways of working across the enterprise is more difficult than it sounds. For instance, many organizations continue to struggle with reaping benefits of the product model, specifically in deriving “value” from value streams made up of a portfolio of products. In our 2022 survey, 90% of organizations that have conducted operational value-stream mapping have not done so for all of their delivery teams. For small to mid-sized organizations, mapping progress is slower than it is for large organizations.
In conclusion
While each organization’s journey is different, successful agile transformations have repeatedly shown the importance of teams excelling on these five dimensions. Doing so, allows companies to adapt faster in the market, remaining competitive and fiscally sound no matter the scenario.
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