Data-Driven Product Management: How Your Business Profits

In navigating new, unprecedented change, disruption, and fluidity, teams simply can’t rely on guesswork and second-hand interpretations. To succeed, teams need to embrace data-driven product management. Data needs to be leveraged across every level and every team in the business, which is essential in powering more people to make better decisions and deliver more value. This post examines why data-driven product management is now so vital.

Navigating Current Markets: Three Imperatives

Today’s leadership teams are being tasked with navigating business terrain that’s seeing unprecedented volatility. Radically changing market dynamics and consumer behaviors and high unemployment are raising concerns about revenues in the coming quarters, and about fundamental disruption to the competitive landscape in the long term.

In this new paradigm, executives are especially keen to demonstrate value. It’s increasingly incumbent upon them to move beyond simply listing tasks and deliverables, and start demonstrating how their contributions are helping the business navigate change and thrive. To meet their charters, leaders will need to find ways to make significant strides in the following arenas:

  • Customer and business alignment. To build business strength and value, it’s essential that teams are laser focused on doing the right things. In this effort, it’s essential that, for every significant effort, they’re constantly assessing, “Why are we doing this?” and “Is it valuable?” Amidst the current turmoil, it can be a great time to rethink assumptions, review strategies, and determine what customers really most value.
  • Speed. Once the right deliverables are identified, time is of the essence. While speed has long been important, there’s an entirely new level of urgency for how fast things have to get done. It’s more critical than ever to be bringing the right mix of offerings to market, and to do so fast enough to make a difference to customers and in the business’ trajectory.
  • Quality. Currently, around 67% of companies are competing on customer experience. Back in 2010, that number was 36%.1 More than ever, delivering the right experience every time is essential.

Where do you start? Which is most important? The answer is “all of the above.” All three of these aspects are critical. While there may have been a time when an executive could stay focused on improving a single attribute, that time is not now.

Teams may have been focused on accelerating delivery, but if it introduces compromises in quality, speed may do more harm than good. Further, speeding up teams won’t matter without strategic alignment. If teams aren’t building the right things, it doesn’t matter how fast they build them. Put another way, all the automation in the world won’t make your strategies right.

The Problem: Waste, Inefficiency, and Misalignment Impeding Progress

While the need to gain optimal alignment is vital, statistics show many teams are falling short:

  • 78% say the disconnect between IT and business units results in significant costs.2
  • 70% agree that agile and DevOps can provide project-level improvement, but report those benefits are negated by a lack of enterprise alignment.3
  • 78% fail to scale and sustain their digital transformation, and 73% of enterprises fail to realize sustained returns on their digital investments.4

This lack of alignment significantly increases the potential for wasted time and money. Too many projects don’t ultimately deliver value. Every day, $5 billion is wasted due to the poor implementation of strategy.5

Where is all this waste originating? One common problem is that organizations are bearing the burden of so-called zombie or orphan projects. An executive sponsor leaves the organization or loses interest in a project, but the project remains in the backlog. Significant resources get expended, but the project may not see the light of day, or worse, gets completed but never gets fully implemented or used. Either way, a lot of resources are invested in projects that never deliver any real value.

This waste has long been a problem, but it is one that is currently being exacerbated by increasingly fluid personnel dynamics. Many organizations are having unprecedented flux in their leadership teams as, with increasing regularity, executives are being offered early retirement, moving into different departments, or joining other companies.

The Cause: Data is Lacking

As leaders look to weed out waste and optimize their strategies, they’re stymied by their organization’s means for tracking work. For the most part, teams are still building status reports based on accounts from meetings and manually aggregating reports into higher level summaries.

These approaches present a number of problems:

  • First of all, these tactics are costly. Within larger enterprises, tens of millions of dollars can be spent simply on manual data rollups. In fact, I spoke to an executive at a Fortune 250 financial institution that was spending approximately $100 million every year on rolling up reports.
  • Second, these rollups yield inaccurate, out-of-date data. By the time a typical report makes it to the right executive, it is typically three weeks old and has been sanitized multiple times.
  • Third, these approaches result in a lack of data that leaves a gap in decision making. Without timely, accurate data, executives resort to hunches, guesswork, and opinions. When decisions are largely subjective in nature, efforts get prioritized for the wrong reasons. For example, when conducting executive workshops, I hear virtually every executive attending say that, very often, it’s those executives that voice their preferences and requests in the loudest manner that end up getting their projects funded. Without data to inform decisions, strategies are ill informed and poorly aligned with high-level objectives and customer preferences.

Data-Driven Project Management: Requirements

In speaking with enterprise executives, I’m often asked the same question: “How can we do more with less?” My response is always the same: Today, that’s not the right question.

Instead, leaders need to determine how they can get their existing teams to start doing less—and ensure that they’re only focused on the highest value things. The question needs to be, “How do I get teams to do the right things, focusing only on the highest value projects and deliverables?”

The answer? In a word, data. To start to ensure that teams are focused on the right efforts, data-driven product management is essential.

To start employing data in a way that empowers teams to focus on what really matters, it is important to pursue the following efforts.

Harness Data, Not Reporting

Over time, teams have continued a transition, moving to break annual strategies into two-week sprints. In the process, teams are increasingly generating a pipeline of data. Rather than relying on verbal status reports and manual report aggregation, teams need to start tracking progress based on this data.

Apply Data Automation to Boost Efficiency

It is key to harness this data, as quickly and efficiently as possible, which is driving the need for automation. Through automation, teams can eliminate laborious status reporting, costly rollup efforts, and time-consuming status meetings, while getting improved data to fuel optimized operations and decision making.

Track Data From Across the Entire Value Stream

To combat waste and identify opportunities for optimization, it is critical to gain visibility into the entire value stream, all the steps involved in getting from an idea to an outcome, or from concept to cashflow. It is only when you understand every step in the process that you can identify bottlenecks and waste and start to streamline workflows from end to end. (To learn more about modeling and tracking data across the value stream, see my Lean Portfolio Management post.)

Further, it is only by establishing this holistic transparency that executives can prevent work from being done on those wasteful orphan and zombie projects. It is important to monitor whether project sponsors are still with the company and each specific effort remains aligned with business priorities. Once this visibility is established, executives can quickly and intelligently weed out waste associated with non-strategic work.

Intelligently Disseminate Data Across the Organization

It is also vital to establish capabilities for disseminating data across the organization, while tailoring visibility to specific roles. To reference a recent article on the Forbes Tech Council site, artificial intelligence (AI) and machine learning technologies will offer enormous advantages, but only when teams across the organization can harness those technologies. In the article, entitled, “Leading Confidently Through Crisis: How Data-Driven Decision-Making Can Help,” Serge Lucio, GM of Broadcom Enterprise Software, writes, “The collective intelligence that AI and machine learning technologies afford is immense. However, the power of these instruments is ultimately measured by the degree to which people actually interpret, understand, act on, and share the insights delivered.”

Data needs to be available at every level of the organization, including for teams, directors, and vice presidents, with dashboards and reports that are tailored to an individual’s specific level, role, and permissions. It is vital to ensure the right information is offered to the right person, so the intelligence gleaned is actionable. I remember meeting with a director of a large team who showed me how he was receiving alerts whenever a build broke. However, aside from potentially taking the counterproductive step of chastising a responsible team member, there wasn’t any actionable information the director could take away. Simply having more data doesn’t translate to better insights. Therefore, it’s vital to think through the purpose behind the delivery of data and the expected actions that can be taken.

Advantages of Data-Driven Product Management

By moving from a status report- to data-driven approach, organizations can benefit in a number of ways:

  • Empower more decision makers. By providing the right data at the right level, decision making can be improved, and it can be pushed down within an organization. When tradeoff decisions need to be made, such as having to choose between the number of features and speed to market, managers can leverage data to make better decisions. Once teams are thus informed, they can more intelligently turn the dials of performance based on evolving customer requirements, competitive threats, and business objectives.
  • Build transparency and trust. When leaders can effectively track and visualize team progress and effectiveness, it can help boost trust across the organization. With the right visibility, managers can spot a problem, create an action plan to get back on track, or present tradeoff decisions to upper management. Therefore, they’re following up in a proactive, constructive way, rather than waiting for an angry call from the director. Similarly, a director can spot a problem and address it, before the vice president needs to get involved.
  • Boost strategic alignment. With accurate, timely data, teams can more effectively bridge the gap between annual, top-level strategies and two-week sprints. This visibility enables business and IT staff to visualize all the work being done, and better collaborate to reach common goals. Executives can institute a digitized equivalent of a leader board, helping motivate and empower staff members to advance top level objectives, and foster a feeling of comradery throughout the organization. Ultimately, leaders can help engineering and IT teams better understand how the work they’re doing affects progress towards top-level strategies.
  • Improve effectiveness. Ultimately, data can fuel enhanced decision making, and improve predictability and prioritization. These capabilities help teams improve their ability to release the right offerings, at the right time, to the right audience.

Conclusion

Success today requires precision. Waste, inefficiency, and redundancy, while never a good thing, are now particularly disastrous. Teams need to be working on the right things, at the right times, and in the right ways. Rather than relying on out of date, time consuming manual accounts and roll ups, teams need to leverage timely, accurate data to establish the precision required. 

1. Gartner, “Key Findings From the Gartner Customer Experience Survey,” March 16, 2018, Chris Pemberton https://www.gartner.com/en/marketing/insights/articles/key-findings-from-the-gartner-customer-experience-survey

2. Harvard Business Review Analytic Services, in association with Broadcom, “BizOps: Connecting IT to Business Outcomes,” June 2020

3. Harvard Business Review Analytic Services, in association with Broadcom, “BizOps: Connecting IT to Business Outcomes,” June 2020

4. Everest Group, “78% of Enterprises Fail to Scale and Sustain Their Digital Transformation Initiatives,” https://www.everestgrp.com/2018-08-78-enterprises-fail-scale-sustain-digital-transformation-initiatives-everest-group-says-old-school-operating-models-blame-press-release-46192.html/

5. Brightline Project Management Institute, “The Brightline Initiative is closing the gap between strategy design and delivery,” February 11, 2019, https://www.brightline.org/resources/the-brightline-initiative-is-closing-the-gap-between-strategy-design-and-delivery/