What If We Are Going in Different Directions?

In my recent article, “Banking 2.0 — Why CPOs Matter?”, I discussed the emerging role of Chief Product Officers in the digital banking landscape, examining their potential impact, balancing responsibilities with Business Line owners, and suggesting relevant KPIs for success. Sparked by a thought-provoking query from a reader, I’ve felt compelled to expand on this subject.

The reader shared, “Our fintech company, comprising multiple divisions, often struggle with disjointed objectives between the Business and Product units. While our business aims to enhance revenue, roll out novel products, and optimize client satisfaction, our Product unit seems more engrossed in ensuring compliance and resolving internal tech debts. What’s the anomaly within our organization?”

I empathize deeply with such concerns. However, the silver lining is that these issues can be remedied. Often, this dissonance stems from two fundamental discrepancies:

1. Lack of Unified Objectives
2. Misaligned Prioritization Mechanisms for Product Development

Lack of Unified Objectives

Having a clear and shared goal is essential for a company’s success. Today, most businesses set these goals through Quarterly and Annual OKRs (Objectives and Key Results). This framework has gained popularity as it allows for measurable outcomes that move the company towards its mission.

Every department should chip in with Key Results, supporting the leadership's broader objectives. However, issues surface when:

1. Too Many OKRs: If a company sets too many OKRs, it can spread its resources and attention thin, leading to lesser focus on pivotal goals.
2. Contradictory OKRs: Sometimes, OKRs can contradict each other, causing confusion and misdirection within teams.
3. Absence of OKRs: Without any OKRs, teams might operate in silos without clearly understanding the company’s primary mission.

A Brief Overview of the OKR Framework:

• Objectives: These are qualitative, inspiring, and challenging goals that give direction to the organization.
• Key Results: KRs are specific, time-bound, and measurable actions that guide teams on achieving their objectives.
• Alignment: One of the main advantages of OKRs is that they ensure everyone is working towards the same objectives, thus creating a unified direction.
• Regular Check-ins: Teams review their OKRs regularly to assess progress, address issues, and recalibrate if necessary.
• Transparency: OKRs are often shared openly within the company, fostering a sense of collective ownership and understanding.

When implemented correctly, OKRs can be a powerful tool to ensure that all departments align with the company’s vision, especially in a constantly changing market.

Misaligned Prioritization Mechanisms for Product Development

Drawing from my previous piece on Prioritisation frameworks and roadmapping, effective prioritization mechanisms must be comprehensive yet precise. Three fundamental rules must be adhered to:

1. Universal applicability across departments, extending beyond just Product Development, ensuring a holistic company approach.
2. Mandating all significant* projects, whether externally or internally oriented, to undergo rigorous prioritization scrutiny, safeguarding time and resources. (*significance is usually set as a threshold of effort to complete)
3. The roadmap must be dictated by the prioritization model, with a minor 5% exception allowance approved by senior management.

Crafting an Effective Prioritization Model

Prioritization is pivotal in steering an organization towards its larger goals. However, the key lies in understanding how to do it right. Based on the insights you provided, here’s a more detailed approach:

Components to Weigh In:

• Business Value: Look into potential revenue, profit, and other financial metrics that a project could bring in.
• User Value: Gauge how much more satisfied or benefited a customer would feel after the project’s execution. It’s essential to ensure customer-centricity in the product roadmap.
• Operational Efficiency: Determine how much the company could save internal costs by automating processes or streamlining workflows.
• Risk Mitigation: Understand the consequences of not meeting specific regulatory requirements or potential vulnerabilities and how a project addresses them.

Complexity Assessment:

• Use a scale of 1 to 5 to evaluate project complexity. This should give an idea of the required resources, time, and effort.
• It’s crucial to compare projects relative to one another, similar to the approach in Scrum grooming sessions. This relative estimation provides a clearer view of where to allocate resources.

Iterative Review and Refinement:

• After the first round of calculations, you might notice some discrepancies or areas of improvement.
• Don’t hesitate to modify the formula or the variables. Add new components if they align with the company’s direction or remove ones that seem less relevant.
• After refining, if the model still requires more than a 5% score override, it might be a sign that further calibration is needed.

Case in Point:

• I recall an instance where this model was applied across ten product teams in a company. Some dev teams came up with product dev ideas that scored low on the prioritization scale. Given the required effort, these ideas wouldn’t significantly impact the company’s objectives. Meanwhile, other teams had high-priority projects but lacked the manpower. The solution? Temporarily reallocating resources from the lower-impact teams to those with high-priority projects. This flexible approach ensures the company’s entire force is geared towards its most pressing goals.

Remember, the goal of this prioritization model isn’t just about scoring projects but aligning them with the company’s overarching objectives.

In conclusion

Aligning business and Product Development units requires more than just robust communication; it demands a shared vision and unwavering commitment to unified goals. By adopting systematic prioritization techniques and fostering an environment of continual review, businesses can mitigate these alignment challenges, ensuring harmony in direction and purpose.