Alignment
Reviewing and signing off on business cases ensures that the features being developed are aligned with the business goals. But the business case process is slow and it locks in solutions before they have been validated. We need a way of ensuring that the teams are aligned with the business goals without the drawbacks of the current process.
Misalignment can cause brand and financial damage
Everyone hates sitting in the middle seat on an airline. But airlines can tackle this problem in different ways. A budget airline might allocate people a middle seat unless they paid to choose a different seat whereas a full-service airline might offer a fare which guarantees that the middle seat will be left free.
Even though both solutions tackle the same problem, implementing the wrong solution could cause brand and financial damage.
Business Metrics
We want our product features to achieve our top-level business goals but revenue and cost metrics are often too far removed from the work of individual Stream Teams to be a useful guide for making product-level decisions. We need to break the business goals down into more Product specific strategies and objectives.
In addition to the pure metrics we also need to ensure that the product is aligned with the wider business strategy. As highlighted above there are features that can deliver short-term revenue and cost benefits but which can damage the brand and long-term financial performance.
Translating Business Metrics to Product Metrics
Product Teams act as a translation layer from the business goals to the Stream Teams. They identify the product metrics that they believe will achieve the business goals and then work with the Stream Teams to agree on the targets for each of the defined metrics. By making the goals more tangible and product behaviour driven the Stream Teams can get the quick feedback loops they need when developing new features to ensure that the features are achieving their goals.
Sharing Context
The Product Team is also responsible for sharing the context behind the business goals and the product metrics with the Stream Teams so that teams build features that align with the business strategy. This is achieved through three core artifacts: the Product Vision, the Product Strategy and the Annual Plan.
Product Vision
The Product Vision is how the company perceives the product 5+ years into the future. Given that there is a lot of uncertainty related to the technology that far into the future the vision should focus more on the user experience and how the product makes their life better. The purpose of the Product vision is to inspire the teams to innovate towards the goals.
Product Strategy
The Product Strategy is how the company plans to achieve its vision. The strategy should be more tangible than the vision and should be focused on the next 1-3 years. The strategy should describe the markets that the product will compete in, the customer segments that the product will target, the product differentiators and the business model. And key to any strategy is a description of the areas that the product will not compete in and why.
Annual Plan
The Annual Plan is focused on the key activities that teams will focus on for the next 12 months. The goal of an annual plan is to ensure that teams focus on the right areas to achieve the strategy. However traditional annual planning processes have a number of drawbacks: they merge targets, forecasts and funding into a single process. This leads people to lowball their forecasts and sandbag their targets to ensure that they get the funding they need. The information imbalance between the teams and management means that funding is often allocated based on political prowess and negotiating skills rather than need.
In ZeroBlockers we separate targets, forecasts and funding into separate processes. Annual planning is solely focused on the targets that teams need to achieve in the year ahead. One benefit of taking a longer view is that it helps align teams on the risk appetite of the company. If the company is focused on growth then the targets will be more aggressive than if the company is focused on stability.
Aligning on how to work
Aligning on what to build is only half of the challenge. We also need to align on how we work. ZeroBlockers shares a framework for how teams should work as well as a vision: zero blockers from idea to satisfied customers. Product Teams are responsible for helping Stream Teams to implement the ZeroBlockers framework.