Part of the Product Management Facts Series
Earlier this year we conducted research into the dynamics of product team performance. As part of this research we asked a question about the mechanisms being used by executives to drive alignment across the core product team.
For the purposes of the study we defined “core team” as being composed of product, project, and program managers, business analysts, product owners, brand managers, engineers, and product design professionals.
The question we posed was “In which of the following ways does your organization support aligning members of a core product team?” Global respondents were offered five choices.
- Strong executive support for the core product team
- Shared organizational goals and objectives linking the team
- Bonus compensation linked among core product team members
- Product production process mapped so that all the team members understand their role and handoffs
- None of the above
Based upon the responses there are three mechanisms that are commonly used to achieve alignment and one that is used less frequently.
The most common response (31%) was shared organizational goals and objectives linking the team. In other words, a reliance upon the good will generated by shared goals and objectives that reach across the respective functions in order to drive improved alignment. In actuality though, we often see mixed results using this mechanism as the primary driver of alignment.
While this mechanism can work, it can also be trumped by the “functional” goals and objectives of the department an individual reports in to. In essence, individuals often choose between which of these goals are more important – the functional or the cross-functional – based upon their perspective of which is most important.
The second most frequent response was strong executive support for the core product team at 25%. Active executive engagement with the product team can be an effective way to ensure product team alignment. This mechanism can quickly surface resource issues, functional versus cross-functional conflicts, and a variety of other challenges that can undermine the teams alignment and ultimate success.
The third response was mapping the product production process so that all team members not only understand their role but the handoffs (20%). This is an effective way to ensure tactical alignment across the entire product team. Many organizations do not have a clear definition of product management’s role and responsibilities (we see it all the time!) and don’t take the necessary steps to map out how all the roles fit together. This is important as the product moves through the various production steps (from conception to ultimate retirement).
The fourth response is a controversial one. Approximately 6% of organizations report that they use bonus compensation stretching across all the various team members to drive performance. In other words, pay for performance linking the cross-functional team members to a common goal. The reason I mentioned that this is controversial is that opinions vary widely about the effectiveness of this approach.
The camp that is against the pay for performance approach commonly site a Harvard study that points out that this approach is ineffective. The pro camp states that putting “at risk” compensation at the center of alignment drives increased focus on the cross-functional goals as opposed to the natural bias of individuals to lean toward the functional goals (and the person they report into). In our experience we’ve seen bonus compensation work but it needs to be carefully thought out to ensure it’s an incentive and not a disincentive!
Finally, almost 18% of organizations report that they use none of these mechanisms to drive alignment! Presumably, this means that these organizations are operating solely based upon functional goals to the detriment of the team.