Cross Functional Autonomous Teams With Technology At The Core … New Organizational Strategy (Part 3)

Background: This is the third part of a five part series for business leaders and strategists interested in digital transformation. In Chapter 1, I proposed that digital is a way of being that exists at the confluence of customer obsession and organizational agility at scale, enabled by cross functional, autonomous teams with technology excellence at the core. Chapter 2 explored the first key principle of what it means to be digital : customer obsession. This chapter focuses on ‘doing’ through cross functional, autonomous teams.

Chapter 3: Principle 2— Cross Functional Autonomous Teams with Technology at the core

During a recent client engagement with a large asset management firm headquartered in NYC, I witnessed first hand how technology could end up being misused by a narrowly focused internal technology team.

The digital team of the company’s IT division declared victory on better client relationship management experience for their internal sales force by installing an enterprise grade CRM tool. They had spent 16 months and a good chunk of their talent time to get this tool in place and migrate the existing data. However, on spending quality time with the sales people on-ground for few weeks, it was clear to us that salespeople in the firm didn’t use the CRM tool to make any kind of meaningful decisions in their day-to-day work.

Siloed teams with different incentives fosters different measures of success

It was not hard to see the dichotomy on how the IT team and its internal customers defined success. Soon the business side of the company brought in experienced digital consultants with expertise in lean product innovation to find how to create a better product development process as the CRM tool was a wash.

What did the consultants find?

Salespeople used a bunch of different tools — news sites, homegrown CRM tools, LinkedIn, Facebook, Eventbrite, Google Calendar, and many apps to research / qualify their prospects, build relationships, close deals and nurture existing client relationships. They used the multi-million dollar CRM platform to retrieve and record information only when necessary. So while there was a genuine need for storing operational sales data for better sales management and reporting for higher-ups, the tool itself didn’t improve the overall outcome of the sales team.

Early experimentation with click through prototypes also revealed how the the sales people discover, consume, and share data and insights in different ways — 30 days, 7 days, and 5 minutes — before meeting a prospect or a client or hosting an event for investors. The cross-functional consulting team with experienced technologists created a custom mobile application prototype that provides relevant data and insights to the sales people based on their context of use rather than soaking them with an irrelevant data shower.

While the internal team had been busy at installing the high budget CRM tool for a year and a half, a cross-functional team composed of business strategists, service designers, prototype experts, and programmers were able to find and validate user needs and wants and create a clickable prototype within only 12 weeks — one week at a time.

Not having the right skills in your team fosters excuses for bad results

The internal team had only two IT programmers and one project manager, none of whom had the required skills or capacity to create and run rapid experiments and validate hypotheses at scale — resulting in multi-million dollar spend on the CRM tool that didn’t gain customer adoption. Additionally, they were afraid to challenge the decision made by executives higher on the food chain about buying a piece of software that may be helpful but not relevant.

A good strategy implemented badly is as damaging as a lousy strategy implemented well. — a pragmatic strategist

While leaders of many large firms may have recommitted their focus on delighting customers, it’s not surprising to see them fail in their strategy implementation. So, even if a large too-big-to-fail bank mentioned in Chapter 2 identifies an untapped opportunity to create a digital platform for their customers scouting for new homes, it’s nearly impossible for them to go to market with the new concept in less than a 16–20 months. They are too siloed to get anything going fast. By that time another competitor or an upstart would have beat them to it.

Based on conversations with business leaders and senior product strategy consultants with years of experience in multiple domains, I’m sure this is a common scene not only in large asset management services firms but in healthcare, private banking, travel & hospitality, and education.

Can you imagine being innovative here?

In large traditional organizations, different departments are creating siloed teams in their pursuit of digital that are fearful of making decisions, or taking actions and have little to no discretion to modify the solution handed out to them from the top. The existing multi-layered hierarchy and the associated hubris of bureaucracy suck out every bit of productivity and innovativeness from these teams. They are not empowered to hire for skills and talent missing in their capability toolkit and are always expected to look for permission rather than forgiveness.

Such teams are set to fail.

Networked Teams Are Here

Deloitte’s survey of 7,000 global business leaders reveal that 92% of the companies believe “redesigning the organization is very important or important.”

Business leaders realize that the days of top-down hierarchies are disappearing faster. The best way to thrive in the 21st century is to create interconnected, networked teams who are empowered to take on ambitious missions. Such teams can act and react rapidly avoiding bureaucratic red tapes that lead to inevitable delays.

Graphic taken from Bersin by Deloitte

AirBnB created such a cross functional and autonomous team composed of product managers, designers, engineers, and data scientists when it decided to expand services to Cuba and be a prominent hospitality player in the new market. Within two months, this team was able to set up the infrastructure needed to land and expand in this new geography. These kind of interdisciplinary product teams within AirBnB have no room for prima-donnas and everybody enjoys the same sense of ownership of impact across different disciplines (data, design, engineering and product). Such teams are created for a specific mission and disbanded when the mission is achieved.

Couple of years back, the Xbox team successfully showcased why is it important to have a cross-functional team of people who understands not just game technology but also brand and industrial design to create a holistic customer experience.

Three key attributes that demand shift in how organizations think about team structures

Many traditional product-service companies in many ways are now trying to emulate the startup attributes — bias for action, extensive cross-functional collaboration across the end-to-end value stream, adoption of well-understood risk, creative energy and rapid experimentation. And that is not just a person or a group’s job. This cannot be done just by your marketing department or research wing or your IT alone. None of them alone have the horsepower and the talent to implement something as cross cutting as digital.

Cross-functional autonomous teams who are empowered to solve problems and not just implement solutions are an essential ingredient to win the digital war on innovation. Such teams are self-directed and own the responsibility to determine how to solve problems within the constraints defined by business leaders who are obsessed about customer purpose. With such teams you can confidently “push decisions to where the information is” resulting in faster execution at the edge creating rapid feedback loops and faster time to market for products better suited to customer needs.

Do you have cross functional teams on your ambitious missions?

Learn more about digital transformation from Part 1 and Part 2, Part 4 of this five part series.

Feel free to reach back with comments and suggestions.

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