When transforming your organisation, who should lead your value streams?

Many times in my career, I’ve had the chance to experience exactly the kind of transformation that’s so often talked about: re-shaping a team into journey-focused value streams (or squads, themes, or whatever term you prefer). And in the process, I’ve repeatedly witnessed a decision-making process that confuses and confounds me.

Let me set the scene.

Moving from more traditional waterfall (or even Agile) delivery structures to something that focuses deeply on engagement or ROI can be a real jolt, not just to an organization’s operations, but to its culture. It often leads to a flurry of activity, as teams develop new workflows and processes, and re-shape their operating models, often migrating from centralised to distributed teams.

This process often uncovers both gaps and overlaps in capability, and helps to clarify roles and responsibilities within teams. In many cases, headcount is rebalanced to ensure parity between product, design and development.

Value streams encompass end-to-end journeys, in order to ensure that thinking is done from a strategic level through to granular delivery (and post-delivery optimisation). Value streams contain fully multi-disciplinary capabilities, which have often been federated or distributed from previously centralised teams.

From my point of view, these multi-disciplinary teams should be led by Product Directors with digital product management and ownership experience. These directors should understand and own the P&L within the organisation for the journeys they oversee. Crucially, they must also be able to manage the “tension” that inevitably develops between the oversight and management of the value stream, and business stakeholders whose business areas are impacted (and enhanced) by work delivered in the value stream.

So where my confusion sets in…

When this kind of transformation begins in an organisation, why do organisations often pick executives from different areas of the business (sometimes digitally experienced, oftentimes not) to act in the capacity of Product Directors (or Responsible Execs, Sponsors, etc.) of the value streams?

There are many likely answers to this question. Here are a few I’ve observed:

• Often, those initiating the transformation don’t fully understand the mechanics of what they are getting themselves into . They know they need to “transform” the way they work , but don’t grasp the logistics of the journey they are beginning
• There is often a reticence to hire new Product Directors, either due to budget constraints, or a failure to understand the necessity of having professional capability to help shape the value streams.
• Members of leadership teams often jockey for position to lead a value stream, because for them it is a potential vehicle or stepping stone to higher-value leadership roles . After all, where they are given OKRs, performance metrics, P&L, targets, or some other measurable responsibility, there is a sense of being “mini-MDs or CEO’s” of a revenue-generating area of the business.
• The C-suite wants forward progress, and giving responsibility for a value stream to an existing executive or leader from another business area is seen as a way to jump-start the process.
• There is a genuine belief that only someone who already works in the business has the capacity to understand and manage the value stream, even when they have never managed a digital product function containing multi-disciplinary teams.
• These leaders already exist, and they manage functions and capabilities — so why couldn’t they also act as Product Directors of a digital, multi-disciplinary team?

There will be many other answers to this question. If you’ve experienced this kind of transition into a new model, much of the above will resonate, and other things will pop into your head…you will struggle with your own conundrums around how these things happen.

Sometimes these individuals succeed. The journey can be long and arduous, and both their primary function (as in most cases they retain their former roles as well) and their function as Product Director may be diminished. The learning curve is steep. The benefits in the first 6–12 months are often significantly lower than they would be if someone with this experience had stepped into the role and worked with the exec as a stakeholder.

The reality, of course, is that often these individuals don’t succeed. Their primary roles suffer, and they lack the deep experience required to run a multi-disciplinary digital product, design and delivery function. They don’t understand the roles, let alone the ways of working required to ideate, design and build successful digital products and services. They are impatient : there is often a premise that digital products and services can be fully delivered in a short period of time, and they don’t understand why the process delivers MVP iterative slices over longer periods of time. They are not technologists. They are not designers. They don’t understand having to prioritise one thing over another on a constant basis — they want it all now . In their old roles, they blamed digital teams for slow pace or missed delivery . Now that they are part of that ecosystem, they don’t fully accept that this is the case, and they create an us/them dynamic within the very teams they are responsible for managing.

It’s complicated. Naming an existing exec to cover a Product Director role doesn’t create a Product Director, it creates an exec with an additional set of responsibilities . But a value stream really requires the full-time, dedicated focus of an experienced Product Director , not someone playing at the role.

So how should organisations approach this issue?

There are things they could do to mitigate some of the issues. These include:

1. Draft a formal Product Director role, with full responsibilities, experience and expectations.
2. Identify senior people in the organisation who have experience in some or all of the functions required to run a specific value stream.
3. Interview these individuals as you would interview external candidates — identify their strengths and weaknesses up front.
4. Select individuals who show the most aptitude for the role.
5. Develop an induction program for execs (or senior leaders) who are selected to lead your value streams.
6. Identify non-competing organisations who have been through this kind of transformation, and arrange for your execs to spend time with a mix of deeply experienced Product Directors and other execs who have successfully made the transition — they should know what is expected of them.
7. Provide a framework of coaching and mentoring . If you have a CPO, they could mentor these individuals. If not, consider bringing someone in who can provide regular sessions that enable continuous learning and feedback for those who take on these responsibilities.
8. Find a way to lessen their other responsibilities over time.
9. Recognise from the start that there are trade-offs in this kind of arrangement, and be open and honest about them . You may not get the kind of product delivery you had forecast, but you are building more digitally enabled execs.
10. Take a cue from the fail fast mantra. If repurposed execs are not able to adjust to their new roles, make the decision early and bring in more experienced Product Directors, who can help uplift the execs as they continue holding dual responsibilities.

Ideally your digital products and services are your sole reason for existing. These generate your revenue and determine how quickly you can deliver them, and they define the level of experience and usefulness felt by customers, which will determine how successful you are.

It may seem like a good idea to propose an exec takes on this responsibility, but it also has drawbacks, and you will not get consistent levels of experience and delivery across your value streams. Consider the importance of this role in the context of delivering efficiently, timely, usable and desired products and services, and the impact that steep learning curves may have on your revenue forecasts.

There is no magic bullet for delivering success in these roles. But there are ways to mitigate known points of failure. Taking some of the steps outlined above can help you create a better environment for your execs to succeed in their new roles. The rest is up to them.