The why and how of becoming a product-driven enterprise - Part 3

How to break silos and improve value-delivery?

In today's fast-paced business world, delivering value at the speed of digital lightning to customers is paramount. However, functional silos within organizations are the strongest impediment to this efficient delivery of value. Communication across silos is often difficult, and hand-offs and delays can slow down the development process. Political boundaries can also prevent cooperation, and process optimizations are often local and don't affect the overall speed of value delivery. Functional silos can make it hard for organizations to deliver value effectively.

To overcome functional silos, it's important to draft products that cover the whole value stream. This means connecting the silos along the flow of value and breaking down barriers to communication and collaboration.  

The way to tearing down the walls

Let’s have a look at what it takes and what helps us to get rid of these silos and align our organization along the flow of value in products instead. This is a huge task, but there are some proven steps that help you break down existing silos and recreate a value-flow aligned organization.

Identify the value flow: The first step in realigning your organization from functional silos to product-aligned value streams is to identify the value flow underlying the products you deliver. This is a crucial step, as it enables you to understand how value flows through your organization and where the bottlenecks and delays occur. To identify the value flow, you may need to analyze your customer journey, product roadmaps, and value proposition. You need to ensure that you have a clear understanding of what customers value and how your organization delivers that value. By doing this, you can establish a common language and also develop a shared understanding of the organization's goals.

Map the value stream: Once you have identified the value flow, you need to map the value stream. Mapping the value stream involves documenting the current state of the value flow, including the people, processes, and technology involved in delivering value to customers. You need to be as detailed as possible in your mapping exercise, ensuring that you capture all the steps involved in delivering value. The value stream map should be a living document that is continuously updated as you make improvements to the value stream.

Understand existing functional silos: The next step is to identify the functional silos within your organization. This includes both formal and informal silos that exist within departments or teams. You need to understand the barriers to communication and collaboration across these silos. This can be achieved through various interviews, surveys, and observations. You need to identify the root causes of silos and understand how they impact value delivery.

Define product-aligned value streams: Once you have identified the functional silos, you need to define product-aligned value streams. This involves breaking down the silos and designing your organization around the value flow underlying your products. You need to ensure that each value stream has a clear value proposition and customer segment. This will help you to focus your resources on delivering value to the right customers at the right time.

Establish cross-functional teams: To enable collaboration across functional silos, you need to establish cross-functional teams. These teams should be organized around product-aligned value streams and should include representatives from each functional area involved in delivering value. Cross-functional teams should be empowered to make decisions and should have clear goals and metrics. By doing this, you can ensure that everyone is working towards a common goal.

Implement agility: To improve the speed and efficiency of value delivery, you should consider implementing agile methodologies. Agile emphasizes collaboration, rapid iteration, and continuous improvement, which are all essential for product-aligned value streams. By adopting agile ways of working, you can improve the quality of your products, reduce time to market, and increase customer satisfaction.

Foster a culture of collaboration: To sustain the realignment of your organization, you need to foster a culture of collaboration. This includes promoting open communication, encouraging knowledge sharing, and recognizing and rewarding cross-functional teamwork. You need to ensure that everyone in your organization understands the benefits of collaboration and feels empowered enough to work collectively towards a common goal. By doing this, you can ensure that your organization is aligned around the value flow underlying your products and is focused on delivering value to customers.

Wrapping up

Functional silos within organizations can impede the efficient delivery of value to customers in today's fast-paced business world. To overcome these silos, it's important to identify and map the value flow, understand existing functional silos, define product-aligned value streams, establish cross-functional teams, implement agile methods, and foster a culture of collaboration. By doing this, you can ensure that your organization is aligned around the value flow underlying your products and is focused on delivering value to customers.  

So, act today and start breaking down those silos to improve your organization's value delivery!

Examples of successful product-driven organizations

There are many examples of companies that have been able to successfully implement a product-driven approach. For example, Spotify's product-driven culture has enabled it to develop a highly personalized music streaming service that satisfies its users' needs. Airbnb's product-driven approach has enabled it to disrupt the hospitality industry by providing a unique and personalized travel experience. Tesla's product-driven approach has enabled it to be ahead of the curve in electric vehicle innovation and sustainability.

Conclusion

In conclusion, becoming product-driven is essential for organizations that want to compete in today's market. By adopting a product-driven approach, companies can accelerate time to value, satisfy customers early, test innovative ideas quickly, save costs, and focus on outcomes. Product managers play a significant role in driving the success of a product-driven organization, and overcoming functional silos is crucial to connect the value stream. By looking at successful examples of product-driven companies, organizations can learn valuable lessons and take steps towards a more product-driven approach.

This article is the final part of our 3-part series of blogs on becoming a product-driven enterprise. To read the other blogs of this series, check out these links:

• The why and how of becoming a product-driven enterprise - Part 1: From being reactive to innovative
• The why and how of becoming a product-driven enterprise - Part 2: What does the product's CEO do?

As an ICAgile transformation member, Nagarro offers a Product Management Masterclass that explains how to become a product-driven enterprise. Find out more!