As companies get bigger they often get bloated, slow, and lose the ability to deliver new value, quickly.
During times of market volatility, this kind of inefficiency can not continue. Speed, agility, and efficiency need to be restored to exit a downturn with accelerated success and growth.
But what are the key mistakes these companies make that lead to a breakdown of meaningful value creation and innovation and speed?
Here are 7 common deadly sins...
Poor context setting by the leadership team
Before any group of people can make good, well-aligned decisions, they first need to be on the same page. The larger the group gets, the more explicit, and well-articulated the shared context must be.
There are many forms of shared context. These include cultural values, definitions of what "great" looks like (for people, products, and processes), a vision for where the company is going, and more.
Many companies fail to create these (or fail to create good versions of them) and share them with the whole company.
Poor operationalization of shared context
In many cases, shared context documents are developed, but they are not integrated into the day-to-day operational cadence of the business. Onboarding, hiring rubrics, performance reviews, planning cycles, day-to-day meetings, and everyday decisions fail to use the framing and vocabulary of the cultural values, definitions of great, product principles, etc
Poor planning
Plans from leadership tend to be either a) too high-level or b) too tactical.
Plans that are too high-level leave too much room for ambiguity and don't help the team make tough tradeoffs. Things move too slowly and/or do not align to create meaningful short-term value.
Plans that are too tactical stifle innovation, decision making, and parallelism at the edges. Product managers and other leaders start acting as messengers instead of taking full ownership of their areas of responsibility. Good decision-making does not scale.
Poor org structure
Broadly speaking, there tends to be two bad ways that teams are organized.
a) Teams are split by function rather than by purpose/problem/mission. Product, design, engineering, and other key functions sit in silos that don't interact well together. Tribes form and collaboration stalls.
b) Teams are grouped into cross-functional squads, but the missions of squads are poorly designed such that there are too many cross dependencies between them. Clear lines of full-stack ownership are never fully established.
Poor role design and ways of working
Rather than build a better team, companies tend to hire more people in more specialized functions to compensate for the weaknesses of their existing team.
This ultimately diffuses accountability and adds communication overhead to everything. It slows everything down. It makes it hard to hold people accountable.
As a clear example, a product squad should basically only have 6 types of people. Product Manager, Product Designer, Engineering Manager, Product Marketing, Engineers, Data Scientist. Sometimes there's a need for 1 or 2 other specialist roles depending on the org/business.
No Business Analysts, Scrum Masters, Product Owners, Architects, QA, Customer Experience, etc.
Poor risk-taking
Classic innovator's dilemma quickly sets in. Decisions start to become incremental and new ideas tend to be too hard to digest or feel too risky to pursue. In some terrible cases, an "innovation" team is created to try to compensate. Fail. Innovation is everyone's job.
Piecemeal attempts to rectify
Rather than leadership taking bold steps to address all of the above (and more), they often avoid making hard decisions or rocking the boat too much. Changes to the business and the org tend to be too incremental. Often times it feels like it's no one's job to really fix the problem and building consensus for hard changes can be almost impossible.
What can be done?
That's a post for another day!