Actuation Consulting has been conducting a worldwide study of product teams for three years and respondents continually tell us that only a minority of product teams are performing at a high level. There are many factors that contribute to lower levels of performance and we have statistically analyzed them for years. So this year we incorporated the following question into our global survey.

“How Effective is Your Product Team in Identifying and Incorporating Industry Best Practices?”

As it turns out the answer is a bit shocking. Only 21.83%  of respondents report that their organizations invest significant resources in keeping in tune with industry best practices and that their culture allows the product team to experiment with new ideas.

In other words, an overwhelming 78.17% of respondents are not committed to actively identifying ways to be more effective. This data illustrates that continuous improvement is not a central part of the majority of product teams’ DNA. Organizational resources, focus and culture all contribute to this startling finding.

Passive Monitoring to Completely Ignoring Best Practices

According to the responses, over half of the teams surveyed passively keep an eye on what is going on in their industry and occasionally introduce innovative new ideas into team activities. Nearly one quarter of those surveyed feel they are too busy managing their workload to devote any time to keeping up with new developments in their industry let alone incorporate new practices into their workflow.

Barely a fifth of respondents indicated their organizations actively monitor emerging best practices in their industries and encourage experimentation with new ideas. Just over 2% of respondents hold that best practices are too far afield from their day-to-day challenges and pay no attention to new ways of approaching challenges in their industry.

The Catch 22 Paradigm for Product Teams

Product team members have made it exceptionally clear that only a fifth of product teams aggressively seek continuous improvement and are allowed to do so with the support of their organization. It is no wonder then that the majority of product teams continue to operate at sub-optimal performance levels. In many ways this seems like a catch 22. Organizations that are not investing in their product teams improvement actively or passively will continue to wallow and wonder why their teams are struggling while those that empower their teams to take risks and continuously seek improvement will continue to thrive.

Where does your organization stand?

Greg Geracie is the President of Actuation Consulting, a global provider of product management training, consulting, and advisory services to some of the world’s most well-known organizations. Greg is also the author of the global best seller Take Charge Product Management©and the Editor-in-Chief of The Guide to the Product Management and Marketing Body of Knowledge© (ProdBOK).

The post Do Product Teams Really Incorporate Best Practices? appeared first on Actuation Consulting.

Our Sponsors

As we kick-off the fourth year of the study I want to take a second and acknowledge this year’s gold level sponsors without whom our efforts would not be possible.

Project Connections provides resources to help project managers, teams, functional groups and organizational leaders drive results whether it is strongly kick-starting a project, improving cross-functional collaboration, providing training and support, or implementing best practices.

Sensor Six is a leader in helping organizations prioritize product ideas based upon data, enabling roadmap creation and tracking progress in real-time.

The Authors

Part of what makes this study so unique is that it enjoys such wide support. For instance, the five contributing authors each represent a particular functional point of view.

Greg Geracie, President of Actuation Consulting, represents the product management perspective

David Heidt, Principal of Enterprise Agility and former IIBA Chicagoland chapter president, represents the business analyst community

Matt Jackson, President of Jackson Consulting, represents the voice of the project management community

Ron Lichty, Principal of Ron Lichty Consulting and co-author of Managing the Unmanageable, represents the engineering community

Sean Van Tyne, co-author of the Customer Experience Revolution, represents the user experience community

Our Promotional Partners

We also enjoy the support of a wide array of industry associations and organizations who help to distribute the survey link and provide a platform for us to communicate the findings to executives and product team members world-wide. This year’s list includes:

The Boston Product Management Association (BPMA)

The Chicago Product Management Association (ChiPMA)

Orange County Product Managers (OCPM)

The IIBA Chicagoland

The Product Development and Management Association (PDMA Chicago)

The American Society for the Advancement of Project Management (asapm/IPMA USA)

Engineering Leadership Meetup Group in the San Francisco Bay Area

Silicon Valley Code Camp

The Software and Information Industry Association (SIIA)

The Output of Our Research Into Product Teams

Each year we ask a standard set of questions that enables us to closely monitor industry trends including product development methodology adoption rates, how product teams perceive the effectiveness of their performance, and a wide range of other topics. Additionally, we have devised a new set of questions based upon what we have learned from previous studies and what we are witnessing in the marketplace in real-time.

If you are interested in seeing last year’s study – to get a sense of the output of our market research – you can download the 2014 study here.

For those of you who don’t enjoy reading white papers (we know you are out there!) there are four pages of infographics summarizing key data points that are very Twitter friendly. You can access them by clicking on this link.

Want to know how your product team(s) compares to others in our database? We have free online assessments you can take which benchmark your team against others in our database so you can see where you stand. There is one for product team members and another for executives.

This year’s new questions focus on user experience trends and reporting relationships, the impact an improving economy is having on product team turnover, backlog ownership and much more. We would love hear your thoughts on these subjects. You can add your voice to hundreds of others by clicking on this link. The survey takes six minutes to fill out and it’s very user friendly. All responses are anonymous. There is an option to self-identify if you decide you would like to participate in future studies or be the first to receive this year’s white paper.

If you provide us with your contact information you will be entered into our random drawing for a new IPad Mini!

We want to hear from you! Your perspective matters.

Authors Note: If you are interested in sponsoring future studies or learning more about this year’s study you can contact us here.

The post Global Study of High Performance Product Teams appeared first on Actuation Consulting.

From our perspective, we view tight integration between the product development team and marketing counterparts as a critical element of successfully bringing products to market. The more integrated the marketing team is, and more clearly delineated the roles and responsibilities are, the more likely the team is operate at a high level. This has been substantiated in our regression analysis.

A product teams relationship with the marketing team typically falls into several clearly defined categories. Survey respondents told us that their organization’s characteristically fall into one of five categories. These categories are outlined in Table 8.

A Closer Look at the Marketing and Product Development Relationship

A third of respondents characterized the relationship between the product team and marketing as a strong working partnership throughout the product development lifecycle. Additionally, 18.60% of respondents indicated that a weak working partnership exists with marketing throughout the entire product development lifecycle.

Another 18.60% of respondents revealed that while there is a relationship between the marketing and product development teams once the product is complete, there is little to no involvement or collaboration between the two teams prior to that point. 20.94% of respondents revealed that product managers are shouldering both responsibilities and nearly a tenth of respondents (8.14%) stated that product marketing has no involvement in the launch of new products.

Significantly, only one third of marketing organizations are actively engaged with product teams throughout the entire product development lifecycle. This represents a significant opportunity, and challenge, for organizations seeking to improve their performance.

Where does your team fall on this spectrum?

The post Marketers – How Strong Is Your Relationship With The Product Development Team? appeared first on Actuation Consulting.

While the data show the majority of product teams have managed to strike a strong relationship with their organization’s sales team, with only occasional friction, there does appear to be a problem when it comes to the product team’s knowledge of their product’s sales cycle. Our analysis indicates fully 23% of product teams don’t know the sales cycle for their product. Another 43% acknowledge that they struggle to stay in sync with the sales cycle. Only a third of product teams indicate that they are completely in sync with their product’s sales cycle.

Do Product Team’s Know Their Product’s Sales Cycle?

Astonishingly, 66% of product teams do not have a strong grip on their product’s sales cycle, how the product is being sold and under what conditions. Knowledge of a product’s sales cycle is vital and can contribute to more effective roadmap planning, improved collateral and more effective training – not only for the sales team, but for other functions as well.

This widespread lack of understanding of the sales cycle suggests the majority of product teams are too internally focused on product development activities without the appropriate context to understand external factors that can make the product team’s efforts more effective and yield a better return. While this internal orientation is understandable for junior employees and internally facing team members, the reality is that product teams have team members who must be externally focused. These include positions such a product managers, line managers and project managers who should possess knowledge of the sales cycle and be able to share it with core team members.

Conclusion

Clearly, more needs to be done to increase the product team’s awareness of their product’s sales cycle in order to increase the overall effectiveness of the team as well as the organization’s ability to efficiently generate revenue.

How well does your product team understand the sales cycle of your product?

The post Should Product Teams Understand Their Product’s Sales Cycle? appeared first on Actuation Consulting.

A Closer Look at the Survey Responses

Just How Valuable Are Project Managers?

While close to half of respondents (42.61%) consider the project manager role vital to successful completion of product development activities and another 18.18% hold that the role is important but not essential to team success, a considerable percentage of respondents hold the project manager role in less regard. A tenth (10.80%) believe the project manager role is no more important than any other role on the team and 3.41% of respondents believe the role holds no importance. Nearly 14% of respondents (13.64%) do not have project managers on their teams at all. Finally, 11.36% of respondents said that the project manager role is fulfilled by another team member, though this person is not referred to as the project manager.

Conclusion

Analysis of this year’s data illustrates the continued importance of project managers. This will not come as a shock to those who have read past studies, as their importance has surfaced repeatedly over the years. The authors have read a large number of blog posts articulating this self-reflection and we have spoken with those who believe the value of project management is on a gradual decline. Respondents to our survey, however, do not support this diminished importance in the project manager’s role.

This study shows how the Agile development revolution has brought important improvements in the ability to deliver products; however, the prediction of leaderless teams self-organizing to deliver products continues to be elusive. In practice, we have seen the role of the project manager dramatically change to emphasize the orchestration of cross-functional interaction rather than tracking the progress of product team members.

A resounding 42% of respondents view the project manager role as essential to the successful delivery of products. Another 18% of survey responders state that project managers are important – although not essential. Only 3% of respondents believe the role holds no importance on today’s product team.

What’s your view?

The post Are Project Managers Valued Anymore? appeared first on Actuation Consulting.

We have been tracking adoption rates for a variety of product development processes since 2012. This is the first year that we have trended the information in our recently published white paper.

Survey respondents indicate that by far the most popular methodology used in product development is a blended approach combining some aspects of Waterfall and some of Agile. The blended approach accounted for nearly half of all survey responses (45.41%). The second most popular methodology is Agile/Scrum, which is used in companies employing 33.16% of our respondents. Nearly 11% of responders indicated their companies utilize Kanban (2.55%) or another methodology (8.68%). Only a tenth (10.20%) are utilizing Waterfall.

A Trend Line is Worth a Thousand Words

Product Development Adoption Rate Trend Lines

Our illustration clearly shows product methodology trends which we began tracking in 2012. What is most striking is the rate of growth in Agile methods from 2012 to 2013: adoption rates rose from 12.83% in 2012 to 30.25% in 2014. While Agile continues to gain share, the rate of growth increased less than 3% from 2013 to 2014. It is also interesting to note that blended methodologies are showing a similar pattern of change, though in the opposite direction. From its highpoint in 2012 of 52.50% our latest data shows slightly more than 45% of organizations continue to combine Agile and Waterfall methodologies. Waterfall continues its steady decline year after year, now accounting for just 10.20% of responses (2014). Lean was dropped from this year’s survey as there was confusion between the lean methodology and “lean startup”. In its place, we added Kanban. Time will tell what Kanban’s adoption rate will be in 2015.

Conclusion

Overall, though, the data illustrates that Waterfall has yet to hit its floor and both Agile and blended adoption rates appear to be flattening out.

What do you think the future portends?

The post Product Development Process Adoption: Can the Past Predict the Future? appeared first on Actuation Consulting.

Which of the following methodologies best describe the way your organization develops products?

2014 Product Development Methodology Adoption Rates

Survey responders indicate that the most popular methodology used in product development is a blended approach combining some aspects of Waterfall and some of Agile. The blended approach accounted for nearly half of all survey responses (45.41%). The second most popular methodology is Agile/Scrum, which is used in companies employing 33.16% of our respondents. Nearly 11% of responders indicated their companies utilize Kanban (2.55%) or another methodology (8.68%). Only a tenth (10.20%) are utilizing Waterfall.

In Summary

Agile methods, particularly Scrum, continue their ascent with significant year-over-year gains. Conversely, waterfall continues its steady decline – although at a slower rate than a year ago. Blended product development methods remain dominant, as has been the case  since we began tracking this data in 2012.

Looking Into Our Crystal Ball

While it is difficult to predict the future with any degree of certainty we believe it is very likely that blended methods will continue to be the front-runner for the foreseeable future. However, we do expect Agile product development methods to close the gap with blended methods over the next several years. Based upon the currently available data we do not anticipate that Agile/Scrum will pass blended methods as the most widely used method during this time period.

If you are interested in taking a more detailed look at the three year trend lines for these product development methods you can download a free copy of our annual study here. The last three years of product development methodology data is trended for easy consumption.

The post Product Development Methods: Is Agile The Most Widely Used? appeared first on Actuation Consulting.

In our recent study of high performance product teams we asked a question regarding how product teams view their relationship with the sales organization. As it turns out, just over 9% of product teams report being “completely aligned with the sales organization with little or no friction.” Here’s a closer look at the findings.

Product Teams Perceptions of the Relationship with Sales

When asked how they would describe the relationship between the sales organization and the product team, nearly three quarters of responders, 73.41%, indicated that they are either mostly aligned with the sales force with occasional friction or completely aligned with little or no friction.

Still, over a fourth of respondents were both lacking alignment and feeling a significant amount of friction (23.70%) or were in a constant state of friction with the sales force (2.89%).

For these companies, there is definitely significant opportunity for improvement in relations that have the potential to greatly benefit the bottom line.

Are All Forms Of Friction Actually A Problem?

While this year’s study did not differentiate between different types of friction it is our belief that some friction can be healthy – if managed appropriately. Healthy friction can result from the product team and the sales organization appropriately channeling their different points of view in the best interests of the organization.

Product teams typically take a longer view of what they are trying to accomplish normally represented in a product strategy or a 12 month roadmap. Conversely, sales teams are under pressure to deliver on a quarterly basis. Therefore, it is not improbable that friction results from these two variances in perspective and expectations. The key is to effectively balance the long-term goals of the product team against the shorter-term needs of the sales organization and this often entails compromise or in more extreme cases adjudication by executive stakeholders.

Conclusion

If properly managed, friction can be healthy and potentially lead to better outcomes. If poorly managed, or left to fester, friction can lead to toxicity. The good news is that the majority of product teams perceive that they are effectively handling the sales relationship. The bad news? Over a quarter of product teams currently report a high degree of dysfunction in this important relationship.

So that leaves us with a final question. How do sales organizations perceive THEIR relationship with the product team? The other half of this equation will be very telling.

The post Sales and the Product Team – How Strong Is Your Relationship? appeared first on Actuation Consulting.

Four Categories of Entrepreneurs

• Diamonds –  charismatic evangelists who want to revolutionize the status quo and people’s lives. Diamonds are brilliant game-changers but on the flip side they can be self-centered and their failures can be disastrous. The author points to Ted Turner and Steve Jobs as examples.
• Stars – energetic trendsetters with large personalities who have a strong sense of intuition and can sense what’s coming next. When they are right they score big successes and can go global. Personality-wise they can be moody and one-person shows. Examples given include Martha Stewart and Lance Armstrong.
• Transformers – are catalysts for social and cultural change. For instance, Howard Schultz CEO of Starbucks. Transformers seek to modernize older industries. They are forward-thinking but not all of their innovations stand the test of time. Many change-makers are strongly motivated by social change but may ignore or misread pesky data. Awareness of the facts is essential for their success.
• Rocket Ships – tinkerers that aspire to make their efforts cheaper, faster or more efficient. Jeff Bezos is cited as the epitome of a rocket ship. He worships data and efficiency. Rocket ships have formidable minds but their narrow focus can create friction with others. Given the focus on data, intangibles like emotions may be under-appreciated or overlooked.

Conclusion

The author goes on to state that there is nothing absolute about these four profiles. In other words, its possible to have a foot in more than one of the four types. Ultimately, the more you understand about yourself, assuming you are an entrepreneur, the more you can leverage your strengths and compensate for your weaknesses. The adage is “entrepreneur know thyself!”

If you work with an entrepreneur, knowing what type you are working with can help you manage the relationship more effectively.

* Source: The Wall Street Journal, The Four Species of Entrepreneurs, October 4 -5, 2014 

The post Entrepreneur: Crazy Is A Compliment appeared first on Actuation Consulting.

Most of the dialog from those who commented upon last week’s post centered upon ROI’s use as a measure to examine “the relative value of a potential investment versus other existing or potential products.” Additionally, there appeared to be an emerging consensus that the value of ROI, as a measure, decreases as the product moves further downstream and becomes increasingly tangible.

This week I want to share one other learning we gleaned from our study.

Of the organizations that responded that they did actively utilize ROI we asked a follow-on question regarding how long the team had in order to demonstrate a return on investment.

The Actual Question We Asked and The Responses

ROI

For those organizations that do determine success by measuring return on investment, how long is the timeline to demonstrate return on investment?

Results were fairly even for the top three responses to this survey question. A return on investment was expected in 12 months for 35.29% of the respondents. The second most frequently given answer was an expected three-year ROI, which garnered 26.47% response and coming in at 24.51% of response was the indication that ROI was expected within 18 months of launch. Almost 14% of respondents were expected to show a return on investment as soon as six months after launch.

Conclusion

Product professionals are often told by executives that a product needs to show a return in 12 months and the data appears to support our observations about standard practices. However, while 12 months may be the most frequently cited payback period organizations must keep in mind other factors as they set the expected payback period. 12 months may work for a product where the market dynamics are well understood and where customers don’t need to be educated about your product’s unique attributes – but this same payback period may not work for a product entering a new market where the dynamics are likely very different. The data appears to reflect that the organization’s that are actively using ROI are taking market dynamics into account when establishing anticipated payback periods – which is a good thing.

The post Return On Investment: How Long Do You Have To Demonstrate A Return? appeared first on Actuation Consulting.