Question: If you are located in North America, Japan, or Australia and are using distributed teams beyond your country’s borders, how effective are they compared to a local development team? Exclude personnel costs and a higher oversight and communications burden.

 Local vs. Distributed Team Effectiveness

Dissecting the Responses

Over 40% (40.2%) of respondents indicated they don’t use distributed out-of-country teams or that the questions doesn’t apply to them. However, nearly 60% report that their companies do work with these international distributed teams. Of these, 11.9% consider the distributed teams more effective (10.3%) or significantly more effective (1.6%) than domestic development teams. Nearly 20% (19.4) indicated that international teams perform as well as in-country teams. Almost 30% rated out-of-country teams less effective (19.0%) or much less effective (9.5%) that in-country teams.

Question: What method of product requirements research does your organization primarily use to gather meaningful requirements? (Check one.)

A Closer Look at the Survey Responses

Respondents told us that just over a fourth of their companies (28.1%) rely on a combination of voice-of-the-customer and workflow analysis as their approach to product requirements research. Between this group and those exclusively using voice-of-the-customer, almost half (49.4%) use VOC. Closely behind at 22.5%, internal idea generation is also well represented.

Looking Forward

As we continue to look at Global Study of Product Team Performance survey, we build toward uncovering the six new key performance indicators for high-performing teams.

Advancing the Profession of Product Management
website I consulting I training I toolkits I books I blog I twitter

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Our continuing market research enjoys the support of a growing list of promotional partners who encourage product team members to take part in the global survey and help us get the word out on our findings.

This year’s promo partners include:

• The Boston Product Management Association (BPMA)
• The Chicago Product Management Association (ChiPMA)
• Orange County Product Managers (OCPM)
• 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)
• Silicon Valley Engineering Leadership Community
• Singapore Product Camp (Ravi Kumar and team)

You are no doubt wondering why so many different groups support this effort. The answer is that our study enables us, collectively, to uncover great data that is meaningful to product executives and product team members. Once the survey is complete we share the data with an independent statistician who conducts regression analysis. The result of this regression analysis are factors that are highly corrolated with high performance on product teams. We also uncover trends.

A Telling Trend

2015 Actuation Consulting, all rights reserved.

This first illustration displays product development methodology adoption rates for the last four years. As you can see, Blended methods (combining Agile and Waterfall) continue to dominate in terms of usage. Popular belief would lead one to believe that Agile methods currently rule but the fact is last year’s data illustrated a decline in Agile adoption for the very first time since we began tracking adoption rates.

What Exactly Is Product Management Accountable For?

Or consider this graphic which illustrates the metrics that product managers are held accountable to. Respondents tell us that the primary metric used by their organizations’ to track a product managers performance is customer satisfaction. We believe that this is due to the fact that previous studies showed only 19% of product managers have profit and loss responsibility. Less in the technology realm. What is most concerning is that the second highest number is actually “our product managers are not held accountable to any metric.” The remainder of the metrics are tied to revenue, profitability, market share and velocity. All hover from the high twenties to the high teens in percentages.

A Trend in the Making?

Finally, we asked respondents to tell us about where user experience professionals functionally report within their organizations. Our findings are illustrated in the pie chart. Engineering, development and technology currently has the edge with product management following closely behind. However, when we asked a follow-on question regarding “where UX professionals should report to be most effective” we got a different answer. Respondents told us, by a wide margin, that ux pros should report into product (either the product management function or the Chief Product Officer (CPO)).

We Want to Hear From You

All of these findings are from our 2015 study and that white paper is still available. If you have 7 minutes to invest we would like to encourage you to take the new survey in which we explore a whole host of topics ranging from product development methods, requirements management, outsourcing trends, user experience and many more.

We not only want to hear from you – but if you choose to fill out the survey – you will be among the first to receive a copy of the 2016 white paper as a thank you! We are also randomly drawing for a $200 gift card as well.

We hope to hear how you and your product team are performing! (Your responses will be kept strictly confidential.)

Advancing the Profession of Product Management
website I consulting I training I toolkits I books I blog I twitter

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Like a majority of product managers, Mr. Geracie found his way into the field in a sort of round about way. Now, with his firm, Actuation Consulting, he works on an annual study that began in 2012 which has produced great insights into the field of product management and provides groundbreaking statistics and analysis for product managers, project managers, and product teams.

The Product Management and Marketing Body of Knowledge’s Development

Mr. Geracie discussed with Mr. Kumar what a Body of Knowledge is. It’s an attempt by an industry or profession to codify terminology and processes for that profession. Through the collaboration of PMI, Actuation Consulting, and Mr. Geracie in particular, the development of The Guide to Product Management and Marketing Body of Knowledge, aka ProdBOK has been completed. A Body of Knowledge (BOK) needs several things to work.  It requires:

• Sponsorship by an industry association

• A consensus of professionals working in that industry

• An attempt to detail the industry’s best practices

The ProdBOK project took three years and had 60 different contributors. It was difficult to standardize the writing, but through the dedicated efforts of Mr. Geracie and Professor Steve Eppinger of MIT the task was accomplished with a very high degree of professionalism. They took a best in breed approach which was why they had some thought leaders in different areas of product management like Roman Pilcher and Greg Cohen discussing Agile development.

Mr. Geracie is not a stranger to successful book writing having written Take Charge Product Management over the course of six months. He says he sort of “sequestered” himself to write the book. The process with the ProdBOK was much different, but no less rewarding. The ProdBOK attempts to cross all industries although there are certain areas that are more applicable to some industries than others.

Ongoing Study of High Performance Product Teams

The study that Mr. Geracie and his colleagues have pioneered began in 2012 and researches the factors that differentiate high producing product teams from the rest of the pack. The results were given to statisticians to do regression analysis. Each year the findings bring further insight and clarity to what makes a product team a high producing product team. In 2016, it will be the fifth year that they undertake this study. Surveys have already gone out to selected product teams. They were distributed in late January. The study, in essence, takes a look at statistically valid factors related to product team performance. The authors of the study, including Mr. Geracie, work with a wide variety of industries, associations and sponsors to distribute the study. The study’s aim remains the same ‑ to find out what, statistically, differentiates high producing teams from the rest. It’s the only study of its kind and it is often used as source material in books and industry‑related articles.In 2012, the survey was distributed to about 1,100 companies. In 2015, it was distributed to 1,500. It grows by about 100 companies a year. This year, 2016, they’re on track for 1,600 companies.

Product managers need product teams. They can’t go it alone even with take charge product management. They need data to make effective decisions. Data trumps opinions. It’s not subjective. To be effective with take charge product management, they need accurate information to make better decisions and better products as a result.

In general, the 2015 study showed that there are four factors of high performing product teams. First, high performance teams practice strategic decision making. About 1/3 of organizations are good at making and sticking with decisions. These organizations’ product teams perform better and so do their products. Take charge product management doesn’t end with the product team’s work. It encompasses sales and marketing as well. It’s a cross‑organizational concept.

Second, Mr. Geracie and his team found that stand up frequency matters. Stand ups are effective when conducted at regular intervals. If a product team conducts regular stand ups, they will outperform their peers.  Third, these take charge product teams practice quick problem recovery. If the organization can rally past unforeseen issues when they arise and nimbly move past those problems, they will have higher performance rates.  Fourth, taking into account the user experience helps product teams create better products. Most organizations do take user experience into account and utilize it during various parts of the product development cycle.

A Look Back at Previous Studies

Mr. Geracie was then asked about findings from the 2013 and 2014 studies.  In 2013, the take charge product development study results showcased the importance of an aligned strategy, business‑unit leader engagement, product manager role definition, an expressed importance in the product launch by having a single point of contact and specific onboarding practices for team members. In 2014, product team culture was important as was an understanding of the sales cycle and optimizing the product team relationships with the sales organization.

Regarding take charge product management, the data showed that teams are more likely to perform at a higher level if these five factors exist:

1) A common goal which unites the team. The team passionately pursues the goal as a team. This solidifies the team.

2) Effective line management. The effective line manager can remove obstacles, provide resources, and facilitate communication. This helps the team get to their goal faster.

3) Strong engineers whose importance is openly recognized helps teams succeed. Sometimes, engineers feel underappreciated in their role. Organizations that consistently recognize an engineer’s contribution have product teams that work better together.

4) Inclusion of user‑experience professionals in the product team is critical. Teams with user experience professionals perform better and have a higher overall success rate.

Take Charge Product Management

Take charge product management also requires that the product team communicate with marketing and sales. It works best when each of these teams’ goals are aligned. Competing priorities can poison the well and make the team less effective. Another trend that Mr. Geracie noticed was that Agile is not being adopted nearly as fast as experts had hypothesized. He notes that currently many organizations do not fully support Agile product development. Many organizations are in a hybrid sort of state.

Many product teams see their failures as the result of the product manager. A take charge product manager can’t please everyone at every time. They have to accept that. However, communication is important. Product managers have to work to ease dissatisfaction. Time is always short, but meetings with the product team to address these issues often help. It’s better to find out about problems quickly and not let them fester. Not addressing problems quickly can create bigger problems later and more hard feelings among the group. An effective, take charge product manager will attend stand up meetings and do walk arounds. However, the product manager should realize that not everyone will be on board all the time, and accept that as a given.

Product managers have difficulties when their organizations don’t empower them. It is difficult to implement a take charge product management style without feeling empowered to do so. Mr. Geracie’s book, Take Charge Product Management, can help bridge some of that gap. Mr. Geracie expressed a concern that customer satisfaction is the only metric that most product managers are held accountable to. There isn’t a second metric that has found wide use. However, organizations and product managers should find other ways to measure success so that they can be held accountable in a more comprehensive way.

For more information on take charge product management and Greg Geracie, visit Actuation Consulting’s blog.

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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).

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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.

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