Strategic Decision-Making Aptitude is Critical to Market Success
Contributed by Greg GeracieMaking and sticking with decisions can be an important component of organizational success. Unfortunately, the data from our latest market research shows that just over a third of product teams have this core aptitude. Only 37% of respondents in our latest study of high performance product teams indicate that their organizations have developed the discipline to create and stick with a strategy.Product Team InsightsOnly a minority of the teams acknowledge that they are good at making and sticking with strategic decisions (36.9%). As you can see in the table below, when it comes to decision-making, less than 50% of respondents indicated that they were good at making and adhering to decisions.
There was higher confidence in product requirement (44.9%) and technical decision-making capabilities (49.6%). However, nearly 30% of respondents (29.7%) report that they struggle to make and stick with decisions in all areas mentioned in the survey. Furthermore, the study showed that the least perceived confidence in adherence was towards go-to-market decisions (29.5%).Product Strategy Shows Up RegularlyThis is not the first time that importance of strategy has shown up in our continuing research into product team performance. In fact, strategy first appeared in the 2012 and 2013 studies where we documented the importance of maintaining strong alignment between an organization’s goals and objectives with the product team’s strategy and activities. Organizations that tightly align product strategy with company goals and objectives are more likely to outperform their counterparts.It is also necessary to emphasize the importance of staying the course. Not all organizations capable of developing a strong product strategy are equally adept at sticking with their strategy decisions. Some will no doubt argue their markets are too dynamic to hold with forecasts. But barring major market movements, good strategy should require only incremental change to remain directionally correct.From Our Vantage Point We work with a wide variety of organizations spanning consumer products, manufacturing and technology. Over the years we have continued to witness an unspoken bias toward the tactical side of product management. Organizations often focus on tactical execution since it is more immediate and tangible while strategy is often perceived of as something intangible and distant.From our perspective, tactical execution without the appropriate context often leads to less effective decisions and weak results. Organizations that do not put in place a product strategy and a portfolio strategy for the entire suite of products often end up making short-term decisions that undermine longer-term success.For instance, without understanding the longer-term direction of the product, core product team members might decide to purchase a technology platform that only supports today’s current needs. If they had understood the longer-term direction of the product they might have made more scalable and effective decisions. These types of lost opportunity costs quickly add up on two fronts – capital and man hours.As the survey data illustrates, only a minority of organizations whole-heartedly embrace product strategy and provide needed context to key stakeholders. Good strategy starts at the top. CEO’s and executive team members need to clearly articulate the organization’s goals and objectives. The product management team is responsible for bridging the company’s stated goals and objectives with the team’s tactical execution. All of this requires an effective product strategy that key stakeholders can understand and rely on as they plan forward.ConclusionBased on the recent regression analysis, organizations struggle with strategic decision-making aptitude for setting and sticking with product strategies. Our historical data also shows that teams that define and maintain strategies that are well aligned with company goals and objectives are more likely to outperform their counterparts.How does your organization stack up?Image from Flickr
Greg Geracie is a recognized thought leader in the field of product management and the President of Actuation Consulting, the world's leading product management consulting and training organization. Actuation Consulting is a global provider of product management consulting, training, and advisory services to many of world’s most well-known organizations.Greg is also the author of the global best seller Take Charge Product Management and led the development of The Guide to the Product Management and Marketing Body of Knowledge as editor-in-chief with MIT professor Steven Eppinger. He is also an adjunct professor at DePaul University’s College of Computing and Digital Media where he teaches graduate and undergraduate courses on high-tech and digital product management.Greg is a former board member of the Business Architecture Guild. As a Guild member Greg actively contributed to the BIZBOK Guide. Greg has also been asked to contribute his product management expertise to a growing list of other professional bodies of knowledge, including the Institute of Electrical and Electronics Engineers (IEEE) first ITBOK and the latest BABOK Guide. Greg is currently a member of the IEEE Information Technology Committee.