Traditional companies tend to organize themselves around a functional paradigm where all of sales sits together, R&D sits together, customer support, etc. This leads to two main challenges. First, it is very hard to reason about and explore end-to-end value delivery to customers and the various functions tend to point at and blame each other whenever things don’t go as hoped for. Second, each function has a tendency to focus on local optimization, meaning that for instance R&D will focus on as efficiently as possible cranking out as many features as it can. The challenge is that our research shows that most features are never used or used too seldomly to justify the R&D investment. Probably, the impact of R&D could be much higher if it focused more energy on changing and optimizing existing features. However, as the function is evaluated based on feature throughput, that will never happen. As a consequence, most functions in a company end up optimizing for pseudo KPIs, rather than KPIs that move the needle for the company as a while. This is also true for humans, so my question to myself and you today is: what are you pseudo KPIs?
reflection