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Analytics Magazine

Forum: How to run a cross-functional team

September/October 2015

Four principles for speedy, actionable, data-driven decision-making

By Rishi Padhi, Ankur Uttam and Achal Asawa

Organizations are very complex and have many self-governing systems that work in close coordination and interdependence with each other. These linkages lead to differing magnitude of decisions, often unexpected, that ripple across seemingly unrelated elements. Organizations often create cross-functional teams to align units with the hopes of creating synergies. However, creating and running a successful cross-functional team has many challenges including but not restricted to: conflict management, prioritization, lack of accountability, missing decision-makers, group think, anchoring bias, intuition- and gut-based decisions and information asymmetry.

This article focuses on speedy and actionable data-driven decision-making in such cross-functional teams. The authors discuss principles that have been tried and tested. Broadly, these are “set the right team and process,” “align organization and customer,” “make data-driven decisions” and “close the loop.”

1. Set the right team and process

Occasionally, we hear functional stakeholders say clichés like, “I will get back to you on this” or “let me chew on this and revert” or “I have not thought about this and need more time” and there you lose another week, fortnight or maybe even a month. These are cases of decision-makers not being in the room, no prior agenda circulation or no prior preparation/brainstorming before coming to the meeting.

The meeting owner should ensure that agendas are tight and pre-circulated, should follow-up on action items multiple times between two meetings and should have an update before the meeting, calling out laggards in the meeting and holding them accountable.

Team meetings
Team meetings should focus on reaching solutions to maximize benefits for the organization rather than a function maxima.

The decision-making also needs to be collaborative and inclusive. Its objective (more on this later) and efforts should be spent discussing and convincing the quorum rather than, “I know my function best and this is the right choice.” The focus should be to reach solutions to maximize benefits for the organization rather than a function maxima.

2. Align organization and customer

The customer is the center of all organizational initiatives: impress and excite the customer and business will do well. Customers are all different, have different needs, are buying different things, undergo different stages of the purchase cycle and have very unique behaviors. The same efforts can emote different responses – making someone feel good and another bad. Also, remember that needs are not independent; they are a complex mesh of intertwined portfolios.

When the committee decides initiatives for customers, it should ensure that none of the actions are in contradiction to its mission and vision in the short run or the long run. Contradictions and conflicts can inflict long-term setbacks that can take years to rebuild. A simple example could be creating a non-biodegradable packaging when the mission is to go-green or offering a perfectly shaped, sized and polished genetically modified fruit instead of organic food.

3. Make data-driven decisions

In today’s environment of hyper-growth, hyper-diversity and hypersensitivity it is important to understand customers through their demographic, behavior and attitudinal traits. Once they are determined, the next important step is asking the right questions. Answering the right question incorrectly is more beneficial than answering the wrong question correctly. This needs a lot of front-load thinking, preemptive reasoning and buy-in from all functions. Questions should be forward-looking, hypothesis-driven or backed by results from previous experiments.

The multi-dimensional explosion of data has almost overwhelmed today’s systems and has pushed the limits of computation and imagination. It is important that you have all the data, and if something is missing either procure it externally or set-up systems to create that data internally or do both for long-term gains. Once this data beast has been tamed, the focus should be on correct and consistent use of data through a single source of truth. All functions should use this source for all decisions.

Post data comes the key performance indicators (KPIs) and measurement framework. All functions have to be aligned on the KPIs – their definitions and the way they are calculated – to ensure that the business outcomes can be measured consistently. Once common and consistent KPIs are cemented, the measurement framework should be capable of viewing results in real time and concerned only with KPIs that lead to action (no trivial KPIs). The framework should be more like cockpits used to measure and drive business rather than dashboards that measure a specific metric or a group of functional metrics.

Inquisitive and deep-dive analysis should be done in an agile fashion by each function and intermediate results reported and discussed in each cross-functional meeting. The end outcome should incorporate both macro insights for understanding the overall strategy and micro insights to ensure short-term actionability, consumption and validation. The focus of learning should be on rapid iterations and quick experimentation. Similarly, any product development should happen in small and quick cycles and built in incremental fashion rather than long cycles.

4. Close the loop

Teams need to ensure accountability with each other. All action items should be discussed (material pre-circulated so that only objections, clarifications and next steps discussions occur rather than the long monotonous presentation of the output) and functional leads should be responsible for the outcome of their experiments (especially if they are very different from hypothesized results). It is important to understand that a non-performing function can be penalized by reducing budgets, but this also leads to a function not being performed well.

Once the results are vetted, the focus should be on consumption and ensuing discussions should include questions such as: What does the rollout mean for different functions? How can the negative side effect be minimized? Are there synergies with any other initiative in a different function?

Once the team is onboard then a clear roadmap with milestones, risks and contingencies should be created for implementation. Another key aspect is to incorporate learning (especially from failed experiments) into the next cycle of decision-making. Making mistakes is OK but repeating mistakes is expensive.

Final Thoughts

To set up your cross-functional team for success, ensure presence of decision-makers, ruthlessly drive accountability, understand customers and be aligned to the organizational mission and vision. In addition, use all the data, use it consistently, judiciously and create actionable measures and outcomes. Finally, perform quick iterations and experiments, understand downstream dependencies on all functions and idolize past learning.

Rishi Padhi is director of vertical marketing initiatives for eBay North America. He has more than 15 years of experience in CPG, e-commerce and strategy and holds an MBA from the Kellogg School of Management, Northwestern University.

Ankur Uttam is a senior engagement manager and client partner at Mu Sigma. He has more than 10 years of industry experience in products and services companies solving a wide range of problems and holds an MBA from IIM Bangalore.

Achal Asawa is a senior associate at Mu Sigma. He has more than three years of management and analytics consulting experience in e-commerce, retail and managed services. He holds a master’s degree in technology management from the University of Illinois, Urbana-Champaign.

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