Zone to Win has been in the market for ten years now, and while its core principles have held up well, we have learned a lot over the past decade, especially when it comes to organizing within each of the various zones.? Here are some key lessons learned:
- At the enterprise level, Independent Operating Units with all functions reporting to a single general manager are critical to success in the Incubation Zone.? This allows the emerging line of business to get into the market (and, if necessary, out of the market) whenever it needs to, as fast or as slow as it needs to.? Direct contact with customers and competitors immerses the organization in the realities of the marketplace with no intermediating distortions.? There just is no good substitute for it.
- Nested incubation is a different kettle of fish.? In particular, when a Performance Zone organization is exploring a disruptive innovation within its own function—typically on the product side but also potentially sales—an IOU model entails too much overhead to be practical.? The reason we can depart from it is that, with nested incubation, we are taking on something radically new but not intrinsically disruptive to our existing operating model.? That is, at scale, we expect it to fit right in.? The challenge is to get it to scale without it getting crushed by the demands of day-to-day Performance Zone management. ?In this context, best practice is to hive off a dedicated team and impose a policy of restricted distribution to give it the freedom to make mistakes and course correct without the usual Productivity Zone slowdowns needed when you are releasing for general availability.
- At the enterprise level, organizing around functions disciplines is critical to the success of the Productivity Zone—finance, HR, IT, marketing, procurement, you name it.? Each org embodies a level of expertise specific to its discipline that gives it decision rights over a set of systems used by all the other orgs.? Operating these systems represents the bedrock of its annual funding.? That said, each org is also asked to deliver programs that support other orgs in taking their productivity to a new level.? Here, decision rights must be shared between the delivering and the consuming orgs, with the former taking responsibility for producing the programs, the latter taking responsibility for its members embracing and adhering to the new modus operandi.
- The functional model runs into challenges, however, whenever a cross-functional initiative is required.? This is where you hear everyone talking about how siloed the enterprise has become and how we need to break down the silos, so let me be very clear from the outset about this—No you don’t!? Silos are how work gets done efficiently.? They host all our mission-critical systems, and there is no way to operate at scale without them.? That said, they do interfere with cross-functional initiatives, and you do need to work around them to implement any significant change. ?Since cross-functional initiatives are always programs—meaning, they are designed to change state, and they have a beginning, a middle, and an end—you can coopt this model to succeed.? The two key lessons learned here are: first, you must appoint a Single Accountable Leader who quarterbacks the effort on a day-to-day basis, and second, that person, when operating in that role, must report directly to an empowered executive sponsor who clears the way when the inevitable resistance to change emerges.
- At the enterprise level, the Performance Zone organizes around a performance matrix, with all the product lines reporting to a Chief Product Officer and all the go-to-market channels reporting to a Chief Revenue Officer. Each cell in the matrix has two owners, and they are jointly accountable for meeting the bookings and revenue targets in the annual plan.? When those targets are not met, they are jointly accountable for answering four questions (What did we think would happen?? What did happen?? What did we learn? What are we doing to get back on plan?).? All this is in the book.? One key lesson learned here is that most reviews only answer the second and fourth questions, resulting in no learning, just knee-jerk reacting. ?This is definitely not OK. The motto has to be win or learn!
- Another lesson learned addresses the question of whether one should organize the Performance Zone around functions or business units.? In the business unit model, each of the product lines and each of the major theaters are run by a highly empowered general manager who is accountable for making the plan in their arena.? In the function model, products roll up to an executive vice president of R&D, sales roll up to an executive vice president of sales (often with the title of President on their business card to give them better access to their customers’ C-suites).?? The former model is more responsive to the dynamics of developing markets where market shares are still fluid, the latter is more efficient in competing in mature markets where market shares are established.? Importantly, the BU model is more expensive to run, and therefore it needs to deliver higher growth in order to warrant its extra cost.? How much varies, of course, but in general, high single-digit growth warrants the BU model, and low single-digit growth does not.
That’s what I think.? What do you think?
Love this! This is an insightful breakdown of how each zone requires a tailored approach. Optimizing rather than generalizing is the key to sustained enterprise success.
Chief Cyber Risk Officer at MTI | Advancing Cybersecurity and AI Through Constant Learning
1 个月Thank you for sharing this valuable perspective. The balance between silos and cross-functional initiatives is well noted, but the real challenge is ensuring that a Single Accountable Leader has the authority to drive meaningful change across entrenched structures. In the Performance Zone, focusing on learning is essential, yet without institutional mechanisms, organizations risk reactive decision-making rather than true adaptation. Additionally, while the BU model offers agility in dynamic markets, its higher operational costs require careful evaluation, especially when scaling globally.
Product Coach | Lean-Agile Coach | Product Management | Business Consultant | Motivational Speaker | Gallup Coach | Mentor | Portfolio & Program Management
1 个月"The motto has to be win or learn!" - Geoffrey Moore. Without an understanding of these zones, product organizations may plan their investments amateurishly. These zones elevate the game in the life of a product.
On a Mission to Elevate Workplace Wellness to Boost Employee Well-Being, Engagement, & Retention | Advocate of Mental and Physical Wellness
1 个月Such a powerful framework! Each zone has its own challenges, and optimizing instead of generalizing is the real key to sustained growth. Love this perspective Geoffrey Moore!
Technology Professional
1 个月What I like most about the Zone framework is that it works both in established corporations and early stage companies or growth stage businesses. In a corporation, it helps to understand the intrinsic motivations and drivers of each zone (that may frustrate those in another Zone) and identify how to foster innovation within a slow moving behemoth. In a growing, nimble company, it helps to scaffold roles (especially if super early and people are wearing multiple hats) and build out the functions needed to scale whilst simultaneously maintaining both the ability to innovate and curb the tendency to chase the "bright and shiny"!