Leaders have long enjoyed tinkering with team design. Steve Jobs was notorious for insisting that meetings should be small groups of smart people. He had no compunction about letting someone know if they weren’t needed. Jeff Bezos’s two-pizza team rule was his attempt to stop people wasting time on pursuing consensus. In a world where more and more work is distributed with your best people spread across timezones, cultures and organizations – how you design your remote team is critical to its success.
An interesting example of team design in action is Johnson & Johnson Vision Care, the world’s leading manufacturer of contact lenses. A few years back, J&J announced its intention to expand beyond contact lenses and become a global leader in eye health by 2030, which would require an increase of $4 billion a year in its current turnover, significantly higher than the category growth rate of 5 per cent. While part of this growth target would come from selling more of their traditional eye products, even more would need to come from acquisitions and innovations in the area of eye health, such as cataracts and glaucoma treatment.
Having been invited to speak on the future of leadership a few times at J&J, I got to know one of their senior leaders, Aldo Denti, who was VP of Global Franchise Development. Denti grew up in Canada. His father was a doctor, and his mother a nurse. When Denti was just sixteen, his brother passed away from leukemia, a devastating event for his family that would end up directing him into pursuing a career in healthcare and eventually joining J&J.
With such an audacious goal to reach by 2030, Denti realized that dramatic changes were required. J&J needed a new way to work. Amazon and Walmart were both already making early moves into the healthcare space. Nike had acquired Zodiac, a leading consumer data analytics firm. Domino’s had become a technology company by focusing on technology-enabled customer experiences. Even Pepsi had built a 200-person e-commerce team to compete with Amazon. From Denti’s viewpoint, all of those companies and their teams, as well as their traditional competitors, had become more agile, adaptive, and data-driven than his own teams at J&J.
In 2014, when Denti first started thinking about the problem of team design, the business was challenged by a hierarchical mindset and a heavily siloed operating model. Even though there was pressure for brands to be more consumer-centric and to orchestrate their communications across digital platforms, J&J was just not organized in a way that allowed the different functions to speak to each other.
Denti first tried to reboot innovation by trialing a program called the three- legged stool model, which brought R&D, marketing, and the supply chain team together to accelerate the innovation cycle and deliver a brand new daily disposable contact lens in eighteen months. Without needing to wait for consensus from across the company, this small, dynamic team achieved its goal, saving time on a project that had been initially estimated as requiring an additional two years to complete.
With that success under its belt, J&J launched a new project. This time it created a small, cross-functional team to explore emerging technologies, like photochromic contact lenses. The initiative didn’t work. The team was neither fully resourced nor fully empowered. There wasn’t executive alignment on what the team had to deliver, and the team didn’t have the right cross-functional members. There were also some gaps in leadership. As a result, little was achieved. For Denti, the key learning from the experience was that without the right resourcing and alignment of team members and executive sponsors, there is no chance of success.
Reconciling what they had learned from their two experiments, Denti and his team put together what they called the “pod” team concept, with a focus on beauty consumers in Asia. J&J knew that in Asia, millennial beauty seekers had a different outlook than they did in the West. In the East, the focus is on personal expression and beauty amplification, rather than freedom through wearing prescription lenses. J&J had never really been able to capture those particular consumers, so it wanted to accelerate that aspect of their business, not just through innovation but also by changing the engagement model to be more digital, using influencers and social platforms.
The beauty pod that Denti formed was a success. With a core team of twelve globally distributed members, the pod had executive alignment around a clear target: develop new contact lenses through the beauty channel that would also benefit the Acuvue brand. This time, Denti assembled the right group of people, including someone from R&D, local marketers, and a supply chain expert all reporting to a single person (an experienced marketer from Japan).
They gave this pod leader finance and communications support. The beauty pod was almost like a pop-up business unit designed to reach an aspirational goal, with a fixed time limit.
“What you also need
to understand,” explained Denti
as he finished sharing his story with me, “is that the primary
impetus for the pod structure was our realization that algorithms, AI, and machine
learning would be at the center of our
new way of working.
And so as a result
of that, we said if we want
data to really live,
then we would have to surround the data with people that can not only
extract it but also do something interesting with it.
“In the old world, data would sit in analytics or insights. You would go to your data department and try to extract what you needed, and then go back to your functional day job, such as marketing, and try to do something with it. But that’s not the way the new world works. The new way demands that you put the data scientist, the algorithm, and the machine at the center of what you’re doing. Set the proposition that you’re trying to solve as the aspiration. Then resource that aspiration with the people that can extract the data and action it. Our pod system is built around data science and machine learning. Every single pod must have its tie-in to data and data science as a principle of the pod design.”
Idea In Brief
- The key to successful remote teams is taking a strategic and iterative approach to team design
- To meet its aggressive growth targets, Johnson & Johnson Vision Care initiated a digital transformation plan that combined a new culture of data- driven decision making with globally distributed, cross-functional small teams focused on disruptive innovation.
- To be effective, remote teams need executive alignment around a clear and aspirational goal, the right mix of skills and connections, and a fixed time limit.
- Remote teams of the future will leverage sophisticated collaboration tools, machine learning and data science to accelerate product development and transform the workplace.