Quarterly business review for digital transformation: insights from the automotive industry

Abstract

Purpose

As quarterly business reviews (QBRs) remained unexplored in the scholarly community, this paper sheds light on what QBRs are, how they are being used across organisations and provides deep insights into the implementation of the QBR at an incumbent car manufacturer’s digital transformation business unit. Particular attention has been paid to decision processes, portfolio management, challenges and success factors.

Design/methodology/approach

Given the explorative nature of the research, a case study is well suited to explore the phenomenon in its real-world context, especially given the dynamic and volatile business environment. This article is based on insights from an incumbent car manufacturer undergoing a business-wide transformation.

Findings

The car manufacturer introduced the QBR process and themes to improve business effectiveness and efficiency through (1) focusing on the biggest issues, (2) concentrating efforts, (3) providing autonomy and stability, (4) building and maintaining strong relationships, and (5) building domain expertise. Through the QBR process, themes were (de)prioritised, resources allocated, financial value (estimates) agreed upon, and key performance indicators (e.g. £m/FTE; FTE, full-time equivalent employees) introduced. Digital product managers’ were assigned to the prioritised themes, and portfolio management structures were presented.

Originality/value

Managing short- and long-term objectives is challenging for most businesses but essential to perform well in uncertain environments. The QBR process can help organisations continuously (de)prioritise work and reallocate resources based on changing environments and aligned with strategic priorities.

Citation

Hoeft, F. (2023), "Quarterly business review for digital transformation: insights from the automotive industry", Digital Transformation and Society, Vol. 2 No. 4, pp. 342-353. https://doi.org/10.1108/DTS-04-2023-0021

Introduction

From prior research, we know that managing short- and long-term objectives is challenging for most businesses but essential to perform well in uncertain environments. Ambidextrous organisations manage short- and long-term goals in uncertain environments through continuous and changing processes (Kiss, Libaers, Barr, Wang, & Zachary, 2020; O’Reilly & Tushman, 2008). Previous research has focused on business planning as a tool to make “sense of business environments and identify an appropriate course of action in light of uncertainty and missing information” (Brinckmann, Dew, Read, Mayer-Haug, & Grichnik, 2019, p. 173).

Yet a complication comes about as we know that yearly planning cycles are no longer sufficient to survive in highly dynamic business environments today (Al-Ali & Phaal, 2019; Annosi, Foss, & Martini, 2020; Shams, Vrontis, Belyaeva, Ferraris, & Czinkota, 2020). Indeed, businesses have adopted more dynamic planning and review cycles, such as the quarterly business review (QBR), in which leaders (de)prioritise work and reallocate resources based on changing environments and aligned with strategic priorities (Doerr, 2018). The QBR is a framework that helps organisations allocate resources aligned with strategic objectives while creating stability in the operation through a quarterly review of and resource allocation amongst themes. Themes (e.g. pricing or quality) are areas of strategic business importance that form buckets of projects and/or products. The quarterly process aims to create transparency around resource allocation and alignment across business areas, highlighting how projects and products contribute to the organisation’s strategic priorities. The QBR seems to be used primarily in digital and transformation business units, delivering continuous value using agile working methods.

This complication is of concern as QBRs are a vital management tool today, adopted by companies such as Google and Facebook. Many business leaders even argue that their most fundamental successes are due to a regular – often quarterly – strategic and resource allocation review and adjustment process (Doerr, 2018). Yet, a single scholarly paper focused on QBRs is to be written.

The course of action to address this concern is twofold. First, secondary sources, such as management reports, are being reviewed to understand QBRs and how different organisations use them. Second, an in-depth case study of a UK-based car manufacturer reveals nuanced insights into why and how the company uses QBRs. The case study is based on attending two QBRs, various preparation and follow-up meetings, reviewing over 50 QBR-related documents, 15 in-depth interviews and a retrospective workshop with managers involved in the QBR.

This study contributes to strategic management literature on business planning and portfolio management. Three main contributions are being made. First, this study defines the QBR. Second, an initial overview of how organisations use QBRs provides insights into general characteristics and differences. Finally, novel and deep insights into QBR management at a UK-based car manufacturer are being offered to detail QBR specifics and features that might be a foundation for academics to investigate the tool further and guidance for management to implement the tool in their industry context.

The remainder of this study is structured as follows. The subsequent section presents related scholarly work centred around business planning. An initial definition of QBR is proposed, and managerial QBR work is summarised. Next, data collection and analysis are detailed in the methodology section. Section 4 presents the case study findings. Finally, scholarly and managerial implications conclude the paper.

Related work

This section summarises scholarly business planning studies and links those to managerial QBR work.

Business planning

While business planning is amongst the most established organisational practices, it is somewhat controversial as some scholars highlight its importance and benefits. In contrast, others consider its benefits negligible and refer to it as a mostly routinised activity (Brinckmann et al., 2019). Previous scholarly work investigated the usefulness of traditional yearly business planning for certain types of firms (e.g. new entrants versus incumbents) and particular kinds of managers (e.g. entrepreneurs versus intrapreneurs), generally considering a planning horizon of three to five years (Honig & Samuelsson, 2021). Studies widely agree that the appeal of business planning lies in the improved strategic decision-making (Luoma & Martela, 2021). However, those studies generally measure business planning success by comparing business achievements against the initial business planning outcome over more extended periods (e.g. five years), not considering how well competitors or the industry average have been performing. Some studies acknowledge that business planning value is in systematically reviewing past performance and potential future scenarios while reallocating resources accordingly (Doz & Kosonen, 2010; Ojha, Patel, & Sridharan, 2020; Vishnevskiy, Karasev, & Meissner, 2016).

Irrespective of the general view on business planning, a one- or even multiple-year planning cycle is arguably no longer sufficient to be successful in today’s highly dynamic business environments (Ning & Villas-Boas, 2022; Sakellariou & Vecchiato, 2022). Some recent external disruptions requiring faster responses include the coronavirus disease 2019 (COVID-19) pandemic, technological advancement and the pace of new companies entering some industries (Jiang & Lu, 2018, p. 2; Kaipainen & Aarikka-Stenroos, 2022; Liu, Huynh, & Dai, 2021). Thus, a need to change, complement or replace traditional business planning is evident. One tool to improve business planning, resource reallocation and, thereby, business performance is the QBR.

Business reviews: types, (dis-)advantages and applications

Business reviews are critical tools for evaluating organisational performance and driving strategic decision-making. This section summarises the advantages and disadvantages of various business reviews, including annual business reviews (ABRs), QBRs, monthly business reviews (MBRs) and executive business reviews (EBRs). It explores the applications of these review formats in different fields, highlighting their benefits and limitations. The section provides insights into the role of business reviews in strategic planning, performance evaluation, decision-making and organisational communication. Understanding the strengths and weaknesses of different review types can help organisations optimise their review processes for improved business outcomes.

ABRs provide a comprehensive overview of organisational performance over a year, allowing for a holistic assessment of strategic goals and achievements. They facilitate long-term planning, resource allocation and performance evaluation. ABRs may suffer from limited timeliness due to their annual frequency. Additionally, the extensive nature of ABRs can make them resource-intensive and time-consuming. Furthermore, the time lag between the review and the implementation of corrective actions may hinder agility in response to changing market dynamics (Zhou, Zhou, Xue, & Yang, 2012).

QBRs balance the comprehensive nature of ABRs and the timeliness of more frequent reviews. They enable regular performance tracking, goal reassessment, and alignment across teams and departments. QBRs also foster accountability and facilitate proactive decision-making. QBRs may suffer from a narrower scope compared to ABRs, potentially limiting the ability to identify long-term trends or address strategic issues. The shorter time frame between reviews can create pressure to show immediate results, which may not fully reflect the impact of long-term strategic initiatives (Bolte, 2004; Catalyst, 2022).

MBRs provide a more granular and frequent review cycle, allowing organisations to detect performance fluctuations and address operational issues promptly. MBRs facilitate agility in decision-making, resource allocation and risk mitigation. MBRs may focus primarily on short-term operational metrics, potentially overlooking long-term strategic goals. The frequent review cycle may also strain resources and create a sense of micromanagement if not managed effectively (Hasan & Taha Islam, 2023; Rocha, Duclos, da Veiga, dos Santos, & Neves, 2016).

EBRs serve as a platform for senior executives to review the overall health and direction of the organisation, fostering alignment and strategic decision-making (Khurana & Rosenthal, 1998). They enable cross-functional collaboration, communication of key initiatives and identification of critical business issues. EBRs may be perceived as top-down reviews, potentially limiting employee engagement and input. Inadequate communication and transparency surrounding EBRs can create scepticism and resistance to change.

All review formats contribute to strategic planning by aligning goals, evaluating progress and adjusting strategies accordingly. ABRs provide a comprehensive view, QBRs enable periodic reassessment, MBRs focus on short-term execution, and EBRs facilitate cross-functional alignment (Seleem, Attia, & El-Assal, 2016). ABRs, QBRs and MBRs offer platforms for performance evaluation, providing feedback and accountability mechanisms. EBRs allow executives to assess the collective performance of departments and teams (Khurana & Rosenthal, 1998). QBRs, MBRs and EBRs are crucial in data-driven decision-making and resource allocation. QBRs and MBRs provide frequent insights, while EBRs guide high-level decision-making based on a comprehensive organisational perspective.

Business reviews, including ABRs, QBRs, MBRs and EBRs, offer distinct advantages and disadvantages in evaluating organisational performance and driving strategic decision-making. These reviews find applications in different fields, facilitating strategic planning, performance evaluation and decision-making processes. Organisations should consider their specific needs and objectives when selecting and optimising the review formats that best suit their requirements.

Quarterly business review

Management articles widely refer to QBRs as a tool to improve strategy implementation by creating risk transparency and ensuring resource allocation to the most promising opportunities, especially in dynamic environments (Catalyst, 2022). The QBR is often described as a quarterly meeting with customers to understand how value creation can be maximised and resources allocated most favourably (Gainsight, 2022). While external end customers purchase products and services, customers can also be internal business units that serve other business areas. QBRs are generally considered pulse-check tools in addition to an ABR where the state of the entire business and long-term goals and opportunities are reviewed.

The QBR preparation seems vital in determining QBR success. Managers must fully understand their customer’s pain points, needs and success metrics (NetSuite.com, 2022). Regarding QBR content, the strategic goals of both parties – the serving business unit and customer – are being reviewed. The process helps to understand how products and services currently contribute to the customers’ success and how this aligns with the business’s strategic direction (Gainsight, 2022). Regarding QBR outcomes, it seems helpful to identify three to five strategic initiatives that help the customer achieve their objectives with the serving business unit’s involvement (NetSuite.com, 2022). Both parties might want to agree on sub-goals and actions to break down the work over the subsequent quarter for those initiatives.

While similar statements to the ones above can be found widely in managerial articles and blog posts, a scholarly-sound in-depth overview and explanation of QBR still need to be developed; the gap that this study attempts to close using the methodology is explained in the following section.

Methodology

Given the explorative nature of the research, a case study is well suited to explore the phenomenon in its real-world context, especially given the dynamic and volatile business environment. This article is based on insights from an incumbent car manufacturer undergoing a business-wide transformation. The QBR has been used cross-functionally in the digital transformation engine business unit to improve business effectiveness and efficiency. The business unit is approximately 170 full-time equivalent employees (FTE) large. Data have been collected through interviews with 15 managers involved in the QBR, observations of meetings – including QBR meetings and a retrospective workshop – and other organisational dynamics over time, and reviewing over 50 documents used for or associated with QBR.

The interviews were engaging conversations, structured from broad to narrow. The following questions were the rough interview guide and were complemented by probing questions and deep dives into particular issues as deemed relevant:

1. What is the QBR’s purpose?

2. How would you describe the QBR process?

3. What are (dis-)advantages associated with the QBR?

4. What is your involvement in the QBR?

5. What surprised you about the QBR?

6. What went well during the QBR?

7. What could be improved?

8. How could the improvements be implemented?

9. Is there anything else QBR-related you consider relevant?

The interviews have been recorded, transcribed verbatim and analysed using the qualitative data analysis tool, NVivo, and thematic analysis (Braun & Clarke, 2006). The period of data collection was from November 2021 to May 2022. The car manufacturer also used QBR to deal with, amongst others, the COVID-19-related chip shortages and Russia–Ukraine conflict-related supply chain disruptions.

Findings

The presentation is structured into three sub-sections. First, the approach to structuring the portfolio into domains and themes and their management is explained. Second, an overview of the ex-ante-identified challenges with the QBR approach is provided. Third, the ex-post outcomes of a QBR retrospective workshop are summarised.

Themes and portfolio management

The portfolio at the car manufacturer is structured into domains and themes. Themes are buckets of work that are thematically close and usually led by between one and two product managers who coordinate a theme team, including, for example, data engineers, analytics consultants and data scientists. A theme can consist of multiple products and address one or more problem statements. Typically, a theme involves the same or similar business stakeholders, such as subject matter experts, external partners and key decision-makers. Domains summarise themes into business areas for management and reporting purposes. Typically, a senior digital product manager (DPM) is responsible for a domain, sets the strategic direction, attempts to create synergies within the theme and provides senior issue escalation support. In a brainstorming and short-listing process, managers narrowed themes from 80 initial propositions to 9 business priorities. The nine themes were allocated to four domains, illustrated in Figure 1.

With the introduction of themes, the business aimed to (1) focus on the most significant issues at the time, (2) concentrate efforts and resources, (3) provide team autonomy and stability, (4) maintain strong relationships across functions, and (5) build domain expertise.

The themes vary regarding delivery model, funding, and time to value, as illustrated in Table 1. The business distinguishes three main types of themes. First, “digital business unit (BU) delivery” covers themes delivered mostly independently by the digital transformation unit and with limited functional ownership. These themes tend to be transparent regarding their strategic direction and milestones. The other two types of themes are referred to as Digital Consultancy Services. Second, “consult & partner delivery” is mainly delivered by external partners, directed by the digital and transformation product management team. Third, “build functional business intelligence team(s)” is primarily provided by the digital transformation team with handover to the business function post-development. Themes in the discovery phase, for example uncertain in terms of value or scope, are being stored in a backlog.

The digital transformation team then mapped their themes to theme categories to discuss the implications and nuances. The mapping and details (e.g. ownership, resourcing, financials, etc.) for the themes at this particular car manufacturer cannot be disclosed for confidentiality reasons.

The BU’s portfolio management follows a portfolio-wide standardised approach. The leading portfolio management objective is to align activities with strategic priorities, create transparency and entail low administrative overhead. The meetings and cadences are detailed in Figures 2 and 3. While QBR and resourcing occur quarterly, a monthly portfolio review updates on the critical developments in delivered and planned value, products, team, success stories, risks and blockers, digital connections and step-away strategy per each theme. Every week, the DPMs meet within their domains to discuss updates on their themes and associated products, including dependencies and challenges. Given that all products are digital or have a significant digital component, teams on the product level work in two-week sprints with scrum boards and follow established agile cadences, including sprint planning, sprint reviews, sprint retrospectives and daily stand-ups.

The car manufacturer aims to increase value delivery and reduce administrative overhead through a structured and transparent approach. The outcome of the QBR is a list of priorities, themes, allocated resources and value estimates. Themes that were not prioritised were either deprioritised for the unforeseen future or invited to be considered at the next QBR if specific investigations were completed and conditions were met. Regarding resourcing, all employees within the digital transformation unit, except for senior managers and directors working on the domain and portfolio level, were allocated to themes as part of the QBR alignment.

QBR challenges and resolutions

Although QBR might add value in various contexts, it is associated with some inherent challenges and pitfalls that organisations should try to avoid. Not paying attention to these could lead to inefficiencies and misalignments across business areas. Hereafter, general implementation challenges and resolutions the car manufacturer identified before the first QBR are presented.

First, the QBR process needs to be transparent and actively managed. To the stakeholders involved (e.g. theme leads), it must be clear what is expected from them to prepare for the QBR meeting in which resourcing decisions are being discussed. This process is usually best managed by a separate team (e.g. operations hub) not directly involved with the delivery of the themes. Clear roles and responsibilities ensure all required information is available for resource allocation decisions.

Second, expectations for the next quarter and links to other themes need to be discussed. The preparation of the QBR meeting covers a proposal of the planned work per theme, including value delivery estimates, resource requirements and associated risks. While themes should be primarily delivered independently using the allocated resources, there are usually links between themes that require regular alignment. One example is pricing decision-making and price transaction across systems globally, which can be structured into two themes to make the work manageable given the different nature of the two projects. Throughout the QBR process, dependencies must be identified and communicated transparently, and alignment actions must be agreed upon.

Third, QBR is different to the conventional ways of allocating resources. A key argument for but a challenge, especially for traditional organisations, is the continuous revisiting of strategic priorities, benefits of and risks associated with themes and resource reallocation. Traditionally, many organisations allocate resources yearly and often take away resources from underperforming areas or areas that are no longer a strategic priority too late (Brinckmann et al., 2019; Honig & Samuelsson, 2021). Thus, QBR presents a cultural and mindset shift requiring managers and leaders to be open and transparent about their themes and resource reallocation. The QBR process requires decision-makers to be open and honest about benefits and risks, for example, making the same or similar assumptions when calculating financial benefits across themes. Thereby, the QBR can help organisations manage the short and long-term simultaneously.

Fourth, given that the QBR is mainly used in digital businesses, alignment between information technology (IT) delivery across themes and QBR processes is required to operate efficiently. When resources are being reallocated once a quarter and simultaneously across themes, any changes must align with ongoing technical developments. Given that most IT organisations work agile using, for exmple, two-week sprint cycles, it is helpful when themes start and end their sprints simultaneously so that resources can be reallocated seamlessly, project milestones can be achieved, and project handovers managed without delays. Besides, synchronised deployments are helpful when themes depend on each other, for example, process redesign or IT architecture, which require harmonised delivery.

The challenges and potential pitfalls above reemphasise the value QBR can unlock but highlight that the correct implementation is critical to deal with organisational constraints and manage the change successfully.

Quarterly business review retrospective workshop

After the first QBR, the DPM team used the problem–solution–action structure in a brainstorming workshop format to identify improvement measures from the first to the second QBR. Table 2 summarises the workshop outcomes.

The overview table shows that most improvement measures relate to improved communication, transparency and involvement. Not surprisingly, but relevant, it needs to be clear to everyone – individual contributors and managers – involved, what is expected from them at any given time, when decisions are being made, and when changes are being implemented. While the above are specific to the car manufacturer investigated, the outcomes likely apply to other contexts and firms but are evolving as environments and business needs change.

Conclusion

The car manufacturer introduced the QBR process and themes to improve business effectiveness and efficiency through (1) focusing on the biggest issues, (2) concentrating efforts, (3) providing autonomy and stability, (4) building and maintaining solid relationships, and (5) building domain expertise. Through the QBR process, themes were (de)prioritised, resources allocated, financial value (estimates) agreed upon and key performance indicators (e.g. £m/FTE) introduced. DPMs were assigned to the prioritised themes, and portfolio management structures were presented. As part of this process, data engineering, data analytics and data science managers were also allocated to each theme to provide technical leadership. Regarding change management, the BU leadership emphasised that the first QBR should be considered a transition quarter and that not everything will go as planned. To continuously improve, the car manufacturer conducts regular feedback surveys amongst all BU employees to understand challenges and derive improvement measures.

Limitations associated with the qualitative case study approach might be limited representativeness and generalisability. However, as this study’s purpose is the exploration of the issue and not the testing of particular relationships, this is considered acceptable. Risks associated with potentially narrow perspectives from individual interviewees have also been mitigated by interviewing a range of stakeholders in different roles and on varying organisational levels, and through the different data collection approaches (e.g. observations). Future studies could conduct similar studies in other automotive firms and firms in other industries undergoing digital transformation to explore the use of QBRs in other contexts.

Figures

Figure 1

Domains and themes

Figure 2

Portfolio, domain and product management

Figure 3

Portfolio meeting cadence

Table 1

Theme categories

	Digital consultancy services
	Digital business unit delivery	Consult & partner delivery	Build functional business intelligence team(s)	Backlog
	Product managed and delivered with digital BU resource	Product managed by digital BU with delivery/development resource sourced through partners	Digital BU support functions to build their own business intelligence teams, accelerate the first 6 months through co-delivery	Backlog of themes, some of which require further discovery work to increase clarity of opportunity
Digital business unit services	Product Management Management	Product Management Digital Consultancy Supplier management	Product Management Digital Consultancy Change management	Product management
Technical delivery resource	Digital BU oversight and management Majority digital BU delivery resource	Digital BU oversight and management Majority partner delivery resource	Majority digital BU 3–6 months Majority functional after 6 months Digital BU by exception post 6 months	Digital BU for exploratory work where required
Funding	Digital BU funded	Function funded	Mixed funding	No funding required
Transformation approach	Build and embed	Accelerate Leveraged delivery Embed product teams	Accelerate Leave functional capability	N/A
Time to value	Short term	Mid to long term	Short term (paired delivery) Long-term (new capability delivered)	N/A

Note(s): Digital Consultancy = Product strategy, product management, digital assurance, operating model and digital organisation design

Source(s): Author’s own work

Table 2

QBR retrospective workshop outcomes

Issue area	Problems	Solutions
Communication	QBR timeline unclear, e.g. date for reallocation of teams Decision-making process is not transparent	Clear owners of communications and hold them accountable Agreed timescales Transparent and documented communication process Considering the time it takes to move resources in the timing plan Transparency over decision-making
Metrics	Success metrics not fully aligned with strategic priorities Success comparison across themes challenging	Alignment of digital product metrics with other QBRs Considering sustainability in metrics Considering targets for the next financial year in metrics Applicants’ awareness visibility metrics Consider product lifetime value in metrics How to measure and improve motivation and rewards system for DPMs and wider team Product usage metrics (downloads, purchases, …) Product delivery metrics (velocity, story points, burn-down rate, …) Education of stakeholders in terms of new metrics
Resourcing	Instability across themes/too many reallocations Instability of decisions	Squad that can be deployed flexibly across different themes Include graduates, suppliers/partners, and all teams in resourcing Make decisions transparently and communicate reasons for them Consider DPMs and technical leads’ feedback in decision-making
Adherence	Graduates: misaligned rotation timings and unclear development plans Partly low partner/supplier quality No management process for unrequired resource	Communicate QBR decisions about a month before resourcing changes will happen Agree on the impact of the theme in a, e.g. “share fare” format Highlight dependencies across themes Improved alignment with business stakeholders on objectives and plan pre-QBR
Other	Multiple misaligned QBRs across the organisation Uncertainty in terms of what is expected from DPMs (e.g. preparation)

Source(s): Author’s own work