Each of the core ingredients for a successful product organization is a deep rabbit hole in its own right. This article intentionally keeps it short and does not explore the rabbit holes in detail.
For more ingredients, visit, e.g., my article series on The product operating model.
Ingredient #1: Running a product organization, think product!
Some “product organizations” think and act in chains of discrete projects and not with a continuously evolving cradle-to-grave lifecycle mindset. It matters:
When to release to market is a business decision. Multiple daily releases are, for some products, optimal for serving your customers. Other products are best released with a lower frequency, maybe following some chosen go-to-market rhythm.
BtB organizations must separate the evolving general product from customer-specific configurations (encapsulated in customer-specific projects). Do not mix the two. Maintain a strong separation of concerns:
The product organization interacts with selected customers during product discovery, testing the solution hypotheses on the general product to be valuable and usable. This interaction is not about implementing specific customers’ needs in the general product!
Recommendation: Evolve the product continuously, not in discrete projects, and release when it best serves the customers and the business.
Ingredient #2: Drive your product by vision and strategy, not by sales!
Some organizations drive their products by what is being sold, aka “sales-led”. This is a reactive approach, letting your product strategy be driven by your customers.
Henry Ford
You must have, maintain, and communicate a strong product vision and strategy. If not, you’re betting on faster horses!
To avoid any misunderstandings, this does not imply not listening to your customers! Your product teams are in direct and frequent dialogue with your customers and testing solution hypotheses.
We’re not asking the customers what to build. We’re validating solution hypotheses for problems concluded via our product strategy.
Recommendation: Organize around having your product driven by a product vision and strategy. Keep your product clean and free from customer-specific elements, but maintain close interaction with sales, providing valuable market insights.
Ingredient #3: Know the VPC!
From your position in the organization, always know the Value Proposition Canvas(es) you’re contributing to.
You might belong to a team serving your organization’s external customers. Or you might belong to a platform team serving the teams, serving the external customers. It is the same. Know your customers, and know how to serve them.
Recommendation: Try the litmus test in your product organization. Can people describe the VPC from their perspective? Are these perspectives making a consistent whole?
Test failed? You have a job to do, focusing your product organization on customers, products, and services. This focus is a prerequisite for working effectively and efficiently.
Test passed? Congratulations!
Ingredient #4: Aim for a nimble and lean way of working!
It seems to be a law of nature, at least in the northern parts of Europe, that the answer to growth and complexity is (more) process prescription with process offices, more complex organizational structures, lengthy decision processes with countless decision and coordination bodies (that often fail to make decisions or coordinate), and the elephant in the room: even more politics and internal fighting.
These organizations, especially when the above is seen in poor market performance, could decide to clean up the mess for better efficiency, less bureaucracy, and with right-sizing initiatives. That is good and needed, and will most likely have a positive short-term effect. But when returning to normal, the above “law of nature” kicks in. If you do not appreciate the root cause of your problems and only treat the symptoms, you’ll see the same problem sneak in again.
An organization like Amazon’s success cannot be disputed. Despite being a big organization, Amazon has managed to maintain and is determined to keep a start-up mindset. Amazon has coined this a “Day 1 mentality” in contrast to the “Day 2 mentality”.
Jeff Bezos
Image source: Daniel Slater Worldwide Lead, Culture of Innovation, AWS
With a few great exceptions, I find many of the “Day 2 mentality” characteristics in Danish product organizations.
Recommendation: Be tough, very tough, on your portfolio of prescriptive processes. And, when you’re at it, let most of your “process people” go. Only the processes that must be prescribed and followed to the letter are in the prescriptive process toolbox. Before throwing out the rest, consider whether some process fragments should be included in a pick & use toolbox.
As substitutes for excessive prescriptive processes, empower teams and have these supported by strong management. The more we free intelligent people from the prescriptive process rulebook, the more we free the innovation potential in the organization. And, guess what, the pace of innovation in your product organization is exactly what you should optimize for, and you’ll be rewarded in the market.
Wrap-up
I see a growing, but IMO too slow, trend among Danish high-tech organizations towards adapting the principles from the Product Operating Model. Many organizations still place their bets on big process prescriptions. You might want to visit the article The European Process Disease.