Navigating the Complexities of Product Operating Models: Insights from Industry Leaders

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Our recent Leaders in Transformation (LiT) ‘Hot Topic Tuesday’ brought together a diverse group of industry experts to delve into the intricacies of Product Operating Models (POMs). This session, filled with rich insights and practical experiences, highlighted the multifaceted nature of implementing POMs across different organisations.

Defining Product Operating Models: No one-size-fits-all

The conversation began with an important observation: there is no one-size-fits-all POM. Depending on the industry, company structure, and strategic goals, organisations must adapt their POMs to fit their unique contexts. One senior transformation leader emphasised that adaptability is crucial for success. This sentiment set the tone for a discussion that underscored the need for flexibility and customisation in POMs.

Participants shared their experiences from various sectors, illustrating how different factors influence the design and implementation of POMs. For instance, a transformation leader from a technology firm discussed the challenges of integrating product and technical teams in a rapidly evolving market. The consensus was clear: organisations must continuously evaluate and adjust their POMs to remain effective and relevant.

The ideal of self-sufficient product teams

A recurring theme was the aspiration for self-sufficient product teams. In theory, these teams would have all the necessary resources and capabilities to deliver value independently. A Head of Platform Service and Engineering at a renowned footwear brand said: “Nirvana would be completely self-sufficient product teams.” He noted that truly self-sufficient teams can streamline processes and reduce dependencies, leading to faster and more efficient delivery of products.

However, the reality is often more complex. Organisations frequently face challenges in achieving this ideal due to existing structures and resource constraints. The discussion revealed that while the goal of self-sufficiency is desirable, it requires significant investment in team capabilities and organisational alignment.

Balancing value and technical debt

A significant challenge in product operating models is balancing the delivery of new features with maintaining stability and addressing technical debt. This topic sparked a lively debate, with participants sharing their struggles and strategies. A senior director of transformation at a global tech firm pointed out the importance of prioritising both innovation and stability. She emphasised that product teams must be vigilant about not neglecting technical debt, as it can undermine long-term success.

The conversation also touched on practical strategies for maintaining this balance. One approach discussed was incorporating non-functional requirements into product backlogs to ensure that stability and performance are considered alongside new features. Another strategy involved allocating a specific portion of the budget to address technical debt and infrastructure improvements. These measures can help create a more balanced and sustainable approach to product development.

Governance: The backbone of effective POMs

Effective governance emerged as a crucial factor in successful Product Operating Model implementation. Participants emphasised the need for clear governance structures to prioritise tasks and allocate resources appropriately. This includes establishing well-defined roles and responsibilities, setting up robust decision-making processes, and ensuring transparency across the organisation.

One Chief Transformation Officer shared her experience with different governance models and their impact on product teams. She highlighted the importance of involving both business and technical stakeholders in governance processes to ensure alignment and effective prioritisation. The discussion also explored various governance frameworks, such as agile governance and lean portfolio management, which can provide the necessary structure while maintaining flexibility.

The role of platform teams

The role of platform teams in supporting product teams was another key discussion point. Platform teams provide essential tools, infrastructure and services that enable product teams to operate more efficiently. This support is vital for reducing dependencies and accelerating delivery.

One transformation leader discussed the structure of platform teams at his organisation, where they are responsible for building tools, addressing technical debt, and supporting product teams. He noted that a mature platform team should function almost like an internal service provider, offering reliable and scalable solutions that product teams can leverage. This approach allows product teams to focus on delivering value to customers without being bogged down by infrastructure and technical issues.

Integrating business and technical perspectives

Integrating business and technical perspectives within product teams is vital for their success. Participants discussed the importance of having product leaders who can balance business goals with technical realities. An independent transformation consultant emphasised that effective product leaders need to understand both domains to make informed decisions.

The discussion revealed that many organisations struggle with this integration due to siloed structures and differing priorities. It’s fundamental that within a POM structure that the Product and Technical Leaders are coming together to partner and come up with the best solution.

Leadership and incentives

Leadership and incentives play a significant role in the effectiveness of Product Operating Models. Participants discussed the need for product owners to be incentivised not just on delivering new features but also on maintaining stability and addressing technical debt. There was consensus on the importance of aligning incentives with broader organisational goals to ensure that product teams remain focused on delivering long-term value.

The conversation also touched on the role of executive sponsorship in driving POM success. Several participants highlighted the need for strong leadership support to champion the adoption of POMs and provide the necessary resources and guidance. This includes setting clear strategic objectives, aligning budgets with priorities and fostering a culture of continuous improvement.

Continuous optimisation and flexibility

The insightful discussion with our Leaders in Transformation community underscored that there is no universal solution for implementing Product Operating Models. The session highlighted the importance of flexibility, continuous optimisation and effective governance in navigating the complexities of POMs. As one participant aptly put it, “It’s about continuously optimising driving that value and driving productivity.”

At Sullivan & Stanley, we believe in the power of community and shared knowledge. The insights from our LiT community reflect the diverse challenges and innovative solutions that business leaders are employing in their organisations. By fostering these discussions, we aim to support our clients in navigating their transformation journeys and achieving sustainable success.

To learn more on how you can unlock value through implementing a new Product Operating Model, download our Orange Paper:

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Ricky Wallace
Written by Ricky Wallace
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