Organize Around Product
← Back to listIn digital-first companies, traditional functional silos—marketing, engineering, design—can stifle velocity and ownership. Organizing teams around discrete products instead fosters end-to-end accountability, deeper customer focus, and significantly faster delivery.
Functional vs. Product-Centric StructuresFunctional organizations group individuals by specialization, optimizing for expertise but often creating handoff delays and unclear ownership. A product-centric structure reorganizes around customer-valuable outcomes: each cross-functional team owns a product or product area, with responsibility for strategy, development, launch, and iteration.
Benefits of Organizing Around Products- End-to-End Accountability: Teams own their product’s success metrics, from initial discovery through performance and customer satisfaction.
- Faster Delivery: Co-located expertise and shared goals reduce coordination overhead and speed up decision-making.
- Customer Obsession: Continuous proximity to user data and feedback ensures faster validation of ideas.
- Scalability: New products or features can be staffed with dedicated squads without disrupting other teams.
Spotify Model: Squads (small cross-functional teams), Tribes (loosely coupled squads by domain), Chapters and Guilds (communities of practice) balance autonomy and alignment (What is the Spotify Model?, Atlassian).
Amazon’s Two-Pizza Teams: Small teams that can be fed with two pizzas own individual services or features, enabling rapid scaling of microservices and innovation.
Building Your Product Organizations- Define Product Domains: Map your offerings into logical product areas that align with customer journeys and business objectives.
- Form Cross-Functional Squads: Staff each squad with PMs, engineers, designers, and ops leads, empowered with P&L accountability.
- Establish Shared OKRs: Align squads around measurable outcomes and company objectives, reviewed in quarterly planning cycles.
- Implement Lightweight Governance: Use product councils to arbitrate dependencies, manage shared services, and maintain strategic coherence.
- Invest in Enabling Functions: Centralize capabilities like UX research, analytics, and DevOps while embedding specialists within squads.
- Time to Market: Average cycle time from ideation to production deployment by squad.
- Customer NPS: Net Promoter Score for each product area, reflecting user delight and recommendation likelihood.
- Feature Adoption: Percentage of active users engaging with new releases within the first month.
- Team Health: Squad retention, satisfaction surveys, and throughput metrics (story points completed).
- Resource Contention: Shared infrastructure can become a bottleneck—address with clear SLAs and platform squads.
- Cultural Resistance: Shifting reporting lines can unsettle employees—manage change with transparent communication and pilot programs.
- Maintaining Alignment: Autonomous squads risk diverging—reinforce roadmap syncs and community rituals.
Advances in AI and low-code orchestration will further empower product squads to automate routine tasks, experiment at scale, and tailor experiences dynamically. Organizations embracing product-centric structures today will be best positioned to harness these capabilities tomorrow.
ConclusionOrganizing around products transforms how companies deliver value—enhancing accountability, speeding up delivery, and fostering a relentless focus on customer outcomes. By adopting proven models like Spotify squads or Amazon’s two-pizza teams, and tailoring them to your context, you can build an agile, outcome-driven organization ready for the digital age.