Tech giants have made Product centric organization a must have for the digital era. Yet many companies, even tech startups (including ManoMano 2 years ago!) are not organized this way. This is a change issue requiring a strong buy-in from the executives and especially the CEO. It also implies new governance to foster autonomy and collaboration. As the company matures, it has to be updated on a regular basis.
What “product centric” means ?
Silicon Valley’s companies made the concept of “Product Centric” popular at the beginning of the 2000’s. They were so successful at building great digital products that their new org design became kind of a standard for the digital era. Spotify also did a great job in spreading very openly their product centric organization which became a reference. I would say (feel free to share your own definition on the comments!) that a product centric organization requires the following elements:
- User-first approach (over the company’s short term business interests)
- Decentralized and cross-functional teams (focus on solving a user problem)
- Product Management function in the company (usually driving the teams)
First beware of your company specificities (key functions, DNA, size)
If you try to duplicate Spotify’s model within your own company by the book, it will probably be a mess, because your business and your DNA are likely very different from Spotify. So first think about these three questions.
What are the key functions of your company? If your business is driven by tech (eg. a Saas company) it might be product centric by nature, usually the founder playing the Product role. If your business is driven by non tech functions like sales or operations, your company will probably be more “project driven” and focused on delivery rather than discovery. Becoming product centric might be a more significant challenge.
What is Your DNA? If your employees are very techy, they might be very interested in switching towards a product centric model. If they have a strong business mindset, they might fear losing control over the roadmaps. The collaboration spirit will be key.
What is your size? Small startups are easier to change, medium companies will require stronger efforts and the whole executive team agreement to engage in such a transformation. Big companies will probably have to start with sub entities to make the case.
In our case, ManoMano was a marketplace driven by sourcing and acquisition, with a tech and data DNA and small to medium sized (~100 persons at that time). It turned out that product was not as important in the beginning as other functions like Sourcing (getting the right sellers on board), Marketing (getting the customers on board) or Operations (making the customers happy). In fact there had been no Product function for almost 4 years when it became clear that the next growth engine would be a differentiating user experience requiring a product centric organization.
Better start by hiring a CPO to drive the change
If you think turning your company into a product organization will be a (change) challenge, you should probably hire a senior leader, and put him/her at an exec position to drive this change. Reporting directly to the CEO should allow him/her to carry this topic at the top of the company agenda. Having evolved in a product centric organization is almost mandatory to give him/her the legitimacy to drive this transformation and to hire key resources thanks to his/her network, track record and credibility he/she brings by being there. And finally, transformation will require a big deal of evangelism within the company and setting a full set of new processes. One of his/her first duties should be to align the company (starting from the execs) on what becoming product centric means for your company. Starting by sharing a “theoretical” vision from a trusted authority (eg. Inspired by Martin Cagan) can make a good basis for collective brainstorming before convergence. Draw a clear roadmap of the milestones so that people are aware of what will come and try to move progressively with no big bang.
In ManoMano’s case, Philippe de Chanville came to see me at a time where CPOs were still rare (in France) because he was convinced ManoMano had to become product-centric. I did not fill all the criteria I mentioned above, also because France lags several years behind the US so experienced profiles were not so numerous! Chloé Martinot had done a great job of evangelism before my arrival (she is the one who convinced Philippe to become much more product centric). I had a bit of experience in Product and around 12 years of pro experience which made me quite senior in this startup environment (we were 130 at that time). It probably helped me drive change within tech functions. I realized too late that I did not spend enough time having everyone outside tech agree on a common vision for product role in the company. Since senior management came from different backgrounds (Amazon, Zalando, CDiscount…) where Product culture was different, it created sort of misunderstandings at some point.
Then introduce Product function and cross-functional teams
First get the right people in the bus. You might already have roles close to Product that you can coach: project managers, designers, customer analysts… If not, hire new resources like PMs, Product designers... Start first with experienced people that will be able to attract and train more junior profiles. Otherwise you will be overwhelmed by coaching tasks. Don’t forget to hire User Researchers! It might not always be on the top of your list at the beginning but Product legitimacy will come from user knowledge.
You can now officially create your Product BU that can be made of Product Management, Design (product design, user research) and eventually Agile (scrum master, agile coach). CPO has to animate this unit, train existing resources on newly required skills and hire additional people.
If your company does not work with cross-functional teams (pizza teams, feature teams, squads…), start creating these teams by gathering product (management and design), engineering and business owners. Make them work collaboratively (shared goals, collective brainstorm to agree on roadmaps…). Start with teams working on user experiences requiring a lot of discovery to prove design and product management value (like steps of the customer journey, eg. browsing, checkout, after-buy team… rather than more technical teams that can still work the old way). Create a strong relationship between engineering and product at every level of the organization
- PM/Lead Dev at Team level,
- Product Director and Engineering Manager at Tribe level (several Teams)
- CPO / CTO at C-level
At this stage we would recommend hiring an agile coach to ease this transformation (create new routines, set up tools, train people…). We had the chance to have Noémie Verscheure at ManoMano, she had a big impact. We know have our own team.
Change your governance to favor autonomy and decentralization
Once you set cross-functional teams up, they will ask for more and more autonomy. For instance, they will want to build their own roadmaps rather than fulfilling executive plans (which can turn out to be bad plans when company and complexity grow). This requires a shift towards management by outcomes where executives set clear directions and goals and where teams build their own solutions to achieve these goals. Business has to come up with problems rather than solutions… It’s hard! But at the end, you want to turn your teams into missionaries rather than mercenaries to get the full potential of them.
At ManoMano, we set up what we call “Gears” that are kind of small entities gathering business, product and engineering on a specific customer journey step. It is a great forum to discuss product roadmaps.
Adapt when evolving
As the company matures and grows, some questions will arise. Does the CPO role still make sense once Product BU is up and running (processes, staff, vision) and the vision mainly decentralized ? How to make business people autonomous and give them visibility if the majority of their projects require tech resources and thus PM validation to move on ? How to avoid having a company (the product BU) within the company ? I personally favor autonomy so I would instead go for a solution where business units and product teams have a very close relationship (meaning a functional reporting for instance) and build their roadmaps very closely (with tech people as well). But I recognize the need for a product community spirit, a product team animation and a specific career development making it necessary to have a product leader in the company.
Should he/she have a sit in the C-suite ? Along with the CTO ? I believe it is simpler to have one seat in the C-suite talking for Product and Engineering (let’s call him CTO) but this requires a mix profile: whether an engineering guy with a strong business sense or a product guy with a tech savviness. This person would have the big picture both on the strategy (mainly product dimension) and delivery (mainly engineering dimension) that for me go together. Besides, it gives clear ownership on some functions that are in between Product and Engineering (QA, Agile..).
This is how the “tech” organization could then look like
Wrap-up: maximizing your chances of success
As you could understand, becoming product centric is mainly a change challenge. I would recommend the following actions to ease the transition.
- Hire a seasoned and senior leader who has experienced companies with a strong product centric organization
- Align key stakeholders of the company on product centric organization meaning (you can have them read a book like “Inspired” by Marty Cagan, it will be a useful basis for discussion)
- Recruit User Research (at least one) to give more legitimacy to Product function through User knowledge
- Transform the company progressively (vs. a big bang) by introducing new behaviors. Start by setting up your first feature team with most engaged employees to demonstrate the value
- Foster collaboration spirit because at the end, this is what matters to have decentralized teams to run happily
ManoMano has now (Feb 2020) around 20 feature teams gathered into tribes. Design team is made up of 10 people including 3 User Researchers. We have agile coaches, scrum masters and QAs who can mitigate PM duties on the delivery side. Tribes decide autonomously their strategy hand in hand with business within “Gears”. Even if there is of course much room for improvement, we can now talk of a product centric organization.