Organize Your Product Teams as Mini-Startups

Grow your product and business by launching mini-startups within your organization

This article is intended for managers at larger enterprises looking to gain (or retain) the benefits of a startup (e.g., impact, speed, and responsiveness) within a larger organization. For teams who have made the decision to switch, this article discusses how to start your practice — first organizing a team and defining key roles and responsibilities within the team.

Background

The organizational model to be described is a flavor of the “Squad Model” — a set of team-organization practices advanced and popularized by Spotify. It is based on the application of Agile methodologies to a dual-reporting, organizational model. Spotify sought to retain the benefits of a startup environment while its team and business grew rapidly

The base unit of the model is a “squad” — an autonomous, cross-functional team on a mission to deliver value to the user or business. Different versions of this model and best practices have emerged.

This article describes the model practiced at a current client of mine — a digital products group within one of the largest healthcare providers in NYC.

As the team grew, the decision was made to transition from one large team to three “Small Empowered Teams,” or “SETs” (aka Squads, Pods), to retain flexibility and responsiveness, but also to build more software, quickly. Our teams have the unique challenge of needing to find product-market fit on new products, serving internal customers, integrating with a third-party electronic health record system, and navigating a large and complex organization.

What is a SET?

A SET (or Squad) is a “mini-startup” within your organization. It is a cross-functional, self-directed team with a specified mission to deliver value to customers and the business. Our group has three SETs acting as parallel threads in delivering product. A SET is comprised of a product owner, designer, tech lead, and developers. Below is an example of a SET focused on a key part of the user journey — helping new customers:

We practice a dual-reporting model in which each team member has two roles:

• SET member: Responsible for accomplishing customer/user and business goals, as prioritized by a product owner. Key focus is day-to-day output — delivering results.
• Function member: Accountable for personal performance and development and contributing to the overall productivity of an organizational function, as prioritized by a functional leader. Key focus is improving craft through knowledge and skills development, creating systems, and coaching others.

A team member reports into a functional chain-of-command, but her manager should not be on the SET (to encourage diverse, free thinking). This model is “dual-reporting” because on a day-to-day basis, she answers to a SET Lead (e.g., product owner requesting user stories) but ultimately answers to her (functional) manager for performance reviews.

These two people are a SET member’s two main sources of work requests. The functional manager has direct authority (e.g., hire/fire, promote), whereas a product owner has indirect authority (e.g., role’s decision making, organizational influence).

How to organize a new SET

Start with clear goals. This requires an effective goal setting process (which I’ll cover in a separate article). It is paramount that your organization gets good at defining success in a non-interpretable (measurable) and meaningful way (no BS metrics).

Once organizational goals are clear, mandate a SET with an ambitious and impactful mission. A good mission is focused on serving people — clear and significant user problems to solve. If a good mission is focused on the problem space (e.g., help people find the best-fit doctor), a bad mission is focused on the solution space (e.g., execute the business owner’s sizzle idea of the week).

Small Empowered Teams can be assembled for a temporary mission (e.g., rebrand, rewrite an internal system) and disbanded once the mission is accomplished. However, most SETs may work on ongoing sources of value — such as parts of the user journey and business objectives of acquiring, activating, retaining, and monetizing users.

A meaningful mission does not change very often. Some missions do end, and a SET should be disbanded if they accomplish their mission, but most missions will be ongoing.

If a SET’s mission changes even a few times (assuming you are not an agency), your organization might need to create a stronger vision OR you might be mandating a goal. Try assigning an ambitious and meaningful mission and break them down into smaller annual and quarterly goals.

Assemble the right team — people with the skills and experiences needed to be successful. The team should be autonomous — cross-functional, self-sufficient, and self-organized.

Define SET roles and responsibilities

A SET Lead (e.g., product owner) drives the team in accomplishing its mission:

• Accountable for results produced by team
• Responsible for increasing team’s cross-functional effectiveness (e.g., planning, coordination, communication, interpersonal dynamics)
• Owns the conceptual integrity of the product (i.e., the user and business owner experience)

Functional Leads (e.g., Tech Lead, Design Lead) drives functional team members to be as productive as possible:

• Execution standard bearer: Regardless of title, this is the person on the team that everyone trusts and commands respect because of their ability to execute. This is the person a manager would love to clone because of their character and capabilities. This role requires an extremely strong operator, as they will help set the tone and rhythm of the entire team.
• Although this role may be an individual contributor role, it is typically reserved for people on the management track. An equal split between these responsibilities is common.
• Morally responsible for output produced by functional team members: The Functional Lead (e.g., Senior Designer on the SET) is not the Functional Manager (e.g., Director of Design that other designers report to). The Functional Lead may not have direct authority, but they should have an extreme sense of ownership. Strong performers will take it upon themselves to own the output of all Function members (e.g., dev lead who causes all SET devs to produce less defects pre-release).
• Morally responsible for increasing productivity of team’s functional members (e.g., Tech Lead actively coaches more junior devs how to better estimate work, be more methodical, write elegant code, release quicker).
• Takes ownership of the conceptual integrity of the product’s technical foundation. Example: senior engineering leaders, such as CTO/VP/Director, may own the integrity of entire technology systems, but an effective Tech Lead will take increasing personal ownership of key pieces.

An important benefit of the Squad Model is creating more ownership. Having overlapping ownership — horizontal (product) and vertical (technical) — doubles attention. This increases the probability that someone is pushing forward, and decreases the probability of something falling through the cracks.

SET Leads can be generalists (e.g., product manager) or specialists (e.g., SEO marketer, engineer, data scientist) who own the conceptual integrity of the product. They do whatever it takes to provide an excellent, seamless experience from start-to-finish.

Functional Leads are specialists who own the conceptual integrity of the technical platform (e.g., code, design, operation) — that is the foundation on which the experience is built.

Both roles are integration roles.

This means, an effective Product Owner rejects features that will compromise an amazing experience. For example, if someone tries to subsume a buggy, poorly designed, or non-valuable feature into an app’s experience, the Product Owner should fight to reject the feature (regardless of that person’s position or team). Also, an effective Product Owner will cause better cross-functional, cross-team collaboration.

An effective Technical Owner plays an equivalent, orthogonal role. For example, if a tech lead working on a major backend system is asked to merge poor code, her job is to refuse — to ensure that a high bar is met. She should coach that other dev to meet the quality standard.

Both roles are standard bearers of quality and execution. People in these roles gain moral authority through leading by example. They should use their goodwill to influence priorities that improve outcomes, including developing people, creating meaningful goals, and proactively clearing the path for a SET to be successful.

An upcoming article will discuss agreements needed with executives, other teams, and between functions — in order for this organizational model to succeed.