Why the Squad Model is Not Working For Your Product Organization

A key benefit of the Squad Model is that it decentralizes decision making. This allows a product organization to establish multiple, concurrent teams. Each team can be empowered to make decisions autonomously and quickly to achieve goals. However, decentralization can only work effectively with predefined agreements and true commitment from the CEO to enforce governance.

Below are common killers of the Squad Model. Work with your CEO to address them. Note: I will refer to Squads as SETs (Small Empowered Teams), based on our particular practice of this model.

Problem 1: A decentralized model is not appropriate for your organization

Despite genuine interest, some CEOs have a command-and-control management style that prevents the Squad Model from flourishing. If your CEO’s impulse is to make, or weigh in on, all decisions, then decentralized decision making will bottleneck.

If willing and able to change, the CEO may have to restructure the incumbent organization designed for centralized, top-down decision making. For larger enterprises, this may mean clearing out an entrenched layer of middle managers who direct large groups. A decentralized structure requires more teams led by captains (not a cruft of middle managers). Over time, this results in a flatter, faster organization with simpler decision making and communication.

The new operating model needs leaders to manage from the problem space. Starting with the organization’s mission, leaders should define impactful problems for their teams to solve (translated into annual and quarterly goals), rather than prescribing projects to implement.

The CEO has every right to spot check any point of production, influence solutions, and veto / ratify decisions. However, if they are focused on the highest-leverage activities, they should rarely be prescribing, or overriding, small “what” and “how” decisions. A common dynamic that undermines the Squad Model is undisciplined executives who focus teams on how something is done (execution style) versus outcomes (results).

Tips:

Assess if a decentralized model is appropriate for your organization:

• Evaluate if the Squad Model is right for your org: Carefully consider the tradeoffs to determine if this Model is appropriate. A centralized model may make more sense for your CEO and culture (e.g., early stage startup with singular goal, small business with not enough people to form multiple teams). Have candid conversations with the full team. If your org wants to transition but is not ready, start by making prerequisite changes described in this article.
• Create a Constitution to guide your federation of teams: Ratify and amend working agreements that define the organization of teams, individual roles and responsibilities, and decision making processes. Don’t worry about defining everything when you start. Maintain a list of guiding principles and adapt them over time. Specific “laws” (i.e., policies) can be detailed as situations arise.
• Ask executives to enforce the Constitution: The CEO must be fully aware and buy into the operating agreements so she can enforce them. Assign senior leaders to keep the CEO accountable for enforcement duties.
• Increase reporting: Gaining autonomy has a cost — you must report weekly, push updates to stakeholders individually, and proactively seek input early and late in the product process. The product management role should start to shift from administrator to diplomat.
• Ask the CEO to be an investor, not a boss: The ideal environment is when leaders act as investors funding and supporting entrepreneurs within your enterprise. A good investor would not swoop in to disrupt execution minutia. Create and enforce policies that allow SET Leads to marshal their resources, make decisions, and deliver results. The leader’s job is now to ensure that SET Leads are providing a return on investment. SETs that provide great returns get more resources. SETs that don’t are starved or dissolved. Investors seek leverage by managing their portfolio of teams — this requires a refocus on developing entrepreneurial leaders, investing in missions, and clearing the path for teams (not directing individuals).

Problem 2: Roles Are Not Clearly Defined

Executives define why, SET Leads define what, and SET Members (e.g., engineers, designers) define how.

For each level above, leaders must proactively define:

• What types of decisions have to be made in these domains? Who owns what business metrics and what parts of the customer journey?
• Who is responsible for making these decisions? Who accepts the decisions?
• What decisions can a SET make? What decisions can roles on the SET make? What is the process for coordinating with other SETs and getting buy-in from stakeholders?

Our team uses the RACI framework to define individuals who are:

• Responsible: who should do the work and make planning decisions?
• Accountable: who is accountable for the results — good or bad?
• Consulted: who should be proactively sought for input in decisions?
• Informed: which stakeholders should be informed of decisions and progress? Who will be impacted by your decisions?

Often, in day-to-day practice, executives violate the agreed upon roles and responsibilities. The CEO must enforce that no one violates policies, even if they are trying to drive results.

Ideally, executives will give SETs meaningful problems to solve (problem-led approach). If they want to define solutions for a SET to execute (solution-led approach), then all the details must be provided.

A common pitfall is when an executive tells a team to build something but does not provide enough details. The resulting dynamic is, “Guess what I want, and I’ll tell you if you’re right.” This results in bad products and frustration (particularly when the team is held accountable for the executive’s decision). Ask executives to either give teams the space to solve the problem in their own way, or give them all the decisions needed to deliver.

If an outside leader consistently overrides a SET Lead’s decisions, gradually no one on the SET will listen to her. Undermining the SET Lead will cripple the team’s combat effectiveness. When an ownership dispute like this arises, a ranking manager must adjudicate quickly (escalating to the CEO, if necessary). Decisions must be acknowledged, documented, shared, and, most importantly, enforced. Enforcement is where most organizations fall short.

Tips:

Define and referee role definitions:

• Define and document the various roles and responsibilities across your organization
• During goal checks, ask people if they are being properly consulted and informed
• Incorporate the RACI framework into individual performance reviews
• Expect leaders to amend and document new policies once conflicts are resolved so they don’t reoccur
• Individuals and teams should be encouraged to resolve conflicts themselves, but if there is an impasse, a leader must resolve immediately

Problem 3: SETs are accountable for decisions they did not make

A counterproductive dynamic within the Squad Model is when executives define what results (or how much work) a SET is accountable for without getting input from the people involved.

To avoid an unrealistic outcome, a product manager must ensure her team can truly make its own decisions, such as de-scoping features, extending the release date, or getting additional resources. If not, quality will suffer and the team would have been set up to fail.

To preempt this situation, a team must develop the skill of consistently providing accurate estimates on the level of effort of various initiatives (e.g., development days).

If believable estimates are not provided by SETs, executives have no choice but to guess (spoiler alert — they will guess that you can do more). Get this data to negotiate realistic expectations with your executives.

Stop the downward spiral of your team being pressured to deliver quickly. You will be forced to take shortcuts, but omitting steps such as user testing, refactoring code, adding test coverage, and instrumenting analytics will make you short-term fast but long-term slow. This is Product Debt, and you will pay for it one way or another.

Tips:

Ensure that executives are truly allowing your team to make its own decisions. Only then can you commit to outcomes and be accountable for them.

• A SET Lead’s job is to work with leaders to make sure requests are 100% clear. Once requirements and scope are clarified and negotiated, make sure they don’t change (as much as possible). Teams can’t hit a moving target.
• Prioritize developing estimation skills. Allow the people doing the work to estimate how long it will take. Provide coaching and space. Challenge them to be thorough and methodical. Hold Function Leaders (e.g., engineering and design managers) accountable for estimation accuracy.
• Proactively reconcile top-down vs. bottoms-up expectations. SETs should push back on unrealistic expectations. If your team will be held accountable for a decision it did not make, discuss it with relevant leaders immediately.

I often see nominally independent product teams being micromanaged. Changing organizational habits is difficult and will take time. Focus your energy on advocating and coaching, and getting your CEO’s full commitment to a smarter way of working.