A product operating model describes how a company organizes itself to build products: who decides what gets built, how those decisions are made, and how teams are held to results. The term was popularized by Marty Cagan of Silicon Valley Product Group.
Below is what a product operating model means, its core principles, how it differs from Scrum, and how we apply it at Wise Minds, including where we hold back.
What is a product operating model?
It is the operational structure behind how a company decides what to build, who makes that call, and how the decisions actually come about. It is not a process framework and not an org chart. It is the combination of team structure, decision rights and ways of working that determines whether a company consistently builds the right things.
The core principles of the product operating model
Empowered product teams, not feature teams
A feature team receives a spec and builds it. An empowered team receives a problem to solve and the room to decide on the best solution.
Outcomes over output
Success is not ten features shipped this quarter. It is whether those features produced a result that mattered to the business.
Continuous discovery
Teams that own outcomes need a steady stream of real user contact and usage data, not a single research phase at the start of a project.
Strategy that gives direction
Leadership sets the “why” and the boundaries. Teams decide the “how”.
Why most teams still build on assumptions
Most clients we meet do not know the term, and do not know what it asks of them. What we see far more often is a team building the next version of its product on assumptions and nothing else. Nobody checks whether the last release moved anything that mattered.
How we apply the product operating model at Wise Minds
We do not follow it as a fixed framework. We use what is useful, and we are still moving toward it ourselves.
It starts with a strategic roadmap. Before any building, we decide on the outcomes for each period of time. Whether a team is in-house or on the payroll of another firm should not matter: the people should be aligned to the right outcome, not to vanity metrics.
Our people join the client’s meetings in many environments. When that is not possible, we discuss every client meeting in detail afterwards. We also involve our developers more and more in product ideation, goals and decisions.
It also works with a small, shared setup. A product expert who works across several teams can switch context quickly and plan deep work for each product. In our experience that is much more efficient. For how those shared roles fit together, see how we structure a software development team.
Product operating model vs. Scrum
The two conflict in practice. Scrum puts the client outside the team and adds a product owner who represents the client. That is how Scrum plugs the team into the world of the client, and indirectly the client’s own customers. The product operating model goes further: the whole team, including development, gets involved in deciding what to build. We have our challenges in combining both.
Why we are moving toward it
Writing code has become so fast that the bottleneck of a product team is shifting to leadership and direction. If developers can decide what to do next themselves, that bottleneck goes away. A product manager or product owner no longer needs a huge backlog ready before a developer can start.
The difficulty is that this takes a specific kind of developer. You cannot do it with developers who only focus on writing code.
Where we hold back
Outcomes over output and strategy that gives direction are principles we fully agree with. Team empowerment is becoming more important too, but it does not mean losing a clear chain of command. Without one you lose accountability.
We also do not see continuous client contact as strictly necessary, and many of our people do not ask for it.
Should you move to a product operating model?
Yes. Let us look at what it would mean in your situation. We believe it can lead to great outcomes.
A Wise Minds product unit is the way we work with it today. If you already have developers and want more structure around them, see staff augmentation. If you are starting from scratch, see hiring a development team. Related reading: the difference between a product owner and a product manager.
For the difference between teams that are handed features and teams that own an outcome, see feature teams vs. product teams.
Frequently asked questions
Is a product operating model just Agile under another name?
No. Agile describes how software is built, in sprints or iterations. A product operating model describes who decides what gets built and why. You can run Agile ceremonies without empowered product teams, and empowered teams do not need a specific Agile framework.
Do we need a Chief Product Officer to run a product operating model?
Not necessarily, at least not at first. What matters is that someone has real authority over product decisions, whatever their title.
Can a small team run a product operating model?
Yes, often more easily than a large one. The core is decision-making authority and a link to outcomes, not team size.
What is the difference between a feature team and a product team?
A feature team builds what it is told to build. A product team owns an outcome and decides how to achieve it.
How is this different from having a good product manager?
A strong product manager helps, but the model is bigger than one role. The whole team needs the authority to make decisions, not just one well-informed person while the rest carry out a spec.