Founders and Product leaders always need clarification on how to build the best organizational structure to drive expected results. Over the years, I’ve seen five types of organizations exist for product teams. They are typically defined by either product maturity stage, company size, or leadership culture. Each has pros and cons, and I want to share some definitions and advice for upcoming leaders to build efficient teams. Understanding these models’ nuances can help founders and product leaders build effective and aligned teams with their core mission.
- Sandbox.
If the product is still young, you will work by initiative. Teams share the workload to ship value fast to customers. If the business is relatively small, teams often hire their first product managers and designers, who must figure out how to work with production. Leadership assigns the problems to product managers with the most appropriate team members to solve them. Teams are autonomous and work on shipping new iterations of the MVP quickly. The goal is quick fixes, or they focus all teams on launching a significant initiative to turn the business around.
When to use it.
This approach is ideal for small teams starting. You will need a flexible environment and are still looking for what product features will work for their market. This Founder-led approach leads most initiatives in which we find a minimal critical mass of clients for your product. This structureneeds to be flexible enough to dedicate SWAT teams to launch an MVP or resolve impromptu challenges a potential client throws.
When to stop.
As the business grows and the product expands on more complex solutions, you will reach a limit on team mobilization and innovation coherence. We start to see initiative drags, tech and experience debt pile up, and customer engagement stagnates. Team leads, or senior members will soon be asked to develop domain expertise instead of being tasked with business topics. These topics could include items like fulfillment, payment, or contracting. The business can fall into a feature factory mode and execute the sales or CEO/CPO shopping list, created to avoid frustration while not changing the operation to form teams or pods dedicated to specific product OKRs.
- Customer Lifecycle Objective.
Focus on product issues arising from user research or product metrics. You will see this, especially with products that have reached a specific market-fit. You will need to seek to refine the targets of the leading growth indicators like acquisition, adoption, retention, and renewal. We can assign a particular team or pod to solve customer onboarding or pricing optimization. Teams are temporary but laser-focused on tackling a product challenge quickly.
When to use it.
Customer lifecycle objective frameworks for product teams are ideal for software companies with good discipline. They should know their market, customers, and growth ideals. They focus on data and understand their product pillars and how to measure the impact of their initiative. You must build teams to solve business problems with a great cadence rather than piling on features. Product teams become experts on business cycles over beginning industry savvy. Create a continuous focus to make the customer experience ideal while creating value for the company. It’s useful for companies that have reached their potential and want to expand their market footprint. For example, you will engage product marketers, engineers, CSM, and designers to reduce time to value in the onboarding scheme for low-maturity customers within a quarter. This specific approach is defined and time-bound, which makes it perfect to generate results or move on to another mission.
When to stop.
It requires structure and Olympic discipline from the founders/executives regarding the priorities to work according to the business objectives. You must be dead-focused on your North Star Metric, and your operation runs on a dime. You can set initiative OKRs on time without any pitfalls. This rhythm can be overwhelming and rigid if you want to shift business focus or want to innovate. Shifting to this operation mode can be difficult initially, and communication can be less straightforward than listing features to be delivered.
- Product Function.
Separate the teams by the business solutions a product tackles. For example, a marketing automation product could have a team for data management, another for automation, and another for analytics and reporting. Ideally, we aim to have all product functions (PM, design, marketing, engineering, and Account Executive) in the same group focusing on product growth. The critical success of this grouping is each team is attached to a component of the product growth flywheel and can impact the most vital business metrics.
When to use it.
It is ideal for platforms that include several products that affect different types of users or problem spaces. When the product reaches maturity, we often see the role of GM/VP to lead the group; the person is responsible for defining the direction and product priorities to achieve corporate targets. Allows teams to become experts in a specific product problem space. We will seek to develop a sub-expertise based on the team’s typical customer life cycle (onboarding, adoption, expansion).
When to stop.
It can become cumbersome to manage due to the creation of silos between teams. You must create chapters and domain pods or be rigid on documentation to help the knowledge flow between teams. For example, you might be forced to develop product expansion committees between product function leaders to align how to upsell customers between groups. There is also capacity and resource sharing, and with budget restrictions, we will reduce sub-performing teams for other teams, impacting product quality. We must work with shared resources (marketing, data, research) to grow our part of the product, where alignment meetings would be necessary. If the overhead of alignment becomes the leader’s primary focus, you might need to shift or adapt to remove the politics.
- Platform Teams
Back-office systems and services enable other product teams to build upon each other. Platform teams are the backbone of product development, providing the necessary infrastructure. This includes APIs, data pipelines, or service frameworks, which other product or feature teams utilize to speed up the go-to-market process. Leadership in platform teams focuses on long-term technical vision and building scalable, reliable systems or tools to support client-side teams.
When to use it.
This model is ideal when you offer a portfolio of multiple products. You must scale where efficiency and consistency are paramount across different products or features. It benefits businesses that aim to reduce redundancy, improve team collaboration, and streamline the development of tools powering growth. Platform teams empower other teams by removing technical hurdles and enabling them to deliver value to the customer faster. They will also provide tools for professional services to build industry-specific offers. For example, you can have a team make the infrastructure and internal tools to help marketplace product managers sell templates and models to help customers adopt business process automation.
When to stop.
There are challenges when platform teams become bottlenecks, or their objectives diverge from those of consumer-facing product teams. If platform initiatives start to delay product delivery or if the technology becomes too generic to address specific product needs effectively, it’s time to reassess. Generally, these teams are pure centers of cost and can hurt the bottom line if their work stops providing operational gain. This disconnect between platform services and the actual needs of product teams will need alignment around current product business objectives.
- Hybrid Teams
Hybrid Teams blend elements from different organizational structures to suit an initiative’s needs and market dynamics. This approach often combines the focused goals of customer lifecycle teams with the cross-functional collaboration of product function teams. It also still means leveraging platform teams’ foundational support.
When to use it.
This approach suits organizations experiencing rapid growth or transformational change from leadership change or strategic alignment. It’s also beneficial for companies facing diverse market needs or those needing to balance long-term platform development with short-term product goals. Hybrid teams are adaptable, allowing quick strategy shifts driven by market feedback or internal priorities.
When to stop.
While flexibility is a strength, it can lead to confusion and misalignment if not managed carefully. This model would not be beneficial if teams become unclear about their priorities or current business objectives. If the balance between autonomy and collaboration is lost, it may be time to reassess the hybrid models’ effectiveness. Additionally, simplifying the structure or defining a better current business strategy might be necessary if organizational complexity outweighs the benefits of flexibility.
Further Considerations:
Cultural and Leadership Impact: The role of company culture and leadership style could influence each model’s success. If you have strong domain expertise amongst the leadership group, go with the product function mode. A company with a revenue challenge might momentarily use the sandbox mode to solve a crisis.
Market and Industry Fit: Different models work better in different industries or market segments. An extensive product portfolio dedicated to enterprise solutions requires a platform team to support professional services. It also demands product managers deliver custom or vertically specific solutions. A product solving one business problem or niche market might select the customer lifecycle approach.
Metrics and Success Evaluation: You should consider your business organization like a product. Set operational goals and measure success in delivering value to customers and the happiness of internal teams. If you can reach your target, determine which organization would suit your needs for a certain period.
In conclusion, there is no one-size-fits-all approach to structuring frameworks for product teams. Your chosen strategic framework will influence the evolution of your product within your business strategy. It’s essential to approach organizational design as a dynamic process. This will allow trial and error to guide you to the best setup for your company. Again, all product organizations have strengths and weaknesses but do not keep doing the same thing and expect different results.
This article was created by Wavo.me Former Product VP Jean-Sébastien Chouinard for an exclusive release with Products That Count. Explore all of our Product resources here.
About the speaker
I\'m an accomplished product leader with a proven track record of success in product strategy, growth and marketing. With over 18 years of experience working for top-tier fast-growth companies such as Adviso, Landr, Moment Factory, and Wavo, I deeply understand how to scale a product organization and have a wealth of knowledge in the technology business. I have a solid background in building and leading product teams and developing effective go-to-market strategies that have resulted in significant growth in user base and revenue. My expertise in translating the vision and objectives of founders into actionable plans where execution drives results for the business and delights customers. With my Fractional Product and Growth Leadership offer, I focus on helping midsize technology-oriented companies build or retool their product development approach and growth strategies. My expertise lies in building scalable operating models and growth strategies for product-led companies, such as Product Management, Product Design, Marketing, and Revenue teams. My superpower relies on quickly understanding your technology company\'s main business challenge, finding solutions and bringing incremental change without breaking your operation.