The Partial Success of the Agile Revolution
Almost two decades ago, the Agile revolution sought to reshape how we develop software. The idea was an iterative approach that promised a new era of efficiency and adaptability. However, this transformation largely remained within the confines of software development itself. Organizations adopted Agile methodologies for their software projects, but the broader organizational structures kept with their traditional ways of working.
As a result, software development processes became iterative, while decision-making around what to build still followed the classical, top-down approach. In essence, Agile methodologies succeeded in revolutionizing software development, but arguably failed in making entire organizations agile – with startups being a notable exception.
Product Teams vs. Feature Teams
Startups embraced the Agile philosophy in its entirety, with resources like Eric Ries’ The Lean Startup and others guiding the process. This adoption led to a more holistic approach to product development, integrating iterative processes into the core of how these startups operated. Meanwhile, larger corporations continued to operate in silos, with a distinct separation between business and IT. This siloed approach often resulted in what Marty Cagan calls ‘feature teams’ in the SVPG article “Product vs Feature Teams”.
In the article, Cagan distinguishes between two types of teams – product teams and feature teams. Product teams are cross-functional, outcome-focused, and empowered to solve problems in innovative ways that benefit customers and the business. Feature teams, on the other hand, focus on delivering specific features or projects as dictated by business stakeholders. The article emphasizes the significant differences in the roles and responsibilities of product managers in these two types of teams, particularly in terms of ensuring value and viability. Empowered product teams, which are more common in top tech companies, foster collaboration and innovation, whereas feature teams often limit the scope and effectiveness of product managers and other team members.
What Product-Led Actually Means
Product-led ideology emerged as a solution to bridge this gap between business and IT. This approach advocates for cross-functional teams that include a business perspective as a key component. Rather than a unidirectional flow of ideas from business to IT, these teams operate as cohesive units with holistic responsibility for their products or features. They are not unlike a mini-organization in itself, with a product manager playing the role of a mini CEO, a tech lead ensuring technical feasibility, and a designer focusing on usability. This collaborative environment fosters continuous input and innovation.
The limitation of the Agile movement was its focus exclusively on the software development process, especially within larger organizations. A product-led approach demands a major mindset shift, where the focus is directed toward creating value for customers. It's about organizing around the value being built, not just individual contributions – a model more than familiar to Silicon Valley.
A Product-Led Transformation
Many companies have tried to adopt a product-led approach, but tend to face significant challenges due to its foundational impact on their organizational architecture. In our books, transformation shouldn’t be an all-encompassing, immediate overhaul. Rather, we find it makes more sense to begin by identifying specific areas of the business that are more ripe for this change. We advise to start small, maybe with a new project or a segment of an existing product. The transformation should occur at all levels simultaneously, backed by the support of everyone from top management to the frontline workers.
Adidas is a great example of this type of transformation. They restructured their IT department from seeing it as a cost center to a product-oriented team organization, as described in Matthew Skelton and Manuel Pais’ “Team Topologies” book. This reorganization led to a substantial increase in their digital products’ release frequency and quality.
New Ways of Thinking, Operating, and Creating Value
The shift to a product-led way of working isn't just about organizational structure; it's actually, more than anything, about being customer-centric. This approach involves continuous interaction with customers – validating ideas in real-time, a principle that Agile aimed for but only achieved in software development. Consider the example of airlines’ in-flight entertainment systems. They aren't products in the traditional sense, as they don't directly generate revenue. However, applying a product mindset helps in understanding their value and viability as part of the larger service offering.
In summary, transitioning to a product-led organization is not just about restructuring teams; it's about embracing a new way of thinking, operating, and creating value. This shift is critical for businesses to remain relevant and competitive in increasingly fast-paced markets.
