Product Org Design Demystified

How to design product teams for maximum output

During my whole career in product organizational design was always shrouded in mystery. Every once in a while senior management oracles got together for an esoteric session to decide on the future fate of the org. In the end, a new org structure was born and presented to the employees with a dash of surprise.

When I grew up as a leader to make my own fateful decisions, I realized I know little to nothing about the mechanics. Even though I was exposed to the org design decisions, because I wasn’t a part of those conversations - no cross-pollination was happening. How do you make an org design that delivers the maximum output? How do you define goals for teams? How do you allocate responsibilities? What’s the scope of a single team? What are the deadly sins to avoid?

I’ve had to learn this the hard way through trial and error. My biggest takeaway is you have to be transparent by sharing and discussing the decision-making logic with your direct reports. Over-communicate it if needed. Even if they are on the IC level today, they are the potential product leaders of tomorrow. Do not rob them of the opportunity to learn.

Below I would be sharing my thinking process on the matter, which I tried to structure in such a way that It would be easy for you to apply to your current org and come up with a quick diagnosis.

First Principles

No matter what org design structure you choose, it needs to comply with the core battle-tested principles. If it doesn’t, the output of your team would be diminished and you (as a manager) would be in the constant crossfire of escalating conflicts.

1. Clear goals
   The team needs to have a crisp target. It should be sensitive enough (based on experience / AB tests / reasoned assumptions) for the team to be able to move the needle. The goal altitude (steps away from key business variables) should be chosen based on the maturity of the org and we’ll zoom in on it later.

2. Autonomy
   The team needs to have a clear autonomous space for decision-making. Any competition in terms of scope creates room for conflicts and should be avoided (unless it’s intended).

3. Collaboration
   The team needs to have a full cross-functional bandwagon to efficiently collaborate and produce output.

Maturity-Driven Goals

In a market-fit/scaling stage startup, your product teams tend to be closer to the business, while in mature corporations the team might be focused on seemingly detached and very granular proxy metrics.

For example, you lead a b2b sales pipeline product on a scaling stage. The team’s focus is to either enable the business/to extinguish fires or drive a high-altitude activation/sales conversion metric. Now forward a few years to the future, the same product has already achieved maturity, now you identify a whole spectrum of end users (private sales managers/enterprises e.t.c.), some of your product teams might focus on personal account engagement (as it’s the strongest predicament to long-term retention and has been proven with a barrage of AB-tests).