I’ve been catching up with the latest Fast Company, Forbes, and Inc. articles. One post resonated with me, The Importance Of Embracing A Product Operating Model on the Forbes Technology Council site.

Authored by Craig Strong, a Forbes Councils Member (sounds impressive, but I was approached to apply a while back. I honestly thought it was a privilege until I discovered the extortionate annual fee). Craig is Global Practice Manager at AWS and helps enterprises transform their operating models to innovate and grow.

Craig’s article explains “As companies scale, they can become more complex, resulting in higher costs and reduced speed and agility. Through scaling, functional silos emerge that can create operational boundaries and knowledge silos with more handoffs, reducing flow and quality. All these aspects work against each other, impeding the larger common goal of delivering value to customers and performing efficiently as a company.”

In an era where complexity and rapid change are the norm, traditional, one-size-fits-all operating models are falling short. Organizations striving to achieve agility need a more nuanced approach—one that integrates multiple interconnected operating models, each tailored to specific aspects of the business.

Over the last 18 months I’ve been working with various client organizations, endeavoring to build resilience, adaptiveness, and agility into their businesses. We’ve been exploring a different level of operating model, one that reflects the way products and services are enabled and operated. One where teams are formed around the ownership of products/services and have small, stable, permanent teams who are accountable for them.

This new Product Operating Model has shifted the culture from project mode (project being a temporary endeavor aimed at delivering a specific outcome within defined constraints (scope, time, budget) and product mode (product being continuous, iterative approach focused on maximizing value by evolving a product or service to meet user needs over time).

This additonal-level of operating model has shifted the culture from projects to products, meaning that product teams are formed around the ownership of products and have small, stable, permanent teams that are accountable for them.

From this perspective, what is a Product Operating Model.

Product Operating Model

A Product Operating Model is a structured framework that defines how an organization designs, builds, and manages its products (and/or services) to deliver value to customers and achieve business goals.

It encompasses the roles, processes, tools, governance, and cultural elements that guide product development and delivery in alignment with the organization’s strategy.

Purpose of a Product Operating Model

• Alignment: Ensures all teams work toward the same strategic goals.
• Focus: Prioritizes customer value and business outcomes over siloed objectives.
• Efficiency: Streamlines processes and reduces waste through clarity and standardization.
• Agility: Allows the organization to respond to market changes and customer needs rapidly.

By embedding a Product Operating Model, organizations can transition from traditional project-based approaches (project mode) to a product-centric mindset (product mode), enhancing innovation, customer satisfaction, and long-term sustainability.

Key Components of a Product Operating Model

Vision and Strategy

• Defines how the organization’s overall business objectives translate into product-specific goals and priorities.
• Aligns the product strategy with customer needs and market opportunities.

Product Lifecycle Management

• Encompasses the stages of product development: ideation, discovery, delivery, launch, growth, maintenance, and retirement.
• Includes processes for managing the backlog, roadmaps, and continuous improvement.

Team Structures and Roles

• Defines cross-functional teams (e.g., product managers, designers, engineers, marketers, and analysts) and their responsibilities.
• Includes governance for leadership involvement and decision-making.

Ways of Working

• Establishes workflows, ceremonies, and collaboration practices (e.g., Agile, Lean, SAFe).
• Focuses on iterative and incremental delivery to adapt quickly to changing customer needs.

Metrics and Measurement

• Includes key performance indicators (KPIs) and objectives and key results (OKRs) to evaluate success.
• Tracks metrics such as customer satisfaction, time to market, product adoption, and revenue impact.

Customer-Centricity

• Prioritizes customer feedback and data to shape product development.
• Uses techniques like design thinking, Lean UX, and user research.

Technology and Tooling

• Defines the technology stack and tools used for product management, development, and collaboration (e.g., roadmapping tools, DevOps platforms, analytics dashboards).
• Supports automation and scalability.

Cultural Principles

• Encourages a mindset of experimentation, learning, and collaboration.
• Promotes empowerment, accountability, and transparency among teams.

Governance and Decision-Making

• Outlines decision-making frameworks for prioritization, investment, and escalation.
• Ensures alignment across teams and stakeholders.

Funding and Portfolio Management

• Shifts from project-based funding to continuous funding models aligned to product outcomes.
• Incorporates Lean Portfolio Management to prioritize investment across the product portfolio.

Closing Thoughts (for Now)

The transition from project mode to product mode reflects a cultural and operational shift towards agility, customer focus, and sustainable value delivery.

My former project, program, and portfolio management colleagues, will be happy to know, that projects are often necessary for specific initiatives. But for the organization as a whole, product mode ensures continuous alignment with user needs and strategic goals.