The 6 core principles for structuring high-performing product teams (2024)

FUNDAMENTAL OF PRODUCT MANAGEMENT: PEOPLE

Structuring product teams is a crucial task for a product organization to scale and an important factor in maintaining the ability of the organization to move quickly as it grows from 2–5 to even 100s of product teams. It’s also a significant factor in keeping teams feeling empowered and accountable for something meaningful yet contributing to a bigger vision where the sum is greater than the parts.

The challenge with product team structures is that there is never a single right answer and it can be a moving target as the dynamics of the business environment and needs change. While there can be a variety of factors to account for, here are 8 core principles to consider when (re)structuring product teams.

1. Size the team

The minimum size for a product team is 3 with one product manager and two engineers and on the higher end, every individual contributing product manager and designer should generally be linked up with 10–12 engineers/developers for a meaningful level of work.

2. Product vision and strategy

The vision is the inspiration for the teams and the direction they will be heading in the longer term (the term depends on the priorities of the organization and can be from 12–36–60 months in scope). The strategy will describe the milestones the team will need to cross as it moves toward the grand vision.

3. Minimize interdependencies

While dependencies can never be eradicated, minimizing them will help bring agility and nimbleness to teams and make them feel in power and more autonomous. It is the core responsibility of the product leadership to continuously monitor for dependencies as business dynamics change and dependencies shift.

4. Provide ownership and autonomy

To attract and build a team of missionaries, people need to feel empowered, in control, and accountable for a meaningful product offering. This will require careful diligence over how product suites are split across teams while also minimizing interdependencies.

5. Maximize shared services

We don’t want to reinvent the wheel every time, so it’s crucial to have shared services (or otherwise termed core services or platform business) of features across product suites for all teams to use while minimizing delivery efforts and increasing agility and reliability. Another important factor to consider here will be the degree of interdependency created which needs to be minimized.

6. Continuous (re)alignment

This will entail alignment with four key factors:

• Technology architecture: the technology architecture is built to fulfill the vision and set strategies. Teams need to be structured in such ways that they do not feel constantly fighting with the architecture, challenged with increasing interdependencies, and moving slowly. It’s critical to align team structures with shared services also
• Customers: to maximize economic value, teams need to be set up in structures that fully understand and empathize with the customers’ needs. For example, in a marketplace such as Amazon, product teams need to be structured to deliver for the buyers’ and suppliers’ needs and seldom horizontally across the two
• Business units: to align with financial accountability needs, it’s crucial that product teams take independent business units into account when forming so that the business can exclusively measure performance and make sound economic decisions
• Investment strategy: while it’s fine to align with current business operations and sources of value creation, product team structures need to consider future business and consumer needs and have teams that experiment with future offerings that have the potential to generate growth and revenue. How the forward-looking or investment strategy team is structured (i.e. horizontal or vertical product portfolio management) will depend on the ecosystem dynamics and culture of the business

There is never a “perfect” product team structure. The structure is more of a moving target that changes based on the organization’s needs. This means that it would be meaningful to review the team structure every 6 months or year depending on the speed of change in your market environment. And have as many members of the team involved in the process.