The Characteristics of High-Performing Product Organizations
Every product-led organization strives for similar outcomes, like better innovation, exceptional customer service, and sustainable growth. But the road to get there can be rocky, especially if the organization struggles to blend the strategic vision with agile execution. But here’s the good news: Organizations with healthy, mature, and thriving product management practices have many common characteristics that you can learn to cultivate within your organization.
In this article, I’ll share the traits of high-performing product organizations so that you can better assess where your organization currently stands and opportunities for closing the gap between where you are and where you want to be.
Characteristics of High-Performing Product Organizations
The Customer Is ALWAYS at the Center of the Work
Did you know that 52% of teams think that their product and feature ideas are primarily inspired by customer feedback, but that only 1 in 10 teams actually capture feedback on the regular from available sources*? You have to walk the talk: saying you’re customer-centered or — cringe — customer-obsessed, does not make it thus.
When was the last time you evaluated how customer-centric your teams and processes are? Do you know how your teams are getting feedback, and where data and insights are coming from? Is it consistent across the org?
A customer-centered mindset focuses teams on driving better outcomes, so start asking these reflective questions to help you uncover how customer-centric your organization actually is.
Clear Alignment to Business Goals
Another characteristic of high-performing product orgs is clear strategic alignment between leadership and the teams executing the work. When Tuckpoint enters an organization, we always compare project plans against the leadership team’s priorities. And guess what we usually find? A major misalignment between what the top of the house says are the priorities and what the rest of the house is actually working on.
But high-performing orgs don’t have a big misalignment here. Leadership has taken an active role in setting “true north” and ensuring product teams are aimed in the right direction. And product teams set the milestones/KPIs to make sure they’re making good progress towards established outcomes. This approach leaves the mechanics of getting there to the delivery teams with the right skills and expertise.
In other words, leadership plays its part and knows when to let teams step up, and everyone is aligned on the strategic priorities.
There’s a Focus on Outcomes Over Outputs
Focusing on outcomes over outputs is essential because it ensures the product you build delivers tangible value and solves real problems. It’s easy for teams and leadership to get caught up on outputs, like how many features were built or if revenue increased. But when you have an outcome mindset, it shifts the focus to the bigger picture. Did we fix something? Did we deliver something new to solve an emerging customer problem? Did we increase market share by X% for a priority segment?
You know you’ve shifted to this mindset when people start talking in verbs rather than nouns (increasing, improving, furthering, etc.). Did we build something? Create something? Fix something? This approach emphasizes measurable impact, encourages a problem-solving mindset, and fosters adaptability based on market feedback and strategic objectives.
Teams are Empowered & Autonomous
In high-performing product organizations, employees and teams are empowered to take ownership, make decisions, and drive initiatives forward. This departs from traditional hierarchical structures where decision-making is confined to top-tier management. Instead, it champions a decentralized approach and gives autonomy to employees at various levels to act decisively, experiment, and learn from successes and failures.
I talk more about Empowered Execution in this article and why it’s critical for long-term success. The Cliff’s Notes version is that creating empowered and autonomous teams requires thoughtful design of roles, career paths, training and upskilling opportunities, team-based structures, and collaboration models. And all of these elements are necessary to support innovation, customer centricity, and productivity. This is another characteristic that many orgs say they embody, but when it comes to walking the talk, they fall short.
Decision Making is Data Driven
Data is critical to success in product orgs. When it’s working, you can see teams using data to prioritize and plan work. There’s a constant thread of experimentation and learning in their backlog, retros, and discovery cadences. And they think like scientists, creating hypotheses, testing, measuring, and iterating until they can reach a conclusion. Everything they build is instrumented — even if it’s basic or crude — so they can measure what they need in order to understand impact.
Continuous Discovery Practices Are in Place and Consistent
In a high-performing org, Product Discovery is ongoing, and there’s a general attitude that it’s never really “done.” All the members of a product team have an obligation to understand the landscape of their product, their users, and the market at large. Any single data point isn’t as crucial as synthesizing and translating these inputs into value themes and feature sets that help meet—and exceed—the demand for the product.
Well Defined Roles & Responsibilities
When people don’t understand their role or the roles of others, confusion abounds. This is especially common among digitally transforming organizations that have never run a product practice before and have not clearly outlined the new expectations and responsibilities of team members. When people don’t know how to do their jobs or collaborate, efficiency and productivity fall apart.
It’s the organization’s responsibility to define all of the roles and make sure there’s consistency on how jobs are defined more broadly. From there, individual teams can drill into the nuance required for their focus areas. It’s sort of a “think global, act local” mentality.
Unified Business and IT Teams
A major red flag I see within orgs is an “us vs. them” culture between business and technology. This attitude is not conducive to delivering at speed because people aren’t unified. High-performing orgs don’t tolerate any sense of distance or otherness between business and IT — in fact, they’re tightly knit.
Here’s what it should look like within an organization:
If you’re now asking yourself whether the product function should sit within business or technology, you’re starting to get it. My personal bias is that standing up product within business is the right way to go 99% of the time. As painful and as slow as it can be initially, the short-term pain is worth the long-term gain. Here’s some more rationale for this line of thought.
Standardized Product Operations
Since there are 101 ways to “do” product, the best product organizations are intentional about creating a consistent product practice for product people across the org. Think of this as the stuff that keeps your product practice healthy within your organization.
To do this well, you’ll need to dedicate resources to documenting, codifying, and evangelizing a standard set of systems, tools, and structures that can help ensure the product management discipline is practiced consistently across your organization. Doing this will help remove friction and allow teams to move faster because they aren’t bogged down with the “how.”
I always joke that things are headed in the right direction when your product people start sounding like broken records, using phrases like:
What problem are we trying to solve, and for whom?
How does that align to our outcomes?
And, when you ask them any question about the product they answer: “It depends.”
When you hear these annoyingly often, you know you’re doing it right.
In Conclusion
Better innovation, exceptional customer service, and sustainable growth are only achievable if the health or your product org is A+. With these characteristics in mind, now might be a good time to do a quick organizational evaluation of your org’s:
Strengths
Biggest opportunities
Barriers to success
This sort of evaluation isn’t always straightforward or easy to self-diagnose. Sometimes folks are just simply too close to the problem and too biased to see the forest for the trees. If you think you might need some support on this front, reach out. Our team is dedicated to helping leaders navigate the underlying operational challenges present in today’s digital and operating model transformations. In other words, we’re here to make your life easier and help your product org run smoother.
For related reading, check out these resources:
* According to the ProductBoard 2020 Product Excellence Report