There are various ways to structure a product management organization, and the best option for your company will depend on several factors. As your company develops, the number of teams increases, making it harder to coordinate them. It is time to cut the cake and create a product management structure. Product Management is at the intersection between business, customers, and market. It has been a key enabler for technology-driven disruption and business results.
Many leaders are challenged to build best-in-class product capabilities and structure their organizations to achieve the product roadmap. In this article, we are going to talk about them.
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What is Product Management Organization Structure?
Product management organization structures can vary greatly from company to company. There is no one right way to organize product managers, but there are some common approaches that many businesses take.
One common approach is to have a centralized product management team that focuses on strategy and planning for all of the company’s products. This team may be responsible for developing new product ideas, researching customer needs, and creating roadmap plans. The team may also work closely with other departments, such as engineering, marketing, and sales, to ensure that products are developed and launched successfully.
Another common approach is decentralizing product management by giving each product its dedicated team. This can be an effective way to manage products if a large number of them or if they are very different from each other. This approach can also help to ensure that each product team is focused on its own goals and objectives and is not bogged down by the tasks of other teams. Clear communication and a well-defined organizational structure will help to ensure that products are developed and launched successfully.
Which Product Management Model is Right for Your Business?
Product management is a vital process in any business, small or large. It’s responsible for developing and bringing products to market, managing product life cycles, and overseeing product development. But with so many different models and methodologies, how do you know which is right for your business?
There are two types of traditional models: the functional and general manager (GM) and the new platform model.
The functional model separates engineering and product functions. As peers, these organizations have a chief product office (CPO) and chief technology officer(CTO) reporting to the CEO. This works well when the product is stable, and scale is important.
General managers (GMs) are responsible for the product and engineering resources. These resources are distributed across business units. The GMs can drive prioritization more quickly because they are accountable for the entire business outcome.. This model tends to work best for organizations solving for skill, for example, when developing new technologies targeted at an industry vertical or other niches.
How can you create a product organization structure?
There are a few different ways that you can go about creating a product organization structure. The best approach for your company will likely depend on some factors, including the size of your company, the products you sell, and how your sales and marketing teams are organized. These are the most popular ways to do it:
Functional structure
The organization can be divided into different functions or departments by using a functional structure. The highest-ranking position in the organization is the CEO. The position of employees is determined by their specialties and skills in different departments (product, engineering, and design, marketing, etc.).
A head heads each department (for example, the chief production officer (CPO), or the chief technology officer(CTO) in an engineering department).
Companies that follow a functional model may have product leaders with more focused duties. These leaders may be involved in product strategy development, product roadmap creation, go-to-market strategy, consistent UI/UX design, or representing customers within the company.
Flat structure
A flat organizational structure has little or no middle management between staff and executives. Startups use this structure to grow because it’s free from hierarchy-related pressures and increases employee productivity.
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Product/feature-based
This org structure separates your organization’s by-products, projects, or features. Thus, you assign one product manager per product/feature who ensures that teams responsible for a specific product don’t overlook user research, feature prioritization, data analytics, budgeting, and achieving business and product goals.
Also, product managers from different areas should communicate with each other to discuss common issues for the whole suite of products.
User persona Based
This PM structure divides the responsibility of each product manager according to the user personas that your company serves and the problems they face. By organizing by user personas, you can satisfy different customer needs by designing products and features that are specific to their needs. Product managers in companies with such structures are responsible for informing the team about user needs and problems and deciding which features to prioritize and release.
What are common ways that organizations structure their product teams?
You can organize your product development team around your organization’s different products or product lines, the functional area each team supports (whether a product feature or a customer segment), or a specific business or customer need.
Product or product line
A product leader oversees each product or product line. Although they are only responsible for one product, they also manage many initiatives related to that product. This includes conducting market research, maintaining a product roadmap, considering customer feedback, and working with the development team to create new features and functionality. This structure is ideal for large companies with multiple products.
Product feature
A product leader owns a discrete focus area and communicates with other product managers about cross-dependencies for the suite of products. The chief product officer ensures visibility and cohesion across the broader product organization. This is an advantageous structure for organizations with complex offerings.
Cross-functional collaboration
Cross-functional teams are made up of people with different functional skills working together towards a common goal. These teams often include a product owner, product manager, coach, scrum master, developers and quality assurance (QA). This method works well for large organizations with enough product and development team members to justify the creation of smaller teams.
Customer segment
Product managers are responsible for different groups of customers, each with different needs and expectations. One product manager may be responsible for enterprise customers, while another might only deal with small or mid-sized businesses.
Customer journey stage
Product managers focus on increasing the product’s value during a specific stage of the customer experience. This includes the first encounter with the product, onboarding, adoption, continued use, and continuing support. This approach is most effective in companies with a strong product offering and the resources necessary to address each customer journey phase.
Performance metrics
Every product leader has a set product goal or key performance indicator (KPI) that they work on across all product features. This helps to get better results. If you have a mature product with established KPIs, it can be a good idea to organize your product team according to performance metrics.
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