Organize Product Teams Around Value Streams, Not Architecture

Key Quotes

"So when I think about building and structuring product management teams, I like to think in terms of value streams. So what I do is I map out what we deliver to our customers and what value it brings, and then I try to connect it all the way back to the platforms and the people who are building it."

Melissa Perri explains that structuring product management teams should be based on value streams. This involves mapping out what the company delivers to customers and tracing that value back to the underlying platforms and individuals responsible for building it. This approach ensures clear ownership and connection to customer value.

"One big issue I see in many large corporations is when there is one person reporting into one person, reporting into one person, reporting into one person. And the worst that I've seen is actually 15 people all the way up to the top, just one person all the way down."

Melissa Perri highlights a common problem in large organizations: excessively long reporting chains. She notes that having too many layers of management can hinder decision-making speed and efficiency. This structure can lead to individuals focusing on their immediate initiatives rather than broader strategic goals.

"So think about what do you need to release that value? How much of that time do you need from these different people? And how do we make sure that we're all balanced, so we have the skills that we need to get it out there, and we have the time commitments and the people dedicated to actually do that."

Melissa Perri emphasizes the importance of balanced teams for efficient value delivery. She advises considering the necessary skills and time commitments from various individuals to ensure that teams have the resources needed to complete their work. This balance reduces handoffs and waiting times, accelerating the release of value.

"One thing you do not want to do is organized by architecture. So when people first started to introduce product managers and product owners out into their company, I saw a ton of companies organizing by architecture. So it was like, there is an API, we have to manage that API, we will put a PO around it."

Melissa Perri cautions against organizing teams solely around technical architecture. She explains that when product owners are assigned to manage specific components like an API, they may focus on optimizing that component rather than the overall customer value it delivers. This can lead to inefficiencies and a disconnect from strategic goals.

"There should be good coverage over many components, many technical components from a product manager, so that they have choices and those different areas can be moved to solve different problems in a large swath of a job to be done."

Melissa Perri suggests that product managers should have broad oversight across various technical components. This allows them flexibility to reallocate resources and adapt to solve different problems within larger "jobs to be done." This approach ensures that technical capabilities can be strategically applied to meet evolving customer needs.

"But you really want to make sure that you anchor it back to the value streams and figure out what makes sense for your context."

Melissa Perri stresses the importance of grounding organizational design decisions in value streams. She advises that the specific structure should be tailored to the unique context of the company. This ensures that the organization is aligned with delivering customer value effectively.