As businesses increasingly rely on software solutions to drive their operations, the maturity of a company’s product operating model becomes a key determinant of its overall business performance. Product and Platform Operating Models are having a profound impact on a company’s success, using the correct strategies and practices can propel businesses towards higher operating model maturity.
Product and platform operating model
Product and Platform Operating Models change the way companies develop and deliver software solutions. Instead of traditional hierarchical structures, these models foster cross-functional teams that work autonomously to create scalable and reusable software solutions. Such teams are able to make critical decisions independently, resulting in faster software feature launches, improved code quality, enhanced user experiences, and efficient development processes.
The benefits of embracing this model are substantial. Companies that achieve high maturity in their Product and Platform Operating Model witness remarkable financial outcomes. Research indicates that these companies enjoy greater total returns to shareholders and operate with higher operating margins.
Impact on business performance
The link between operating model maturity and business performance is profound. Companies with a mature Product and Platform Operating Model experience a ripple effect of advantages across all aspects of their business. Notably, higher customer engagement and brand awareness are among the most significant benefits.
One key driver of this impact is the “ways of working” within the organization. This includes product management practices that prioritize innovation, customer-centricity, and efficiency. A well-implemented Product and Platform Operating Model brings these practices to the forefront, propelling the company forward.
Innovation and capability areas
The Product and Platform Operating Model places innovation at the core of its approach, and its impact is closely tied to two critical factors: tooling and culture and talent management practices.
The gap between top-performing companies and their counterparts becomes most evident in specific capability areas. These include team interaction, product management practices, backlog prioritization, funding allocation, and technical debt management. Addressing these areas effectively can propel a company towards higher operating model maturity and unlock its innovation potential.
Implementing the model
Implementing the Product and Platform Operating Model requires a deliberate and strategic approach. Companies seeking to embrace this model must take several essential steps:
Resolve product and platform dependencies: Maintaining dependencies between products and platforms is crucial to ensure smooth operations. This involves breaking down silos and fostering collaboration between teams.
Establish a consistent product development life cycle: A well-defined and consistent product development life cycle cannot be understated when aiming for effective execution. This life cycle should align with the company’s goals and objectives.
Adopt modern product management and engineering practices: Utilizing contemporary product management and engineering practices is vital. This includes Agile methodologies, continuous integration and delivery, and user-centered design.
Foster a culture of innovation and talent management: Cultivating a culture of innovation is essential. This means nurturing a workforce that values creativity, encourages experimentation, and actively seeks opportunities for improvement.
Strategic focus areas
To succeed in implementing the Product and Platform Operating Model, companies should prioritize five high-impact capability areas:
- Define Product Team Interaction Models: Clearly defined interaction models between product teams foster collaboration and efficiency.
- Align Backlogs with Market and Business Goals: Ensuring that backlog items align with market and business objectives keeps the company on course.
- Tie Funding to Measurable Goals: Allocating resources based on measurable outcomes ensures that investments yield meaningful results.
- Manage Technical Debt: Vigilantly addressing technical debt prevents it from becoming a hindrance to innovation and development.
- Institute Processes and Tools for a Product Culture: Establishing processes and tools that promote a product-centric culture is essential for long-term success.
The Product and Platform Operating Model is a shift in how companies approach software development and product management. The impact on business performance is profound, driving higher customer engagement, brand awareness, and financial success. Implementing this model requires a strategic approach that focuses on resolving dependencies, establishing consistent processes, embracing modern practices, and nurturing a culture of innovation.