How We Work: Product Operating Models in Practice – Product at Heart 2024
The concept of a product operating model—an overall set of rules that frames and guides how you go about your product work—is not new, but it’s been gaining attention over the past year, especially thanks to high-profile books like Product Operations by Melissa Perri and Denise Tilles and TRANSFORMED by Marty Cagan.
This is why “Product Operating Models in Practice” was one of the themed sessions for Product at Heart 2024, in addition to: Realizing Your Potential as a Product Manager, Blueprints for Collaborative Success, and Rethink Value Creation.
This themed session featured three 20-minute talks and a quick round-up moderated by Shaun Russell. During the Product Operating Models in Practice session, we heard from:
Tamer
Flavia
Gopika
In this post, we’ll share some highlights from each talk. If you’d like to explore any of the content in more detail, check out the recordings from each session.
Tamer’s talk: Unstoppable
Flavia’s talk: No One-Size-Fits-All: Successful Product Delivery in Practice
Gopika’s talk: Turning Point: How to Build Structures for 180-Degree Pivots
Tamer El-Hawari: Unstoppable
Tamer began his talk by describing a few common scenarios product people encounter:
Teams are working in different directions.
We have conflicts about priorities. We have no clear path forward.
We act on insufficient data.
We are asked to do too much at the same time and we’re busy firefighting.
As a result of all this, we know all too well what burnout feels like.
And once you’veexperienced enough of these frustrations, you might be tempted to follow in the footsteps of this product manager who “stopped doing product management and became happier as a result.”
And while Tamer admits that this post did make him pause for a millisecond, he quickly decided it wasn’t the right path forward for him. “Honestly, I didn’t sign up for that. I’m here to build great products,” said Tamer.
What does a good environment actually look like? For Tamer, it involves focus, alignment, direction, and insights.
But we can’t automatically assume we have all these elements in any given environment. We will likely need to take intentional action to achieve them.
So how can you adapt and find a way forward if you find yourself in a less-than-ideal environment?
Tamer identified four elements that can help you become unstoppable:
Non-negotiables
The power of knowledge
Preliminary strategies
Shifting attention
1. Non-negotiables
“To become unstoppable, we need to begin with ourselves,” said Tamer. While being adaptable is essential, you also need to take time to define your own non-negotiables or standards that ensure you maintain your professional integrity.
To achieve this, Tamer recommends asking yourself a series of questions. Imagine a few scenarios and determine your comfort level with each one. For example, “Is it okay if a manager overrules the roadmap?” or “Is it okay if a development team is not willing to provide a delivery date estimate?”
But the big question is: How do we actually find our non-negotiables?
Tamer looks at this as a tension between asking why we need some of these things and what happens if we don’t have them.
What if we continue with this daily hustle of being busy all the time without having time to do the real product work? What if your manager starts to overrule the roadmap? What are the consequences of that?
“In the end, it’s important to set your standards because otherwise you’re going to default to amateurism,” said Tamer.
2. The power of knowledge
The second element that can help you become unstoppable is the power of knowledge. Tamer defined this as the power we can gain and the strengths we need to make decisions, influence people, and most importantly, to build up our credibility.
Typically when we’re talking about research, we’re thinking about user research or customer research, but Tamer said it’s important to extend our fields of expertise.
This means understanding not only the demand side (the customer, user, competitors, market, etc.), but also the supply side (how our business works in terms of business model, operations, commercialization, etc.).
While broadening your knowledge, Tamer calls out the importance of validity (the number of times a given signal pops up in different domains) and coherence (the strength of the connection between these different domains). “If the connection is strong, there’s a very high probability that if we solve that problem, we’re going to drive business value and we’re going to drive customer value,” said Tamer.
He highlighted the fact that you don’t necessarily need to go deep in every field. You’ll be surprised with the knowledge you can gain from a few hours of desk research, five to ten user interviews, two hours of competitor analysis, or a few interviews with stakeholders.
“I make it my daily business to understand and get new insights to make progress,” said Tamer.
3. Preliminary strategies
While some people may argue that it’s not the remit of individual product managers to create strategy, the truth is that many of us are operating in those less-than-ideal environments where strategy is not well defined or communicated.
If you find yourself in that situation, here’s Tamer’s advice on how to come up with a preliminary strategy.
Step 1: Do research to understand the status quo
Step 2: Make sure you understand the company objectives
Step 3: Derive your product objectives from the company objectives
Step 4: Sketch out a set of coherent actions*
Step 5: Package it all up in a story
*Tamer credits Richard Rumelt’s Good Strategy, Bad Strategy for this concept
Once you have all of this, you can go to your manager and tell them this is what you want to do, how you think you can make them successful by your influence on the product, and your impact on the goals. You can say, “I’m going to follow this path unless you give me something better.”
4. Shifting attention
Now that you’ve done all this work to define what matters to you, what matters to your organization, and how your strategy will help you deliver on meaningful goals, the final challenge is to stay focused.
Tamer shared a page from a 1944 CIA document called “The Simple Sabotage Field Manual,” which included tips such as “making speeches” and “bringing up irrelevant issues as frequently as possible.”
To be clear, Tamer is not advocating sabotaging your company, but he did say that you can apply these concepts in a good way. You can explain your standards and the situations when you’re unwilling to compromise. You can ask questions. You can tell your strategic story every chance you get.
Taking this approach will help you gain momentum. And as Tamer closed, he reminded us, “Nothing can stop a moving train.”
Flavia Neves: No One-Size-Fits-All: Successful Product Delivery in Practice
Imagine a poker game: You’re dealt a hand. It’s a unique combination of cards. You have no control over that. The rules of the game are the same for everybody.
But the outcome depends on your skill and your ability to adapt.
It’s all about how we play the game.
And, according to Flavia Neves, it’s the same for the “game” of product development. The product operating model represents the set of rules and cards we’re given to play. And our success lies in our ability to play the game and leverage the cards we’ve been dealt.
“For me, it’s not about finding or trying to create a perfect model where everything works like in the books,” said Flavia. “It’s about learning to play the hands that we’re dealt very well, regardless of the situation that we’re in.”
To make this analogy more practical, Flavia described the operating model at two very different companies where she’s worked: Spotify and Wallapop.
Spotify’s operating model: the chess game
Flavia explained that at Spotify, the operating model is like a chess game: “Every move is planned. Every initiative is deeply analyzed and aligned with the overall objectives of the company and the strategy. You spend a great deal of time connecting the dots, making sure that you’re sequencing every single move that you’re going to make. You’re ready, and the game starts. And then everything flows naturally. You put something in the system and it comes out perfectly… Except for when something goes wrong.”
Because you have everything planned, you figure out every step you’re going to take and every play. This means when you encounter something unexpected, you panic because you have very little wiggle room and you’re not prepared.
In the Spotify operating model, you have to be really sharp upfront. You have to understand exactly what you’re working with. You have to sequence every step. Once the game starts, you don’t want to be thrown a curveball, so you have to be prepared ahead of time.
Wallapop’s operating model: The poker game
At Wallapop, the operating model is more like a poker game. You have to think on your feet, adapt, and pivot. Flavia said, “You start with maybe the first couple of plays locked in, you have your overall strategy, but as the game evolves, you’re adding new cards to your game and you’re tweaking your next move based on what’s happening around you. So there’s a lot more flexibility. But that means that you have to be prepared for anything, because you don’t have your moves all sequenced.”
Comparing the two operating models, Flavia explained that at Spotify, you spend a lot more time planning the game. Your upfront investment is what gives you a more predictable path and a less bumpy journey. At Wallapop, that initial investment is much lower, but the journey gets trickier because you don’t have anything planned out.
“These operating models are very different, but in both cases, the objective is the same,” said Flavia. “We want to win the game.”
The personal operating model
At this stage, you may be wondering how you can ensure you have the right strategy for the game you’re playing.
Flavia said that she’s found it much more effective to develop a personal operating model rather than trying to control the operating model at her current company.
Here are the steps Flavia recommends going through:
Step 1: Why
Identify whether the problem is worth your time. Make sure that you are prioritizing the right things and spending time on things that will bring the most value to your company.
Step 2: Can you back it up?
Look at the facts and evidence. Are your assumptions clear and reasonable?
Step 3: Master of your own world
Consider the impact and constraints that you’re working with. What is this decision going to affect and what affects it in return?
Step 4: Does it belong?
This step is related to the strategy: How does this fit into the overall picture in this company? Will it open up new opportunities? Will it compound new ones?
These pieces of the puzzle can help you get a good understanding if you should work on something and if the time is right. But then you have to solve the actual problem.
In Flavia’s case, she finds it useful to build a virtual neural network that maps the problem with all its dimensions and how they are connected.
Flavia puts the problem in the center of this equation and starts connecting it to several other elements:
What are the key factors of this problem?
What do you know about the strategy and how does it relate to the existing strategy?
Is this aligned with what you’re tackling right now and what you envision in the coming months?
What is the ultimate goal that you want to deliver?
Given the levers and constraints, what are the blockers?
By answering all these questions, Flavia said, “I know where I am, where I need to go, and what are the steps I need to take to get there. Suddenly the way forward becomes rather obvious because the mental map serves as GPS for my product decisions. Now I need to chart the path forward.”
And the good thing about this personal operating model is you can apply it anywhere. Your company stage or industry will influence it, but they won’t change the process you go through to identify and solve your problem.
A few tips for developing your personal operating model
The key to identifying a personal operating model is that it should be personal. It’s not just about copying a framework that someone else has shared. However, Flavia shared a few guidelines on how you can go about developing your personal operating model.
Identify the building blocks
Find the key elements that work for you, what resonates with you, what kind of arguments make you more motivated and confident about your solution.
Design your mental model and incorporate your preferences
Design your model, considering what works for you.
Develop the muscle
You can do this by talking to stakeholders and peers—especially people that have a very different role from yours. This will force you to think about components and angles you hadn’t thought about before. The more you do this, the more it becomes second nature. Then your experience transforms into instinct and the whole process becomes a lot more streamlined and easy.
Bringing it all together
“Product management is all about making decisions,” said Flavia. “We’re faced with endless decisions on a daily basis. The best thing I’ve found to succeed is honing my decision making skills and my problem solving skills, so I have been trying to cultivate this very flexible mindset that allows me to navigate any situation.”
The product operating model sets the tempo and rhythm that you have to live by in your company, so you should choose one that resonates with you. However, your success depends very little on that and more on how you solve the problems.
With a personal operating model, you’ll be unstoppable because you can move into any system and still be able to adapt to the rules of the game.
Gopika M.: Turning Point: How to Build Structures for 180-Degree Pivots
Gopika M. began her talk by introducing the concept of black swan events, a term coined by Nassim Taleb to describe events that are unpredictable, improbable, and have a massive impact on our lives and work: think things like the pandemic, geo-political conflict, or economic crises.
And despite the supposed “infrequency” of black swan events, we’ve seen them happening much more frequently in recent years.
So instead of ignoring them or waiting until we get hit by one, Gopika urged us to account for them and incorporate them into our product operating model.
Revisiting the 4D model
According to the 4D model, product development can be broken into four distinct phases: discover, define, develop, and deliver. The first two stages, discover and define, are related to problem definition. And the second two stages, develop and deliver, are related to building and releasing the solution.
And while Gopika said this is her preferred framework, she also highlighted a major flaw: It doesn’t account for black swan events, specifically in terms of technological, regulatory, environmental, or customer changes.
During the rest her talk, Gopika showed us how we can add a new layer to this framework to build resilience and defense into it.
Phase 1: Adding defense when we discover
Currently what teams do in this stage is look at competitors, existing customer behavior, and what users are telling them. But this approach doesn’t help us understand how our product can remain resilient to changes and trends that may make it obsolete or redundant.
“In order to build a layer of resilience in the discovery process, we need to extrapolate,” said Gopika. “We need to take the known data and use it to make an educated guess about something outside of our data range.”
Gopika recommended looking at trends relating to:
Regulatory changes
Technological advancements
Environmental trends
Changes in customer expectations
For example, in the realm of regulatory changes, product managers focusing on the user experience in Europe should be aware of the European accessibility act and the potential impact it may have on their product.
Remember: It’s important to look beyond our immediate product, our immediate company, and sometimes even beyond the country that we’re in.
Phase 2: Adding defense when we define
Over the last year, we’ve noticed that growth alone or engagement alone doesn’t help a business survive. As product people, we’re now moving to an era where profitability is the key to a product’s survival.
“In order to make the definition process more reliable, resilient, and defensive, you need to add in the lens of a path to profitability,” said Gopika.
She recommended running analyses to see which customers are most profitable to help inform your product strategy.
Stage 3: Adding defense when we (prioritize and) deliver
Typically in the prioritization, design, and delivery stages, teams rely on scoring or voting-based approaches, like the RICE framework. But these don’t cut it anymore, said Gopika. These frameworks don’t help you anticipate and handle rare, high-impact events.
“In this stage, we need to put a mechanism in place that makes room for unpredictable risk and we need to have a way to prioritize this type of work,” said Gopika.
You might recall a few instances when medtech or fintech companies have come under scrutiny for data breaches. For these companies, their core value proposition is to build trust with their users and handle their most sensitive data with the utmost security. When they fail to do so, they’re failing at their value proposition.
“Risk management doesn’t just mean preparing better for risk, it’s also a way to achieve company strategy. If I were one of these companies, I would definitely put eliminating data storage vulnerabilities in my roadmap,” said Gopika.
How do you know what the risks are with your product? Gopika recommends going to your architects and your technical counterparts. These are the people who are most familiar with the tech stack, so they can tell you the bugs and issues that have the potential to come out of your product. “Great technical leaders actually help teams translate risk work to the product to the outcomes affecting the business,” said Gopika. “They can tell you risk A has the potential to disrupt X way financially, Y way operationally, or Z way regulatorily.”
When it comes to prioritizing this type of risk, one of the simplest ways is by setting a threshold.
You can identify the various types of risks associated with a product, then determine whether it’s financial, regulatory, or operational. A lot of teams immediately prioritize financial or regulatory and set a threshold for operational.
As a team, you determine whether this risk is worth prioritizing now based on the identified threshold. The threshold helps you understand if this is a risk worth dealing with right now, next, or never.
Adding another phase: the post-mortem
After a quick run-through of the discover, define, and deliver phases, Gopika said that many teams come together to talk about what happened in an activity known as a “post-mortem.”
However, the problem with the post-mortem is that it’s not proactive. It’s very reactive.
“One way to stay flexible is to have an understanding of what could go wrong and put it in your roadmap before it actually happens,” said Gopika. This is why she recommended moving this activity earlier in the process, before you actually deliver your solution. In this case, your post-mortem becomes a pre-mortem.
A pre-mortem is imagining a future as if it’s already happened and then looking back on it. Scientific research has shown that this approach leads to more accurate prediction of outcomes.
Running a pre-mortem involves sitting with your stakeholders or your immediate team and imagining that the product has been delivered and it has failed. Each one of you is tasked with understanding why.
If you’d like a framework to help you through this process, Gopika likes the one from Notion, which prompts you to list out the reasons, look at the impact of the risk happening, the likelihood of it happening, and the reversibility (of how easy it is to go back to status quo after the event).
No matter how you do it, the pre-mortem allows you to fix these risks before the product has been launched to avoid a massive product failure.
To close out, Gopika reminded us that there’s no 100% foolproof way to avoid uncertainty. “If the winds are changing, a smart sailor will adjust their sails,” she said. “Be that smart sailor.”
At the end of the themed session, moderator Shaun Russell invited the speakers back on stage for a quick round of Q&A.
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