Pivoting to a product-based operating model: mobilising your first value stream

In today’s dynamic world, adaptability is key to survival. Traditional, rigid structures are giving way to more fluid, product-centric operating models that emphasise value delivery and customer satisfaction.

In a recent point of view, we highlighted that organisations that have pivoted to a product-centric operating model are outperforming their peers by 4x.

The benefits of adopting this model are clear, from eliminating bottlenecks and accelerating delivery cycles to empowering teams to take ownership of product delivery from ideation to deployment, ensuring that every decision and action is driven by the desire to maximise value for the end user.

So, how can you get started on this transformative journey?

Central to pivoting to product is moving away from organising by functional silos to organising teams around products or services in value streams, i.e. cross-functional groups of teams necessary to deliver end-to-end value to the customer. Note that if teams get larger than 150 people they will need to be sub-grouped by product goal, customer journey or other outcome.

The first step is to select a pilot value stream which represents a significant portion of value delivery to enable you to prove the benefits and earn the right to scale. Securing leadership buy-in is crucial at this stage, setting the tone for the organisation’s commitment to transform. Tailored training and leadership coaching are required to help leaders role model the change.

With leadership on board, it typically takes 6-8 weeks to meet mobilisation entry criteria and work through the initial mobilisation (detailed in steps 1 and 2 below). Value stream leaders are appointed to lead scoping and design, defining the strategic priorities to be delivered over the upcoming quarter, and teams capture their respective goals in support of the overarching priorities.

Quarterly planning (step 3) is a collaborative, cross-functional event which brings every team in the value stream together (as well as individuals and teams outside of it whose support will be required). Through aligning on clear business outcomes and making risks and dependencies transparent, teams can ensure that everyone is moving in the same direction.

The focus for the first quarter (step 4) is on introducing and embedding the new ways of working, with all teams delivering to an aligned cadence. Value stream leadership and team level coaching focuses on driving continuous improvement, and tracking key delivery and flow metrics enables data-driven decision making.

Beyond the first quarter, over the course of 12 months, the focus shifts to scaling the value stream (step 5). This involves iterating on processes, leveraging feedback, and continuously improving ways of working. By scaling incrementally and adapting from lessons learned along the way, organisations can ultimately realise the full potential of their product-based operating model.

Note all timeframes provide rough guidelines and are highly dependent on the specific organisational context.

If you are interested in reading more on the topic of product and product value stream operating models: