The Agile Product Operating Model
The Agile Product Operating Model is a set of ideas that bridge modern product management and agile approaches to provide organizations with a foundation for delivering value. It is based on the product mindset and aligns the organization around products.
Moving from a Project Mindset to a Product Mindset
Projects break down work into a series of milestones, and teams focus on delivering against those milestones. Projects are successful when teams deliver against the plan, and status is measured against progress toward milestones.
Focusing on a project mindset without considering the product undermines your ability to deliver value.
Projects themselves are not bad, but the mindset can be restrictive, reducing the team’s ability to be flexible and focus on value. A product mindset creates this clarity and focus on value.
Defining a Product
Products are a mechanism by which organizations invest, manage and deliver value. They are vehicles that deliver value with a clear boundary. The product ideally has known stakeholders, well-defined users, customers who pay for it and people who use it. A product could be a service that an organization provides, a physical product or something more abstract. Ultimately, this leads to aligning around the customer and the outcomes. It also provides organizations with a clear understanding of cost, investment and value.
This doesn't mean that there aren't projects. For example, you may have a project that spans multiple products, like a privacy rule, such as GDPR. Ultimately, product leadership would balance the needs of these cross-product projects with the needs of the product. This could impact the Product Backlog in the context of other value decisions that teams are making for that product, and essentially, the GDPR compliance team becomes another set of stakeholders.
The first step in adopting an Agile Product Operating Model is defining the products it supports. Ultimately, it is reviewing the services the organization provides and grouping those services into products. Those services may be external or internal. Of course, you may get it partially correct on the first go, which is okay. The most important idea is to treat it as an inspection and adaptation opportunity by making things transparent, putting clear boundaries, and creating clear ownership for decision-making.
The Agile Product Operating Model
The idea of an operating model is nothing new; it is a holistic description of how a company realizes and operates its strategy. It describes an organization’s collection of elements to deliver value. An Agile Product Operating Model is, as the name implies, an operating model for each product that supports an agile mindset. So, ultimately, it is the alignment of an organization around a product(s). Each product has its own operating model that has the ability to respond and change based on experience and learning.
An Agile Product Operating Model brings together various bodies of knowledge, Professional Scrum, product thinking and modern product management practices to create an organization that can respond to change and deliver valuable products to customers.
Each product requires:
- Business Roadmap - A clear business roadmap that connects the product to a broader business strategy
- Technology Roadmap - How the technology will evolve in support of the business is described
- Operational Stability - Service levels are described to ensure transparency and clarity
- Governance and Flow - How change is managed and controlled
- Total Cost of Value - The economics of the product comparing value and cost
The Agile Product Operating Model includes:
- People and Organization – The people’s responsibilities, titles and how are they organized
- Measures and Incentives – The key performance indicators and how performance and success are measured and communicated
- Agile Processes – How the people work together and the information required to deliver value
- Governance – Who makes decisions, and what oversight and controls are in place?
- Culture and Behavior – The values, beliefs, attitudes and rules that influence behavior
Each element reinforces the others. For example, the process requires people to be organized in a certain way, governance affects culture, and tools and technology support everything. Agile and product thinking (embracing a product mindset) provides a series of constraints that unify these elements into a consistent operating model. It is crucial that organizations consider all of these elements.
Evidence-Based Approach
To drive change, you need visibility. By making things transparent and available, the people involved in the work can make better decisions, while leaders can support and influence those decisions. Without transparency, you build silos and end up creating walls between work, causing disconnects, duplication of efforts and reduction in communication.
Of course, information without details can be disruptive and drive incorrect interpretations or decisions, so there needs to be a balance. Make the right information available openly to help in decision-making and build trust while having ongoing communications to further encourage sharing and open knowledge.
By adding measures based on evidence, you can remove emotion from these decisions. Evidence-Based Management (EBM) is a framework that helps people, teams and organizations make better-informed decisions to help them achieve their goals using intentional experimentation and feedback. By making the measures and results available, teams can better manage, measure and increase the value they derive from their product delivery. EBM focuses on improving outcomes, measuring value, reducing risks and optimizing investments.
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