3. Different Ways to Organize a Product Team

Organizing a product team can vary significantly depending on the company’s strategy, product complexity, and goals. There is no one-size-fits-all approach, and the organization of product teams often evolves over time to better meet the needs of the business and its customers. In this document, we will explore several common ways to structure product teams, highlighting the benefits and drawbacks of each approach.

1. Product or Feature-Oriented Teams

Overview

In this structure, teams are organized around a specific product or a set of features within a product. Each squad is responsible for the success and development of the product or feature they are assigned.

Benefits

• Clear Focus: The team’s responsibilities are well-defined, with a clear understanding of the product or features they are improving or maintaining.
• Direct Measurement: Success can be easily measured by the performance of the product or features the team is responsible for.

Drawbacks

• Narrow Perspective: Teams might lose sight of the overall user experience or the broader business goals if they focus too narrowly on their product or feature.
• Potential Silos: This structure can create silos where teams work independently, leading to a lack of collaboration across different products or features.

Best Use Case

This structure is often used in companies with well-established products or in internal product teams focused on delivering specific functionalities.

2. Objective-Oriented Teams

Overview

Objective-oriented teams are structured around measurable goals or key performance indicators (KPIs). The focus is on achieving specific outcomes rather than on maintaining a particular product or feature.

Benefits

• Flexibility: Teams have the autonomy to experiment and explore different approaches to meet their objectives.
• Alignment with Business Goals: This structure encourages teams to think broadly about how their work impacts the company’s overall objectives.

Drawbacks

• Overlap and Conflicts: Multiple teams might work towards the same objective, leading to potential conflicts, overlap in efforts, and challenges in aligning strategies.
• Complex Coordination: There may be challenges in coordinating efforts across teams, especially if they are working on interconnected systems or architecture.

Best Use Case

This structure works well in dynamic environments where the company needs to rapidly adjust to changing market conditions and where innovation is a key driver.

3. User-Type-Oriented Teams

Overview

Teams are organized based on the type of user they serve. For example, one team might focus on individual consumers, while another focuses on enterprise clients.

Benefits

• User-Centric Development: The team can develop a deep understanding of the specific needs and pain points of the user type they serve, leading to more tailored solutions.
• Clear Focus on User Experience: By focusing on a particular user group, teams can optimize the experience for that specific audience.

Drawbacks

• Dependency on Other Teams: If the system architecture requires changes across multiple teams, it can slow down the development process.
• Potential for Misalignment: Different teams focusing on different user types might create inconsistent experiences or misaligned objectives across the company.

Best Use Case

This structure is beneficial for companies that serve distinct user segments with different needs and requirements, ensuring each segment receives dedicated attention.

4. User-Journey-Oriented Teams

Overview

Teams are organized around the entire user journey, from initial interaction to the final outcome. This structure aims to optimize the user’s experience throughout their interaction with the product.

Benefits

• Holistic User Experience: Teams can ensure a seamless experience across all stages of the user journey, enhancing overall satisfaction.
• End-to-End Responsibility: Teams have ownership of the entire journey, allowing them to make decisions that improve the entire process.

Drawbacks

• Complex Implementation: Optimizing the entire user journey often requires collaboration across multiple teams, leading to potential delays and complexity.
• Risk of Narrow Focus: Focusing too much on one part of the journey can lead to neglecting other important aspects, creating a lopsided user experience.

Best Use Case

This structure is ideal for companies that prioritize the user experience and want to ensure consistency and quality across all touchpoints in the user journey.

5. Value Stream-Oriented Teams

Overview

Value stream-oriented teams are structured around delivering specific value to the end customer through a particular channel or method. This approach focuses on aligning teams with the overall value delivery process.

Benefits

• Customer-Centric: Teams are aligned with delivering tangible value to customers, ensuring that all efforts are directed towards improving customer satisfaction.
• Streamlined Processes: By focusing on value streams, teams can optimize the entire process, from development to delivery.

Drawbacks

• Complex Coordination: Ensuring alignment between different value streams and with supporting functions like operations can be challenging.
• Potential Inflexibility: If not managed well, this structure can become rigid, making it difficult to adapt to new opportunities or changes in the market.

Best Use Case

This structure is effective in large organizations with multiple products or services, where aligning teams with value streams can help optimize overall performance.

Example: O Boticário’s Organizational Structure

O Boticário, a complex organization with multiple brands and consumer segments, has adopted a value stream-based approach to organize its product teams. Their structure includes:

• Value Streams: Focused on delivering value to specific consumer segments or through specific distribution channels.
• Chapters: Cross-functional groups that support the value streams, such as finance or operations, ensuring that all aspects of the business are aligned.

The company’s approach highlights the importance of maintaining synergy between different parts of the organization to deliver a consistent experience to the customer. Communication and alignment between value streams and supporting functions are crucial to their success.

Conclusion

Choosing the right way to organize product teams depends on various factors, including the company’s goals, product complexity, and user needs. While each structure has its benefits and drawbacks, the key to success lies in ensuring alignment across teams, clear communication, and a focus on delivering value to the end user. As organizations grow and evolve, it may be necessary to revisit and adjust team structures to meet new challenges and opportunities.