Why Product Teams Can’t Work in All Companies

To have true product teams requires a new leadership and organisational paradigm not seen in most companies.

@oligibson

Last week, I tweeted this in response to Marty Cagan’s recent article on Product vs Feature teams. My comment seemed to resonate with some people, but it’s very generic, so let’s explore this topic in more detail!

What are Organisational Paradigms?

An organisational paradigm is a stage of development determined by the perspective, point of view, or world-view of an organisation. This perspective dramatically affects the way of working within the company. 

In his work on organisational development, Frederic Laloux defined five paradigms, red, amber, orange, green and teal, that describe the major stages of organisation development. For the sake of simplicity in this article, I’ll focus on just three of them:

Amber:  At this stage, organisations strive for stability. They have clear roles and ranks within a hierarchical structure. Leadership is command and control with stability and order enforced through rules and processes. Innovation is not encouraged, and competition is viewed with suspicion.

Orange: At this stage, organisations see the world as a complex machine whose inner workings can be investigated and understood. Leadership changes from command-and-control to management by objective generally focused on competition, innovation and performance.

Green:  At this stage, organisations strive for harmony, tolerance and equality. They usually keep a hierarchical structure but focus on empowerment to lift motivation and to create great workplaces.

Many governments and large organisations today operate from either the amber or orange paradigm, and this has a significant impact on their ability to manage product teams.

Why do Product Teams Require a Different Paradigm?

Empowered product teams are cross-functional; measured by outcomes, and empowered to find the best way to achieve the results they have been asked to achieve. These teams must be allowed to make decisions and take responsibility for them, yet in many organisations, product teams are not empowered to do this. 

The reason these teams lack empowerment is ultimately down to the paradigm the entire organisation operates within. I believe it’s impossible to have genuinely empowered product teams within organisations that work at either the Amber or Orange paradigm because the leadership model is based on principles that contradict the trust, autonomy and collective responsibility required to enable teams.  

How Can Organisations Shift Paradigm?

Consciously or unconsciously, leaders put in place organisational structures, practices, and cultures that make sense to them and their way of dealing with the world. As far as we know, there aren’t yet any organisations that have evolved beyond their leader’s stage of development. A switch in paradigm requires leaders to either pull the organisation toward their stage of consciousness or push it back to a previous paradigm.

To demonstrate how leadership can shift the organisational paradigm lets look at an example from Reinventing Organisations. 

Let’s say I am a Product Manager who naturally operates hierarchically, telling team members exactly what to do and how they need to do it. Now imagine a new leader arrives who urges me to empower the employees that work for me. Around me, I see other product managers giving their teams decision making power. Then at my quarterly review, I receive feedback from my team telling me how well I’m doing on empowerment and how much they enjoy working in this way. 

Within a dominant context of culture and practices, my management skills and behaviours will likely shift. The environment has pulled me up, and perhaps, over time, I will genuinely integrate into that paradigm.


To have genuinely empowered product teams, I believe you need organisational leaders that operate from a paradigm that encourages autonomy, self-management, collective ownership and, above all, trust. 

In many ways, having leaders that could create an environment suitable for product teams is actually about creating a product organisation. Undoubtedly, this is a much more significant undertaking than relabelling delivery teams as product teams, but ultimately, it is essential if you want to gain the value that comes with a genuine organisational paradigm shift.