Setting Boundaries

What organizational design is in place to help a product leader understand the boundaries of their decision authority? Start with questions like:

• What are the boundaries between this product and specific businesses?
• What is the relationship of this product to any strategic investment portfolios (driving changes in business capabilities)?
• What is the relationship of this specific product to any product lines, or solution offers?

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Identify Context

We will begin by describing a context, dedicated to the product, covering decision making authority across the whole of the product offer. The first context-to-context relationship we’ll cover is the parent-child relationship.

The Parent Context for this product context is a business context, where the product offer is a material part of the business. [Note: In some settings, the business and product leadership and decision authority could be combined into a single context.] This product context is sponsored (and funded) by the parent to develop and deliver the product. The product context works with the business context to refine the Journey/Job Map that describes how they serve customers and the market. The parent’s business strategy is visible through the Parent Goals and specific Parent Results, with “where-to-play” and “how-to-win” choices emerge to support a “winning aspiration”. The business strategy sufficiently details these choices  such that the individual products (like this context) can refine their own “where to play” and “how to win”, within their product context, if desired.

Define Context Scope

The Mission of a product is to deliver value to customers by solving for customer needs or problems. Use the discussion of mission to establish the value that is offered to others outside the context (e.g. business, support, or sales channel contexts). This can be expressed as a service catalog, if desired, to help these other contexts understand how to consume the value created from this context.

Its Responsibilities include:

1. Product Strategy - collaborating with stakeholders to identify product opportunities and vision and define and drive the strategy
2. Product Planning and Roadmapping - prioritizing product features and enhancements to set timelines for development that can drive resource allocation
3. Market and Customer Research - gathering customer insights to understand user needs, pain points, and preferences
4. Cross-Functional Collaboration - working closely with other teams across the organization like marketing, design, engineering, and sales, throughout the product lifecycle
5. Product Performance and Iteration - monitor performance and gather feedback from customers and stakeholders, to optimize product value and user experience

Assets owned and maintained by a product context include the components of the product itself, product support materials, and the development and operations infrastructure.

The leader(s) of a product context has the complete Decision Authority to decide:

• What to build and deliver
• How to build and deliver

Decision Rights

Leaders delegate decision making by creating boundaries of authority. Decision rights enables the speed and effectiveness of decentralized decision making.

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Define Context Behaviors

From an organization's perspective, the product context provides a set of Capabilities related to building, delivering, and activating value. Performance and success for the context are governed by KPIs that show how effectively the capabilities are executing, for example:

• Activation metrics (Time to Value, Onboarding Completion Rate, User Activation Rate, etc.)
• Engagement metrics (Monthly Active Users, User Satisfaction, Session Length, etc.)
• Retention metrics (Churn Rate, User Retention Rate, Customer Lifetime, etc.)

Product leaders oversee a Workflow that produces outputs:

1. Discover needs
2. Build plans
3. Change product
4. Deliver product changes
5. Assess impact

Depending on the nature of the product, a workflow often Needs Value from other Peer Contexts, for example, to support the interactions with customers.

Product leaders sponsor and facilitate some key Rituals to help communication and alignment across their stakeholders, supporting cross-functional collaboration:

• Quarterly Planning
• Monthly Goal Review
• One-on-ones (between context leader and related child and parent context leaders)

When the product context consumes value from other functional contexts that support steps in their workflow (e.g. when it Needs Value from a market research functional context), they are indirectly paying for this service. To make this more direct, they could pay a monthly Rate for this service, to make it explicit that they are an internal customer (as well as a consumer). These rates could be initially set to be proportional to the run rate (or costs incurred) by the peer context itself (i.e. staffing).

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