by Gary Worthington, More Than Monkeys

In the first two parts of this series I explained what a Product Operating Model is and why so many organisations are moving in that direction. Now it’s time to look at the anatomy of the model itself. What are the core elements that make it work in practice?

The Product Operating Model isn’t a rigid framework. Think of it as a set of interlocking parts. You can assemble them differently depending on your size, industry, and culture, but the fundamentals are always the same.

1. Product portfolio and strategy

The first step is deciding what counts as a product. Many organisations fall into the trap of defining products in terms of internal systems or departments. That leads to IT “owning” a CRM or Finance “owning” an invoicing system, which might make sense internally but has nothing to do with how customers experience value.

A product should be defined around the customer problem it solves or the business outcome it enables. This echoes Richard Rumelt’s point in Good Strategy / Bad Strategy that clarity of focus is what makes strategy powerful. Translating that into a product model means being explicit about which products matter and why.

2. Long-lived product teams

Products need teams that stick with them. Short-lived project teams never build enough context to make good decisions. They’re gone just as they start to understand the domain.

Long-lived teams accumulate expertise, own the outcomes, and develop a sense of mission. Marty Cagan in INSPIRED argues that empowered, outcome-focused teams are the only way to consistently build products customers love. Without this continuity, everything else in the model quickly unravels.

3. Funding model

Traditional budgets are tied to projects: a lump sum approved for delivery, with a hard stop at the end. This creates perverse incentives. Teams race to spend their budget before year end, deliver something that ticks the box, and then vanish.

In a product model, funding is ongoing. Money is allocated to products or product lines, not projects. Gary Gruver’s Leading the Transformation highlights how this approach creates faster feedback loops and reduces waste compared to stop–start project funding.

4. Discovery and delivery practices

A genuine product model requires discovery to be continuous. Teams must spend time validating assumptions before committing serious resources. That means talking to customers, running prototypes, and experimenting with ideas.

Teresa Torres in Continuous Discovery Habits makes the case that discovery is not a phase, it’s a habit. Delivery then focuses on validated opportunities, not wish lists from stakeholders. The balance matters: if you only discover, you never ship; if you only deliver, you build the wrong things.

5. Metrics and feedback loops

Outputs are easy to measure: number of features shipped, velocity, on-time delivery. None of them guarantee value. A product model replaces these with outcomes. Did retention go up? Did conversion rates improve? Did support calls go down?

The Accelerate research by Nicole Forsgren, Jez Humble, and Gene Kim shows that teams who measure and act on outcomes, backed by fast feedback loops, consistently outperform those who fixate on activity metrics.

6. Leadership and culture

Leaders make or break the shift. In a project model, leadership often means directing from above, approving budgets, and signing off on scope. In a product model, leaders need to set intent and then step back. Their role is to remove obstacles, align incentives, and ensure teams have the skills and space to succeed.

Amy Edmondson’s The Fearless Organization reinforces why psychological safety is a prerequisite. If teams are afraid of failure, discovery dries up and the model collapses back into project thinking.

7. Supporting teams

Even the best product team will fail if they’re drowning in dependencies. If every feature requires weeks of wrangling with infrastructure or compliance, speed disappears.

Matt Skelton and Manuel Pais in Team Topologies explain how platform and enabling teams reduce cognitive load by providing shared services and expertise. Done well, this frees product teams to focus on solving customer problems instead of reinventing the plumbing.

Putting it all together

These seven elements form the anatomy of a Product Operating Model. Portfolio and strategy set the focus. Long-lived teams and funding provide the engine. Discovery, delivery, and metrics keep value flowing. Leadership and culture provide the guardrails. Supporting teams make sure the whole thing is sustainable.

Ignore any of these parts and the model starts to wobble. Get them working together and you create an organisation built for adaptability, speed, and customer focus.

Next in the series

In the next article we’ll look at the common challenges organisations face when making this shift, and why so many transformations stall.