by Gary Worthington, More Than Monkeys

In the last article we broke down the anatomy of a Product Operating Model. On paper it looks neat - long-lived teams, continuous discovery, product funding, clear metrics, supportive leadership. In practice the transition is messy. Many organisations start with good intent but stall somewhere along the way.

Let’s look at the common challenges that derail the shift.

1. Defining products around systems instead of value

A frequent mistake is to define “products” as existing IT systems. You end up with a CRM product, an ERP product, and a payments gateway product. The result is technology silos with new labels. Customers don’t care about your CRM; they care about getting their invoice paid or their order delivered. A better starting point is to frame products around value streams or customer journeys, using the language of outcomes rather than platforms.

2. Legacy funding and governance

CFOs are used to project-based capital allocation. Finance committees like to approve a start and end date, a lump sum, and a business case. A product model doesn’t fit that template. Funding is ongoing, and outcomes may not be measurable in the first quarter. It often helps to start small with pilot products and show how continuous funding creates flexibility and reduces waste compared to the stop–start cycle of projects. Gary Gruver’s work in Leading the Transformation gives simple examples of this in action.

3. Weak product management capability

You cannot run a product model without product managers who understand both discovery and delivery. Many organisations underestimate this. They either promote project managers into product roles or expect business analysts to fill the gap. The result is underpowered product teams that revert to stakeholder order-taking. The organisations that succeed are the ones that invest early in product management capability. As Marty Cagan argues in INSPIRED, without empowered product managers you don’t have product teams at all, you just have feature factories.

4. Lack of empowerment

Even with product managers in place, teams often lack real authority. Decisions are still made in steering committees. Teams are measured on output. Delivery dates are set centrally. Calling a team “product” does not make it empowered. The difference comes when teams are accountable for outcomes, not just deliverables. Replace feature roadmaps with outcome goals and give teams room to decide how best to achieve them, within clear strategic guardrails.

5. Cultural resistance

Shifting to a product model means leaders must give up a level of control. That is hard. It also means teams must get comfortable with discovery, experimentation, and sometimes failure. In cultures built on certainty and hierarchy this can feel threatening. Leaders need to model the behaviour themselves. Amy Edmondson’s The Fearless Organization explains why psychological safety is essential. If teams fear punishment for failed experiments, discovery won’t happen.

6. Dependencies and organisational design

Even the best-intentioned product teams will grind to a halt if every change requires five other teams to cooperate. Dependencies kill flow. Revisiting team boundaries and interaction modes is usually the answer. Matt Skelton and Manuel Pais in Team Topologies offer practical guidance on designing for fast flow. The aim isn’t to eliminate dependencies entirely but to make them intentional and manageable.

7. Copy-pasting enterprise models into SMEs

Smaller companies are often told they need tribes, chapters, and portfolio boards because Spotify or ING does it. That’s overkill. SMEs end up with more process than product. The reality is that an SME might only need three product lines, reviewed once a month. Scale the model to fit your size instead of importing ceremonies you don’t need.

Putting it together

The challenges are real but none are insurmountable. The shift is less about adopting a framework and more about unpicking habits that no longer serve you. The organisations that succeed start small, invest in people, and tackle the financial and cultural blockers head-on.

Next in the series

In the next article we’ll look at how SMEs in particular can implement a Product Operating Model without drowning in process, and why they are often better placed than enterprises to make it work.