Product Operations: How Successful Companies Build Better Products at Scale
Authors: Melissa Perri, Denise Tilles, Melissa Perri, Denise Tilles
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Overview
This book, “Product Operations,” is a guide to building and scaling product operations functions in organizations. It’s targeted primarily at product leaders in scale-up and enterprise companies experiencing growing pains as their product portfolios and teams expand. We introduce the core concept of product operations as a critical function for effectively scaling product management, helping organizations bridge the gap between strategy and execution. We argue that product operations is more than just “process people” – it is a strategic discipline that surrounds product teams with the essential inputs for success. We define product operations as the discipline of helping your product management function scale well by providing the data, processes, and insights needed for effective decision making, building customer-centric products, and streamlining workflows. The book is structured around the Three Pillars of Product Operations: Business Data and Insights, Customer and Market Insights, and Process and Practices. These pillars provide a comprehensive framework for building a successful product operations function. We delve into each pillar, offering practical advice, examples, and case studies illustrating how they apply in various scenarios. Throughout the book, we use the fictional company “Pipeline 3K” to demonstrate the practical application of these concepts. Real-world case studies from companies like athenahealth, Amplitude, Oscar Health, and Fidelity Investments showcase successes, challenges, and lessons learned in implementing product operations. We also provide guidance on introducing product operations into an organization, addressing common objections, building consensus, securing executive buy-in, and building and scaling a team. Recognizing that many product operations teams start small, we dedicate chapters to the “team of one” and scaling strategies. The book concludes with lessons learned, focusing on executive support, cultural considerations, demonstrating impact, and balancing process with agility. We offer actionable tips and a roadmap to guide product leaders through implementing or scaling their own product operations functions. “Product Operations” addresses the growing need for this discipline in today’s rapidly changing market. As organizations strive to scale their product offerings and teams, this book is a timely resource that provides a clear path forward, drawing on real-world examples and practical frameworks.
Book Outline
1. Why Product Operations?
Product Operations is introduced as a vital function for scaling product management effectively. It addresses the common challenges faced by product teams, such as data accessibility, streamlined processes, and consistent strategy. The book emphasizes the importance of bridging the gap between whispers in the community and practical implementation at various organizational levels.
Key concept: Product strategy is a system of achievable goals and visions that work together to align the team around desirable outcomes for both the business and its customers.
2. What is Product Operations?
Product operations helps product management scale by providing the necessary data, processes, and insights to make informed decisions, create customer-centric products, and streamline workflows.
Key concept: Product operations is the discipline of helping your product management function scale well-surrounding the team with all of the essential inputs to set strategy, prioritize, and streamline ways of working.
3. The Three Pillars of Product Operations
This chapter introduces the three core pillars of product operations: Business Data and Insights, Customer and Market Insights, and Process and Practices. Each pillar plays a critical role in enabling effective product management.
Key concept: The three pillars of product operations are Business Data and Insights, Customer and Market Insights, and Process and Practices.
4. Contextualizing Data from a Product Perspective
This chapter focuses on the importance of contextualizing data from a product perspective. By analyzing business data through a product lens, organizations can gain a clearer picture of their product portfolio performance and make more strategic decisions that align with business goals.
Key concept: Any of the metrics that run your business from a revenue and cost standpoint provide important insights.
5. Getting to the Right Strategic Questions
This chapter guides readers on how to identify the right strategic questions, from company vision down to options, using examples from a fictional company, Pipeline 3K. By understanding the questions at different levels, product operations can support informed decision-making and strategic alignment.
Key concept: Once the company vision is set, you’ll want to define the strategic intents.
6. Visualizing the Data
This chapter focuses on how to visualize data effectively to create actionable insights. It covers instrumenting product metrics, conducting a manual baseline, and automating data and insights. Case studies and real-world examples showcase how to implement these practices effectively.
Key concept: Data tells a story.
7. The Research Pillar
This chapter highlights the importance of the research pillar in gathering customer and market insights. It covers diverse sources of customer feedback, including win/loss analysis, reviews, support interactions, and user research. The chapter also emphasizes the importance of market research to understand industry trends, competition, and market sizing.
Key concept: Most of the time, we don’t even realize what a wealth of customer insights we already have in our systems and at our fingertips.
8. Customer Insights
This chapter focuses on customer insights, addressing common challenges in user research. It emphasizes streamlining customer feedback loops and ensuring insights are accessible to the entire product team.
Key concept: In many places, sales and customer success act as gatekeepers to the clients, restricting access to other members of the organization.
9. Streamlining the User Research
This chapter delves into streamlining user research, emphasizing the need for efficient processes and removing roadblocks. It also introduces the concept of democratizing user research by providing access and tools to non-researchers.
Key concept: There are many problems with the way companies do user research these days:
10. Market Research
This chapter focuses on market research as a crucial component in evaluating business opportunities and prioritization. It guides readers through how to estimate the value of expansion opportunities by understanding market size, competition, and customer needs.
Key concept: “How do we prioritize?” is the most frequently asked question we get from product managers and product leaders alike.
11. The Product Operating Model
This chapter defines the product operating model as the framework for scaling product management value. It emphasizes that “process” isn’t about rigid rules, but about streamlined ways of working and continual improvement.
Key concept: “Process” is a loaded word.
12. Creating the Process and Governance of the Product Operating Model
This chapter provides practical guidance on establishing the process and governance of a Product Operating Model. It covers defining roles, responsibilities, processes for product teams, guidelines for cross-functional collaboration, and setting up governance and annual planning processes.
Key concept: Roles and Responsibilities, Process for Product Teams, Guidelines for Working with Other Teams, Governance and Annual Planning
13. Governance and Product Planning
This chapter discusses the role of governance in product planning and execution. It outlines how good governance can enable continuous product planning and provides a framework for effective meetings and cross-functional collaboration.
Key concept: Good governance is at the heart of a successful team.
14. Defining Process for Product Managers
This chapter emphasizes the importance of defining clear processes for product managers. It introduces the idea of “just enough process” - not too much, not too little - to help product managers excel in their day-to-day work and support onboarding and skill development.
Key concept: Just Enough Process
15. Tools of Enablement
This chapter covers the importance of selecting and implementing the right tools to enable product operations. It provides guidance on how to assess current tools, identify gaps, and make strategic decisions about tool procurement, training, and enablement.
Key concept: Tools enhance processes and practices; they don’t replace them.
16. When and Where to Start
This chapter guides readers on when and where to start introducing product operations in their organization. It emphasizes the importance of considering the company’s stage, pain points, and opportunities when determining which pillar of product operations to prioritize.
Key concept: One of the most important considerations is the stage of the company.
17. Getting Buy-In
This chapter helps readers understand how to get buy-in for product operations by clearly stating the pain points, their impact, and the proposed solutions. It offers a template for creating a compelling business case, highlighting potential cost savings and revenue opportunities.
Key concept: State the Pain Points
18. Common Objections: How to Respond
This chapter addresses common objections to implementing product operations and provides counter-arguments. It emphasizes the value of product operations as a force multiplier, enabling product managers to focus on strategic work and data-driven decision-making.
Key concept: Product managers should be able to do their own analytics implementation and analysis.
19. Building Consensus
This chapter discusses building consensus and addressing resistance within the product team. It highlights the importance of clear communication and education to emphasize that product operations enables decision-making, rather than making decisions.
Key concept: Many product leaders assume their team will be 100 percent on board with adding a product operations function.
20. How to Win Them Over
This chapter focuses on strategies to win over stakeholders by tailoring the value proposition to each audience. It provides specific examples of how to communicate the benefits of product operations to UX, User Research, Sales/Marketing, Data Science, Customer Support, and Engineering teams.
Key concept: The key to influence is getting the value proposition right for your audience.
21. How to Get Started
This chapter provides guidance on how to get started building a product operations team, whether starting with a single person or a small team. It emphasizes the need to assess existing resources, identify skill gaps, and prioritize based on company needs.
Key concept: Most product operations functions don’t typically add a team of five to ten right from the start.
22. Team of One
This chapter explores the benefits and challenges of operating as a “team of one” in product operations. It emphasizes the importance of setting clear priorities, focusing on high-impact areas, and demonstrating value quickly to gain support for future growth.
Key concept: Many product operations teams start as a team of one.
23. Team of Several
This chapter discusses building a product operations team of several people and how to structure the team effectively. It emphasizes the importance of aligning roles with skill sets, considering team dynamics, and planning for growth and scaling the function.
Key concept: Maybe you’ve conducted your capabilities analysis and said, “We’re going to need some muscle to solve these problems.”
24. Filling the Roles
This chapter focuses on filling the roles within a product operations team and provides detailed job descriptions for different specializations, including Data and Insights, Governance and Operating Model, and Customer and Market Insights.
Key concept: Data and Insights, Governance and Operating Model, Customer and Market Insights
25. Embedded vs. Shared Service Model
This chapter examines the different organizational models for product operations teams, including embedded, centralized/shared service, and hybrid models. It discusses the pros and cons of each structure to help organizations choose the best fit.
Key concept: Embedded vs. Shared Service Model
26. The Future of Product Operations at Pipeline 3K
This chapter looks at the future of product operations at Pipeline 3K, reviewing progress made, outlining future challenges and opportunities, and discussing potential scaling needs and hiring plans.
Key concept: Business and Data Insights, Customer and Market Insights, Process and Practices
27. The Future of Product Operations
This chapter explores the future of product operations, predicting trends and directions for the field. It anticipates increased automation, better observability, and a continued focus on empowering product managers and product teams.
Key concept: We predict that a focus on information flow will continue to increase as a major accelerator for companies.
28. Secure Executive Support
This chapter emphasizes the importance of securing executive support for product operations. It provides strategies for gaining buy-in from CEOs and other C-suite executives by demonstrating value, highlighting challenges, and securing resources.
Key concept: Lesson learned: “Managing upwards” is the name of the game here.
29. Culture Counts
This chapter highlights that culture counts and a supportive environment is crucial for product operations success. It emphasizes cross-functional collaboration, clear communication, and addressing potential conflicts or misunderstandings between teams.
Key concept: Lesson learned: Product operations will only flourish in a company culture that embraces it.
30. Focus on All Data
This chapter focuses on the importance of leveraging all available data, not just product usage data, to drive impactful insights. It explains how product operations can connect usage data to business data, such as revenue and churn, to make better-informed decisions.
Key concept: Lesson learned: To provide truly impactful and actionable data for your product teams, you need to connect product data and customer insights with business-impacting financials.
31. Get to Impact Quickly
This chapter focuses on making an impact quickly by focusing on quick wins and demonstrating value early on. It emphasizes the importance of prioritization, clear communication, and building momentum for the product operations function.
Key concept: Lesson learned: Don’t try to fix everything all at once.
32. Balance Process with Agility
This chapter emphasizes the need for balance between process and agility in product operations. It explains how to introduce “just enough process” to streamline workflows without stifling innovation or team empowerment.
Key concept: Lesson learned: Systems and processes can be powerful tools, but they can also be roadblocks when not implemented correctly.
33. Activating Product Operations: Four Key Takeaways
This chapter summarizes the four key takeaways of the book: Product operations as a force multiplier, using the three pillars framework, measuring success, and the importance of continuous improvement.
Key concept: Product operations is a force multiplier at organizations of any size.
34. Your Roadmap to Standing Up Product Operations
This chapter provides a roadmap for standing up product operations, with separate paths for companies starting from scratch and those with existing functions. It offers practical guidance and encourages readers to seek support from the product operations community.
Key concept: Your Journey Begins Today
Essential Questions
1. What core problem does product operations solve for scaling organizations?
Product operations aims to streamline the often chaotic and inefficient processes that plague product teams as organizations scale. It addresses common pain points like lack of data access, inconsistent roadmaps, inefficient user research, and poor cross-functional communication. By providing the necessary infrastructure, tools, and processes, product operations frees up product managers to focus on strategic decision making and building valuable products.
2. What are the Three Pillars of Product Operations, and how do they work together?
The Three Pillars framework provides a clear structure for understanding the key functions of product operations: Business Data and Insights, Customer and Market Insights, and Process and Practices. These pillars work together to enable the product team with the necessary data, insights, and processes to effectively set strategy, prioritize initiatives, and streamline work. This structure helps organizations prioritize areas of greatest need and build a tailored product operations function.
3. Who is the target audience for this book, and why?
This book targets product leaders, particularly CPOs and VPs of Product, in scale-up and enterprise companies. These organizations often face challenges related to scaling their product management function as their product portfolios and teams grow. The book also offers value to individual product managers, researchers, and other stakeholders involved in the product development process.
4. How should an organization approach implementing product operations, and what are the key first steps?
The book suggests starting with the pillar that represents the organization’s biggest pain point. This targeted approach allows teams to quickly demonstrate value and secure buy-in for further investment in product operations. The book also provides guidance on gathering data, setting metrics, and instrumenting systems to inform the product operations strategy. Continuous improvement and iteration based on organizational needs are also key.
5. How does product operations contribute to achieving positive business outcomes and driving customer value?
Product operations empowers product teams and leaders to focus on outcomes rather than outputs, by providing essential data, processes, and insights for informed decision-making. It helps to align the organization around customer value, creating more customer-centric products and improving business performance. Product operations acts as a forcing function for continuous improvement by establishing systems for ongoing analysis, experimentation, and feedback loops, enabling companies to adapt quickly to changing market dynamics.
1. What core problem does product operations solve for scaling organizations?
Product operations aims to streamline the often chaotic and inefficient processes that plague product teams as organizations scale. It addresses common pain points like lack of data access, inconsistent roadmaps, inefficient user research, and poor cross-functional communication. By providing the necessary infrastructure, tools, and processes, product operations frees up product managers to focus on strategic decision making and building valuable products.
2. What are the Three Pillars of Product Operations, and how do they work together?
The Three Pillars framework provides a clear structure for understanding the key functions of product operations: Business Data and Insights, Customer and Market Insights, and Process and Practices. These pillars work together to enable the product team with the necessary data, insights, and processes to effectively set strategy, prioritize initiatives, and streamline work. This structure helps organizations prioritize areas of greatest need and build a tailored product operations function.
3. Who is the target audience for this book, and why?
This book targets product leaders, particularly CPOs and VPs of Product, in scale-up and enterprise companies. These organizations often face challenges related to scaling their product management function as their product portfolios and teams grow. The book also offers value to individual product managers, researchers, and other stakeholders involved in the product development process.
4. How should an organization approach implementing product operations, and what are the key first steps?
The book suggests starting with the pillar that represents the organization’s biggest pain point. This targeted approach allows teams to quickly demonstrate value and secure buy-in for further investment in product operations. The book also provides guidance on gathering data, setting metrics, and instrumenting systems to inform the product operations strategy. Continuous improvement and iteration based on organizational needs are also key.
5. How does product operations contribute to achieving positive business outcomes and driving customer value?
Product operations empowers product teams and leaders to focus on outcomes rather than outputs, by providing essential data, processes, and insights for informed decision-making. It helps to align the organization around customer value, creating more customer-centric products and improving business performance. Product operations acts as a forcing function for continuous improvement by establishing systems for ongoing analysis, experimentation, and feedback loops, enabling companies to adapt quickly to changing market dynamics.
Key Takeaways
1. Data-driven decision making is crucial for product success.
Effective data analysis, contextualized through a product lens, is essential for informing product strategy and decision making. Product operations teams help collect, analyze, and synthesize data from various sources, including internal systems, market research, and customer feedback. This enables product teams to understand performance trends, identify opportunities, and measure the impact of their work on business outcomes.
Practical Application:
A startup developing an AI-powered medical diagnosis tool can leverage product operations to streamline data collection from clinical trials, user feedback on prototype versions, and market research on competing solutions. This data can be synthesized into actionable dashboards for the product team to make informed decisions about feature prioritization, regulatory compliance, and go-to-market strategy.
2. Customer insights are the cornerstone of valuable products.
Capturing and leveraging customer and market insights is essential for building products that meet real user needs and solve market problems. Product operations streamlines user research processes, democratizes access to insights, and integrates customer feedback loops to ensure that product decisions are informed by a deep understanding of the target audience.
Practical Application:
An AI product team working on a personalized learning platform can use a user research repository to store and share insights from user interviews, usability testing, and A/B testing experiments. This centralized repository enables the team to identify common pain points, understand user needs, and prioritize features that enhance the learning experience.
3. A structured product operating model enables scaling.
A clearly defined product operating model is essential for scaling product teams and ensuring efficient execution. Product operations defines and implements the processes, governance, and tools that streamline workflows, clarify roles, and facilitate cross-functional collaboration, enabling organizations to scale their product efforts effectively.
Practical Application:
A rapidly growing AI company struggling with inconsistent product development processes can implement a product operating model to define roles and responsibilities, establish clear decision-making forums, and standardize communication workflows. This model provides the structure and clarity needed to scale efficiently, while ensuring continued alignment with company strategy.
4. Start small, think big, move fast.
Even small, targeted changes can have a significant impact. Start with achievable quick wins to demonstrate the value of product operations and gain momentum for larger initiatives. Don’t try to do everything at once. Prioritize based on the most pressing needs and build from there.
Practical Application:
A company developing an AI-powered chatbot can start small by implementing a basic product newsletter to share updates and gather feedback from internal teams. As the product and team mature, the newsletter can evolve into a more robust communication tool to keep stakeholders informed of progress and ensure alignment on priorities.
1. Data-driven decision making is crucial for product success.
Effective data analysis, contextualized through a product lens, is essential for informing product strategy and decision making. Product operations teams help collect, analyze, and synthesize data from various sources, including internal systems, market research, and customer feedback. This enables product teams to understand performance trends, identify opportunities, and measure the impact of their work on business outcomes.
Practical Application:
A startup developing an AI-powered medical diagnosis tool can leverage product operations to streamline data collection from clinical trials, user feedback on prototype versions, and market research on competing solutions. This data can be synthesized into actionable dashboards for the product team to make informed decisions about feature prioritization, regulatory compliance, and go-to-market strategy.
2. Customer insights are the cornerstone of valuable products.
Capturing and leveraging customer and market insights is essential for building products that meet real user needs and solve market problems. Product operations streamlines user research processes, democratizes access to insights, and integrates customer feedback loops to ensure that product decisions are informed by a deep understanding of the target audience.
Practical Application:
An AI product team working on a personalized learning platform can use a user research repository to store and share insights from user interviews, usability testing, and A/B testing experiments. This centralized repository enables the team to identify common pain points, understand user needs, and prioritize features that enhance the learning experience.
3. A structured product operating model enables scaling.
A clearly defined product operating model is essential for scaling product teams and ensuring efficient execution. Product operations defines and implements the processes, governance, and tools that streamline workflows, clarify roles, and facilitate cross-functional collaboration, enabling organizations to scale their product efforts effectively.
Practical Application:
A rapidly growing AI company struggling with inconsistent product development processes can implement a product operating model to define roles and responsibilities, establish clear decision-making forums, and standardize communication workflows. This model provides the structure and clarity needed to scale efficiently, while ensuring continued alignment with company strategy.
4. Start small, think big, move fast.
Even small, targeted changes can have a significant impact. Start with achievable quick wins to demonstrate the value of product operations and gain momentum for larger initiatives. Don’t try to do everything at once. Prioritize based on the most pressing needs and build from there.
Practical Application:
A company developing an AI-powered chatbot can start small by implementing a basic product newsletter to share updates and gather feedback from internal teams. As the product and team mature, the newsletter can evolve into a more robust communication tool to keep stakeholders informed of progress and ensure alignment on priorities.
Suggested Deep Dive
Chapter: Chapter 6: Visualizing the Data
For AI product engineers, data visualization is a crucial skill. This chapter provides hands-on guidance and tools for creating effective dashboards and automating data insights, which are highly relevant for building and monitoring AI products.
Memorable Quotes
Why We Wrote This Book - Melissa’s Story. 11
It’s undeniable that product operations is finally getting the recognition it deserves.
Why We Wrote This Book - Our Story. 14
Product operations is the discipline of helping your product management function scale well.
Why Product Operations?. 25
Product operations helps solve this problem. It enables your product managers to focus on the most important outcomes - the things you hired them for.
The Three Pillars of Product Operations. 33
Think of it as the product manager for the product manager.
Getting to the Right Strategic Questions. 47
Having a consistent flow of data and insights is essential to working as an effective product management organization.
Why We Wrote This Book - Melissa’s Story. 11
It’s undeniable that product operations is finally getting the recognition it deserves.
Why We Wrote This Book - Our Story. 14
Product operations is the discipline of helping your product management function scale well.
Why Product Operations?. 25
Product operations helps solve this problem. It enables your product managers to focus on the most important outcomes - the things you hired them for.
The Three Pillars of Product Operations. 33
Think of it as the product manager for the product manager.
Getting to the Right Strategic Questions. 47
Having a consistent flow of data and insights is essential to working as an effective product management organization.
Comparative Analysis
While “Product Operations” shares some common ground with other books on product management and scaling organizations, it makes several unique contributions. Like Marty Cagan’s “Inspired” and “Empowered,” this book emphasizes the importance of customer understanding and building the right products. However, “Product Operations” shifts the focus to the enablement function that allows product managers to execute on those principles. It offers a more structured approach to scaling product teams than found in books like “Scaling Up Excellence,” providing the Three Pillars framework and a detailed roadmap for implementation. Unlike books focused solely on data analysis or user research, “Product Operations” integrates these aspects into a cohesive discipline. It acknowledges the complexities of cross-functional collaboration and offers practical advice for navigating organizational challenges, aligning more with the themes in “Team Topologies.” The book’s unique focus on the operational aspects of scaling product teams fills a gap in the existing literature, providing a much-needed resource for product leaders grappling with these challenges.
Reflection
This book provides a practical roadmap for establishing and scaling product operations, offering valuable insights and tools for product leaders navigating the complexities of growth. Its focus on aligning strategy with execution, data-driven decision making, and cross-functional collaboration resonates deeply with the challenges faced by many organizations today. By presenting real-world examples, it moves beyond theoretical concepts, making it a highly applicable resource. While the book champions the importance of process, it also acknowledges the need for balance with agility. This nuanced approach avoids the pitfall of becoming overly process-driven, recognizing that processes should serve the product and customer, not the other way around. A skeptical perspective might question the book’s focus on scale-up and enterprise companies, potentially overlooking the value of product operations for smaller organizations. However, the principles and frameworks presented are adaptable and can be applied at different scales with adjustments. The book’s strengths lie in its clear structure, practical advice, and real-world examples. However, it could benefit from further exploration of how product operations intersects with other functions, such as engineering, design, and marketing operations. Overall, “Product Operations” is a significant contribution to the field, addressing the need for more effective product management as organizations scale. It’s a practical guide that has the potential to transform product teams into more efficient, customer-centric, and outcome-driven organizations.
Flashcards
What are the three pillars of product operations?
Business Data & Insights, Customer & Market Insights, Process & Practices
What is the core function of product operations?
Scaling product management by providing essential data, processes, and insights to set strategy, prioritize, and streamline ways of working.
What is product strategy, as defined in the book?
A system of achievable goals and visions that work together to align the team around desirable outcomes.
What is TAM?
Total Addressable Market: the total potential value if you captured the entire market.
What is SAM?
Serviceable Addressable Market: the segment of the TAM you could capture with current or future products within your geographical reach.
What is SOM?
Serviceable Obtainable Market: the portion of SAM you could realistically capture, considering development time, competition, and staffing.
What are some key meetings in a product operations governance model?
Company Kick-Off, Quarterly Business Review, Portfolio Roadmap Review, Product Roadmap Review, Demo Days, Agile Processes
What are the three common organizational models for product operations teams?
Embedded, Centralized/Shared Services, Hybrid
What are the three pillars of product operations?
Business Data & Insights, Customer & Market Insights, Process & Practices
What is the core function of product operations?
Scaling product management by providing essential data, processes, and insights to set strategy, prioritize, and streamline ways of working.
What is product strategy, as defined in the book?
A system of achievable goals and visions that work together to align the team around desirable outcomes.
What is TAM?
Total Addressable Market: the total potential value if you captured the entire market.
What is SAM?
Serviceable Addressable Market: the segment of the TAM you could capture with current or future products within your geographical reach.
What is SOM?
Serviceable Obtainable Market: the portion of SAM you could realistically capture, considering development time, competition, and staffing.
What are some key meetings in a product operations governance model?
Company Kick-Off, Quarterly Business Review, Portfolio Roadmap Review, Product Roadmap Review, Demo Days, Agile Processes
What are the three common organizational models for product operations teams?
Embedded, Centralized/Shared Services, Hybrid