The Product Operating Model for Large Organisations: An Executive Guide
- Darren Emery
- Jan 5
- 8 min read
From Project Paralysis to Product Velocity
Written for CIOs and COOs navigating the shift from project control to product-led execution.
Your teams are working harder than ever, yet your time-to-value is stagnating. You have "Green" status reports on your dashboard, but quarter after quarter the P&L tells a different story – slower growth, rising costs, and delayed returns.
This is the paradox of the modern enterprise: We attempt to manage 21st-century complexity with 20th-century control mechanisms. The "Project Paradigm" - funded annually, scoped rigidly, and delivered in silos - provides the illusion of control while actively destroying value.
It feels controllable, precise, and accountable. But underneath that comfort lies the reality: it slows you down, it splinters focus, and it disconnects daily execution from strategic intent.
If you are a CIO or COO, the bottleneck isn't your technology stack; it is your operating architecture. The Product Operating Model is not another agile methodology; it is a capital allocation strategy that replaces funding temporary projects with sustained investment in value-creating products - shifting your organisation from delivering outputs (features) to delivering outcomes (revenue, retention, efficiency).
The problem isn’t that your teams aren’t working hard - it’s that your operating model isn’t designed to deliver sustained value. Large organisations using a product operating model fix this by redesigning how work flows, who makes decisions, and how outcomes are funded and measured.
Before we dive in, here’s the difference worth understanding:
What a Product Operating Model Actually Is
A product operating model is a business execution system that organises how the enterprise works around value-creating products and services rather than temporary projects.
It clarifies decision rights, funding, team accountability, and measures of success so that daily execution is directly tied to strategic outcomes and customer value.
It turns good intentions into reliable results.
This isn’t about agile ceremonies, new frameworks, or reshuffling org charts. It’s about shifting how the organisation orchestrates work at scale - from planning to delivery to optimisation - so that value is continuous, measurable, and aligned to what the business is trying to achieve.
Why the Status Quo Keeps Failing Executives
Large organisations fall into the project trap because projects feel predictable. They have start and end dates, milestones, budgets, and outputs to tick off.
But that predictability is an illusion. Here’s what happens instead:
Teams optimise for outputs, not outcomes - Features ship, but value rarely moves.
Accountability stops at delivery, not at sustained customer impact.
Work starts and stops, leading to delays, churn, and unpredictable pacing.
Silos persist, even under an “agile transformation” banner.
Industry data confirms this mismatch.
Most organisations struggle to translate strategy into performance because their operating models don’t connect daily execution to strategic outcomes.
Only a minority have operationalised a shift to product-centric delivery - and those that have report dramatically better business results, as evidenced by multiple cross-industry studies.
A Research Wake-Up Call for CIOs and COOs
Here’s something to bookmark:
The Financial Case
McKinsey & Company analysis indicates that organisations in the top quartile of product operating model maturity achieve:
60% higher Total Shareholder Returns (TSR)
16% higher operating margins
This isn't management philosophy; it is empirical data - a measurable difference in financial performance.
If you care about growth, resilience, and competitive advantage, the operating model is a strategic lever - not an operational afterthought.
Core Mechanics of a Product Operating Model for Large Organisations
Your operating model is the culture of how work really gets done.
Without aligning work patterns, decision rights, incentives, and teams around strategic value creation, even the best strategies fall flat.
A successful product operating model for large organisations isn’t a collection of practices - it’s a coherent system. Here’s what it must include:
1. Value Streams Instead of Silos
Organise around flows of value - from ideation to customer impact - not around functions such as IT, finance, or marketing. This removes handoffs, aligns teams to outcomes, and makes work visible across organisational boundaries.
The Executive Shift: You stop optimising individual departments and start optimising end-to-end value flow. Success is no longer measured by functional efficiency, but by how quickly and reliably value moves from idea to customer impact.
2. Cross-Functional, Durable Teams with End-to-End Ownership
Stop bringing people to the work; bring work to the people. Move from "renting" resources from functional silos (which creates handover delays) to funding durable teams. Teams need everything they require - product management, technology, design, operations, data, and go-to-market skills - to deliver, measure, and improve the services they own. They don’t pass work on, they own results.
The Executive Shift: You are no longer managing resource utilisation rates; you are managing flow efficiency and outcome ownership. Funding teams replaces resourcing projects, and accountability moves from activity completion to value delivery.
3. Outcome-Based Funding and Governance
Instead of funding projects with fixed scopes and budgets, leaders fund outcome hypotheses backed by measurable value targets. Governance becomes continuous, not episodic.
The Executive Shift: You move from approving business cases upfront to continuously allocating capital based on evidence. Funding becomes a lever for learning and performance, not a one-time approval that locks in assumptions for a year.
4. Decision Autonomy at the Team Level
Good governance doesn’t mean centralised control. It means clear boundaries and guardrails with decentralised decision rights. Teams closest to the customer and data should be trusted to make decisions that drive outcomes - while remaining aligned to enterprise strategy.
The Executive Shift: You stop acting as the central decision engine and start designing decision environments. Leadership focus shifts from approving decisions to setting intent, boundaries, and escalation paths - increasing speed without losing control.
5. Metrics That Matter - Outcomes, Not Outputs
Traditional metrics tell you what was done. Outcome metrics tell you what changed. Revenue growth, retention, satisfaction, cost to serve - these align daily work with business performance.
The Executive Shift: You stop asking, “Are we on plan?” and start asking, “Is this changing the metric that matters?” Performance conversations move from delivery status to business impact.
6. Continuous Learning Loops
Product organisations build feedback into every cycle - build, measure, learn. Rigid plans give way to adaptive learning. Teams validate hypotheses with real data, reducing waste and improving predictability.
The Executive Shift:You replace long-range certainty with short-cycle truth. Strategy becomes adaptive rather than brittle, informed by real customer and performance data rather than assumptions locked into annual plans.
Why Most Large Organisations Struggle with Adoption
Despite clear business benefits, adoption remains low.
According to recent cross-industry research, only about 12% of organisations have fully operationalised the shift from project to product - and most identify multiple implementation barriers.
Common obstacles include:
Legacy project mindsets that resist change
Budget and portfolio processes that reinforce short-term work
Skills gaps in product leadership and product management
Governance structures that undermine autonomy
Misalignment between teams and the enterprise strategy
Middle management often resists this shift because their role changes from "assigning tasks" to "removing blockers." Without coaching and role clarity, they often become the antibodies that unintentionally attack the new model.
These challenges mean the transition must be pragmatic, evidence-based, and sponsor-led from the top.
What’s often missed is that staying project-centric is not a neutral choice.
It quietly compounds risk: slower response to market shifts, escalating coordination costs, disengaged senior talent, and a widening gap between strategy and execution.
Over time, the organisation becomes very good at delivering the wrong things efficiently - until competitors who are structured for speed overtake them.
90-Day Pilot Playbook: Fast Evidence, Fast Buy-In
You don’t need a multi-year transformation program to get started.
Here’s a 90-day pilot approach designed for CIOs who want tangible evidence and organisational momentum.
Weeks 1–2: Set the North Star
Agree on a business objective with measurable KPIs that matter to the executive team.
Example outcomes:
Reduce cost to serve by X%
Increase customer retention by Y%
Improve product adoption by Z%
Align stakeholders - CIO, CPO, business leaders, finance - on success criteria, governance, and decision rights.
Weeks 3–4: Map the Value Stream
Identify a product or service with:
High business value
Clear customer impact
Cross-functional dependencies
Quantifiable KPIs
Define the end-to-end workflow from concept to value realisation.
Weeks 5–6: Assemble the Cross-Functional Team
Build a durable team empowered with:
Product leadership
Engineering
UX/Design
Data/Analytics
Operations
Give them authority to make decisions and be accountable for outcomes.
Weeks 7–8: Fund Toward Outcomes, Not Projects
Replace project scopes with outcome hypotheses and measurable targets.
Example hypothesis:Increase active user retention by 15% within six months.
Fund the team to deliver toward this outcome.
Note on Governance: Outcome-based funding does not mean writing a blank cheque. It means funding is contingent on moving the metric. If the team cannot influence the retention rate after the first cycle, funding is reviewed or reallocated.
This creates tighter accountability than a 12-month project plan ever could.
Weeks 9–12: Build, Measure, Learn
Run short delivery cycles with clear feedback and measurement:
Customer feedback loops
Flow metrics and performance dashboards
Hypothesis validation checkpoints
Adapt based on evidence. If a hypothesis fails, iterate.
Week 13: Review, Communicate, Scale
Review results publicly with stakeholders:
What was achieved?
What was learned?
What should scale?
Use these learnings to build momentum and refine governance.
What Success Looks Like
At the end of the pilot, you should see:
✔ Greater predictability
✔ Faster decision cycles
✔ Stronger alignment between strategy and execution
✔ Clear outcomes over outputs
✔ Teams with real accountability
These aren’t incremental improvements - they compound organisational capability over time.
Evidence in Action: Vanguard’s Product Operating Model Transformation
Vanguard, one of the world’s largest investment management firms, provides a powerful example of the shift from project governance to a product operating model.
The Problem: Despite massive scale, Vanguard’s project-centric model fragmented focus and reduced predictability. Teams juggled dozens of concurrent initiatives, with only a fraction delivering real business impact.
The Change (2019-2024): They dismantled project structures in favour of durable, cross-functional product teams aligned to strategic outcomes. They modernised infrastructure to support modular deployment, and adopted flow metrics and outcome-based governance.
The Results:
5x acceleration in tech delivery speed
75% reduction in major incidents (stability alongside speed)
Record customer satisfaction scores
This wasn’t just team-level improvement - it was measurable business performance uplift tied directly to the operating model change.
The lesson for most enterprises is not to copy Vanguard’s structure, but to replicate the logic: durable teams, outcome funding, and evidence-based governance.
Closing Thoughts: The Architecture of Execution
The Product Operating Model for large organisations is not merely a different way to manage IT; it is a fundamental shift in capital allocation - and it directly ties strategy to results.
For too long, large enterprises have relied on the "Project Paradigm" to provide a sense of control. But as markets accelerate, that control has proven illusory. Project plans offer false certainty; they hide risk until the budget is spent and the deadline is missed.
In contrast, the Product Operating Model trades false predictability for actual visibility. By funding outcomes rather than outputs, and empowering teams to chase value rather than deadlines, you align your daily execution with your strategic intent.
As Peter Drucker famously noted, efficient management of the wrong things is not progress. Strategy is essential, but the architecture of how work gets done is what determines if that strategy survives contact with reality.
Your Immediate Next Step
Do not attempt to "boil the ocean" with a massive, multi-year transformation programme - that is ironically a project-mindset approach to solving a project-mindset problem.
Start here:
Identify one value stream (a specific customer journey or a critical internal platform) that is currently sluggish or opaque.
Apply the 90-day pilot logic outlined above to that single stream.
Prove the model works in your context, generate the data, and let the results build the business case for the rest of the enterprise - not through persuasion, but through evidence.
If you want speed without chaos and autonomy without anarchy, this is exactly the point where external perspective often accelerates progress. Schedule a call and we will be happy to guide you.
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