Product Org Design: From Early to Late Stage to Post-IPO (Part 1 of 2)

Lessons learned from my time as HoP/Dir/VP Product in various roles

Photo by UX Store on Unsplash

Organisational Design and restructures. Boy, do they often have a bad wrap, usually associated with cost cutting measures and business underperformance.

Sadly, many of us are not strangers to it. According to Layoffs.fyi, in 2023 alone, we saw 1,100 tech companies make layoffs for over 250,000 employees, with each layoff requiring often complex restructuring to ensure business continuity.

Screenshot from layoffs.fyi - my go-to tracker for monitoring layoffs across Tech

But often, restructures can be a result of more positive light, such as a result of a leader deciding to expand their team as part of organic business growth. Organisational design, after all, is a key component of Team Development, which is acknowledged by the Silicon Value Product Group as the most significant responsibility in Product Leadership as a VP.

So how does one effectively design and implement organisational design changes that minimises the impact to productivity and motivation?

Whichever side of coin of growth or downsizing you find yourself in, I want to prepare you as well as I can by sharing with you answers to the following questions:

• What do sample organisational designs look like per company stage?

• What lessons have I learned from the organisational design changes I’ve been subject to, across 3 case studies:

  • Growing Littlepay (from Angel/Seed to Series A) ← this post

  • Growing TIER (Scaling up, in Series C) when the company grew from 600 to 4,000+ staff within 12 months

  • Splitting PayPal (post-IPO) from eBay in 2015

• What are the Critical Success Factors for designing Product Organisations and communicating well regardless of size?

Hopefully by the end of this article, you will have gained practical tips on how you can receive, create and communicate organisational changes to minimise the potential negative impact on those teams around you.

Photo by Duy Pham on Unsplash

Note: The structures below are focussed mostly on B2B businesses, and are NOT recommendations of what you should do in your organisations, as each company is different! Rather, they are pictures and snapshots of time, of organisations I have worked in, with my own individual perspective of what I found worked and what could be improved.

Preamble: Team Size and Definitions

Just a note on Team (Squad) sizes, which remains the same across the company phases:

• Each Squad has a PM, a Tech Lead, and 4 to 5 Engineers

• Why a group size of 5-7 people?

  • Richard Hackman suggests 4-6 is the standard size of a team.

  • Jeff Bezos of Amazon believes that he would not attend any meeting between two teams if he could not feed the entire group with two Pizzas (one slice each of course).

  • Also, Miller’s Law suggests the number of people that is within the range of human capacity to process information is 7 (plus or minus 2).

• For sake of simplicity, DevOps is counted as an Engineer, who can either be aligned to the Squad level, or the platform level later when the company scales.

• Each Squad receives enabler or operational support, in the form of Product Designers, Product Ops, Data / Analytics, but this is usually later when more funding is gained to invest in these areas

• One Group is defined as a collection of Squads that have a common domain, product, or feature area of responsibility that ties them together. This can be based on user journey (e.g., for a electric scooter / shared mobility company, this could be ‘Ride Experience’ group where the experience for starting, riding and ending a ride is all under the same group).

• A Vertical / Tribe is an organisational unit that consists of multiple groups that are tied to a specific business objective or higher level domain.

• You may also have horizontal Chapters and Guilds depending on the domain expertise, subject matter, and technical topics needed to be discussed to ensure value is delivered to the customer. E.g., the ‘Micro Front-end’ Guild who specialises in building micro-frontend UIs, where each member is a Front-end engineer from various Squads.

Check out this diagram of Spotify’s Organisational Model, the basis of many Org designs in start-ups today:

Atlassian’s simplified depiction of the Spotify Organisational Model

Watch Areas: Regardless of Company Stage

When designing and implementing organisational designs, there are a handful of areas that need careful management to ensure change is implemented efficiently and in a way that respects the development goals and ambitions of staff as you (rapidly) scale up.

These themes are:

• Autonomy: How do we currently define and distribute decision-making authority within the product management team as it grows or shrinks?

• Strategy: How is the current product management strategy aligned with the overall business strategy? Who is responsible for articulating, synthesising and communicating strategy to their teams?

• Communications: How are important updates and changes currently communicated within the product management department?

• Change Management: How do we best communicate the organisational design to teams? Who is responsible, what are the key messages, and what are the potentially contentious questions that may arise?

• Decision Making: What is the current decision-making process for strategic priorities? How do we involve the right stakeholders are the right time?

• Reporting: What key performance indicators (KPIs) are currently being tracked and reported within the product management department? How are these data points being captured efficiently with minimal overhead?

• Performance Management: How is individual and team performance currently assessed? How do we need to consider the career goals of our team individuals and ensure they are reflected in new org design?

We dive into each of these themes below, as we explore the organisational design and responsibilities of functions within Early Stage, Late Stage and Post-IPO tech companies 👇

Early Stage Seed Start-up