In my previous post, I discussed how working in teams is more effective than working alone when solving complex problems. I also highlighted the differences between various types of teams. Ideally, we want many empowered product teams working toward solving the right problems, but how do we guide these teams to move in the right direction?
The Shift from Hierarchies to Teams
The team-centric approach, as suggested by the product operating model, can sometimes feel unclear regarding leadership and direction. In fully autonomous teams, traditional hierarchies disappear entirely, which is a major shift for many organizations. It can be a difficult transition.
In traditional hierarchical organizations, every individual has a defined role, making it clear who does what and how communication flows (up and down the hierarchy). This structure works well in simple, predictable environments because tasks can be easily divided and assigned. However, when faced with uncertainty or complex challenges, this model often struggles. Responsibilities can fall through the cracks, with employees expecting others to handle issues that don’t fit neatly into their roles. Leaders issue commands, and employees execute tasks, leaving little room for innovation or exploration.
In a team-centric organization, there are no rigid hierarchies. Information flows freely throughout the system, and each team is tasked with solving specific problems. Sometimes, responsibility lines can blur, but this is natural. The key is that important problems get solved, and it’s better for individuals to take initiative rather than wait for someone else to act. What’s crucial in this model is a shared sense of purpose or direction at a higher level to keep teams aligned and working toward common goals.
In this environment, teams are not expected to simply follow orders. They are encouraged to deeply explore the purpose behind a leader’s request and solve the real problem, rather than just executing a predefined task. Leaders, therefore, can’t command in the traditional sense, instead, they must lead by providing context and direction.
In team-centric organizations it’s natural for management to operate in teams as well, fulfilling their responsibilities while providing context to other teams. This setup helps management understand the power of teamwork and how they can better support the rest of the organization. I’ll dive deeper into leadership teams in a future post.
If we do a quick comparison of these types:
| Aspect | Traditional org | Team centric org |
| Decision-Making | Decisions are made by management with assigned power. | Decisions are made at the level where the need arises, encouraging autonomy. |
| Responsibility & Goals | Responsibility and goals are divided across departments, often leading to silos. | Shared responsibility with a common, collective goal across the team (or org) |
| Work Style | Focus on individual tasks and accountability. | Emphasis on collaborative teamwork and shared ownership of tasks. |
| Reporting | Rigid reporting structures through hierarchical levels. | Transparent communication and direct reporting across all team members. |
| Stakeholder Focus | Primarily focuses on internal stakeholders and organizational goals. | Customer-centric focus, prioritizing external needs and feedback. |
| Leadership Style | Leadership is based on position and rank within the hierarchy. | Emphasis on self-leadership, with leadership roles shared or distributed among team members. |
| Communication | Formal communication follows the hierarchy, often slow and structured. | Dynamic and fluid communication based on immediate needs and relevance. |
| Information Access | Information flows from the top down, often restricted to specific levels. | Information is openly shared with all team members, promoting transparency and inclusiveness. |
| Managerial Roles | Specialists or senior employees are often appointed as managers, focusing on oversight. | Specialists are integrated into teams, contributing their expertise without strict managerial roles. |
The Reality of Team-Centric Organizations
Purely team-centric organizations, where hierarchies are completely absent, are rare, if they even exist. Typically, there is some form of upper management, and that’s not necessarily a bad thing if handled correctly. Leadership’s role is to set strategic context and provide direction. This is the middle ground where most organizations with teams operate.
However, if the transition is mishandled, it can create significant challenges. Many companies replace the lower layers with teams but leave the top management unchanged, sticking to old ways of working. This puts immense pressure on the managers directly above the teams, making them the key figures. These managers need to operate in both worlds—acting as modern leaders who help teams grow while still fulfilling traditional managerial duties of reporting to upper management. This requires a unique skill set, combining leadership, communication, and adaptability.
A common problem with traditional hierarchies is the creation of silos, which can also happen between teams if not carefully managed, leading to misalignment and poor information flow.
To successfully navigate the middle ground, leadership must embrace modern leadership principles. This means supporting and empowering teams to succeed while providing clear direction and context. The teams themselves are the heart of the organization, driving the best outcomes for both customers and the business. The traditional hierarchy needs to be inverted, with teams at the top.
The inverted pyramid isn’t just a metaphor; it’s a practical guide to the cultural shift leadership must embrace. The key question they should ask themselves is: Who works for whom, and where is value truly created?
In a business inspired by the product operating model, the customer takes center stage—sometimes even to the point of obsession (https://www.amazon.jobs/content/en/our-workplace/leadership-principles). Teams work closest to the customer, using data and feedback to deliver the best possible solutions to customer problems. This is where the real value is created.
The rest of the organization exists to support these teams in solving those problems. Support can take many forms: providing strategic context, ensuring information flows freely, and helping teams remove impediments. It’s clear that the business works for the customer, and leadership’s role is to create the best possible environment for value creation—which happens at the team level.
For more on this subject and with nicer imagery look into my colleague Jimmys video.