Unit 1: Diagnosing your current operating model

Learning objectives

Assess your organization's current product operating model honestly. Identify specific gaps between your current model and a genuine product operating model. Understand the common patterns that AI adoption exposes.

Video script

Reading material

The operating model spectrum

Most organizations sit somewhere on a spectrum from pure project management to genuine product management. Here are the five positions I see most often.

Project factory. Teams receive specifications from stakeholders and deliver them. The PM is a project manager with a product title. Success is measured by delivery dates. Discovery is something that happens annually, if at all. AI acceleration in this model means more features faster, with no improvement in outcomes.

Informed project factory. Teams do some customer research, but it doesn't materially influence what gets built. The PM gathers data and writes reports, but the decisions still come from stakeholders. AI here helps the PM produce better-looking analyses that still get overridden by executive opinion.

Hybrid model. Teams have some autonomy for smaller decisions but escalate anything significant. The PM negotiates between stakeholder requests and user needs, winning some battles and losing others. This is where most companies that "value product" actually sit. AI helps these teams move faster on the work they control but doesn't change the power dynamics.

Outcome-oriented teams. Teams own metrics and have genuine autonomy to pursue them. Stakeholders input into strategy but don't dictate features. The PM leads discovery and shapes the approach. AI here amplifies the team's effectiveness because the time savings get redirected toward higher-value work. This is rare but achievable.

Empowered product teams. The full Cagan model. Teams are given problems, not solutions. Strategy flows from the top, but solution discovery flows from the teams. PMs are strategic leaders, not backlog managers. This exists at some companies, and it produces the best results, but it requires organizational commitment that most companies haven't made.

Conducting the diagnostic

I recommend doing this assessment with your leadership team, not alone. Have each leader independently answer the four questions from the video, plus these additional ones.

How long does it take a product decision to go from "team idea" to "approved"? The longer the approval chain, the less empowered the team.

How many of your teams' current initiatives were generated by the team versus assigned by stakeholders? Track the ratio.

When was the last time a team changed direction mid-quarter based on what they learned? If it hasn't happened, teams aren't learning or aren't empowered to act on what they learn.

What percentage of team capacity goes to discovery versus delivery? In a healthy product model, 15-25% of capacity goes to discovery. In most organizations, it's under 5%.

Practical exercise

Exercise: Organizational diagnostic

Conduct the diagnostic for your organization (or one you know well). Answer all the questions from the video and reading material.

Then write a one-page assessment: where on the spectrum does your organization sit? What specific evidence supports your assessment? What is the single biggest gap between your current model and the model you aspire to?

Finally, identify the organizational belief or behavior that most strongly holds you at your current position. This is usually the root cause that any transformation effort needs to address.

Leadership reflection: Is there a mismatch between how leadership describes the operating model and how it actually works? If so, what sustains that gap?