Customer-centered is the optimal org model in a world of services

In Org Design for Design Orgs, we argue that design teams should be organized by customer journey. Let’s say your service is a simple marketplace. Instead of having designers embedded in the different product teams that make up the marketplace (a fully decentralized and embedded model), or instead of having a single monolithic team (a fully centralized model), to instead have one team dedicated to the Buyer Experience, and another team dedicated to Seller Experience.

This reflects our belief that design works best when focused on customer journeys and their end-to-end experiences, in contrast to focusing on the products and features that make up those journeys. It’s a subtle distinction, but powerful–features are simply a manifestation of the relationship between customers and the business, and organizing this way helps a team pay more attention to the whole relationship, and avoid the trap of being so focused on specific features that they can’t see the forest for the trees.

I’ve been presenting this model for a couple years now, discouraging design teams from organizing the way engineering and product management teams do, because those functions have different operating models. Product management often organizes around, well, products, which are discrete entities whose success is determined within the bounds of the product. Engineering teams organize either by product, or by platform/codebase, in order to realize efficiencies and promote quality.

So I was surprised when earlier this year, product management expert Ken Norton shared his perspective “Organize your product managers around customers, not code repositories. Connect PM areas of ownership to users and their product experiences. Maybe you have a buyer PM and a seller PM instead of back-end and front-end PMs.”

He then published a response from product executive Noah Weiss: “Just like it’s ideal to organize your PM team around customers and use cases, the same goes for engineering. Otherwise, you risk having a PM responsible for a use case having to work with half a dozen engineering teams to ship a feature: server, web, iOS, Android, infra, etc.”

So, what’s going on here?

I think these perspectives have aligned as a reaction to a broader shift in business, from products to services. Microsoft and Adobe once made boxed software sold on shelves, and the teams that worked on them were rightly focused on what went in their box. Now these companies sell subscriptions to access across their suite, and so coherence and coordination is crucial for success.

The key distinction between a product and service is that the service is predicated on a customer relationship. And in these networked services, these relationships must be maintained 24/7.

As companies embrace what it means to be a service firm, they understand that what’s most important is the healthy maintenance of that customer relationship. And so they realize they need to move away from old methods of organizing that were anathema to a customer’s end-to-end experience, and towards customer-centrism.

I believe design, because of it’s empathetic stance, and relatively smaller team size, has been able to sense and react to this shift ahead of other teams’ awareness. But whereas I used to think this orientation was perhaps specific to designers, I now believe we’ll see entire companies reshape this way.