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Key facts

The top half of companies in terms of the maturity of their product and platform operating models have 60 percent greater total returns to shareholders than bottom-half companies, and 16 percent higher operating margins.¹⁰ Top-performing teams are small and optimized for “doers.” A top engineer is ten times more productive than a novice, requiring companies to not just hire more of them but also give them work conditions where they can practice their craft most effectively.

The top half of companies in terms of the maturity of their product and platform operating models have

60%

greater total returns to shareholders than bottom-half companies.

Implications

While any company can get a handful of pods to work well, standing up and scaling hundreds or even thousands of them is another story. Companies need an operating model built around products (with dedicated teams developing and providing technology-enabled offerings or services used by customers and employees) and platforms (with dedicated teams that provide the back-end technology and data capabilities that support products). For these teams to work effectively, companies need to ensure that the broader organization (legal, cyber, risk, purchasing, finance, and so on) works closely with them to identify and resolve issues quickly. Our research shows that the greatest positive impact on outcomes is driven by reducing dependencies between working teams, establishing a consistent product development lifecycle, and empowering product owners and managers.

¹⁰

Aditi Chawla, Martin Harrysson, Hannah Mayer, and Megha Sinha, “The bottom-line benefit of the product operating model,” McKinsey, December 19, 2023.

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¹⁰

Aditi Chawla, Martin Harrysson, Hannah Mayer, and Megha Sinha, “The bottom-line benefit of the product operating model,” McKinsey, December 19, 2023.

While any company can get a handful of pods to work well, standing up and scaling hundreds or even thousands of them is another story. Companies need an operating model built around products (with dedicated teams developing and providing technology-enabled offerings or services used by customers and employees) and platforms (with dedicated teams that provide the back-end technology and data capabilities that support products). For these teams to work effectively, companies need to ensure that the broader organization (legal, cyber, risk, purchasing, finance, and so on) works closely with them to identify and resolve issues quickly. Our research shows that the greatest positive impact on outcomes is driven by reducing dependencies between working teams, establishing a consistent product development lifecycle, and empowering product owners and managers.

Implications

60%

The top half of companies in terms of the maturity of their product and platform operating models have

greater total returns to shareholders than bottom-half companies.

The top half of companies in terms of the maturity of their product and platform operating models have 60 percent greater total returns to shareholders than bottom-half companies, and 16 percent higher operating margins.¹⁰ Top-performing teams are small and optimized for “doers.” A top engineer is ten times more productive than a novice, requiring companies to not just hire more of them but also give them work conditions where they can practice their craft most effectively.

Key facts