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The Product Operating Model

Lessons from Marty Cagan’s Transformed

Rethinking How We Build Products​

If you’ve been in product management long enough, you’ve probably heard the name Marty Cagan. His books Inspired and Empowered reshaped how we think about building successful tech products. But his latest book, Transformed, takes things to another level—it doesn’t just focus on what great product teams do, but on what great product companies do differently. And at the heart of it? The Product Operating Model.

I want to break this down in a way that’s not just theory but something tangible. Because honestly, if you’re working in an organization that struggles with slow, ineffective product development (and let’s face it, most companies do), this model could be the missing piece you’ve been looking for.

What Is the Product Operating Model?​

Cagan’s Product Operating Model (POM) is a fundamental shift in how product teams operate, moving away from the outdated, project-based delivery model to a continuous, empowered, and high-impact product approach.

Most companies today are still stuck in the project mindset—where work is organized into fixed-scope initiatives, handed down from executives, and measured by whether teams delivered “on time and on budget.” But Cagan argues (and I fully agree) that this way of working kills innovation, frustrates teams, and ultimately leads to mediocre products.

The Product Operating Model, by contrast, is built around empowered teams, continuous discovery, and true customer-centricity. It’s about shifting from delivering features to delivering real value.

The Four Pillars of the Product Operating Model​

Cagan defines four key elements that make up the Product Operating Model:

1. A Strong Product Leadership Team​

Many companies have product managers, but few have true product leadership. A strong product leadership team (CPO, VP of Product, and Directors) is essential to create the right environment for teams to thrive. Their job? Set a compelling vision, coach their teams, and ensure they operate with autonomy and accountability.

The key mindset shift: Product leaders are coaches, not feature roadmaps managers. Their role is not to dictate what to build but to ensure teams are solving the most important problems for the business and customers.

2. Empowered Product Teams​

This is a huge departure from traditional project-based teams. In the Product Operating Model, teams are fully accountable for business outcomes—not just for delivering features. This means they have the autonomy to figure out the best solutions to problems, instead of just being handed a list of requirements.

What makes a great empowered product team?

  • Clear objectives: They work towards measurable business and customer impact (not just a roadmap of features).
  • Cross-functional collaboration: They include product, design, and engineering working together from day one.
  • Continuous discovery: They talk to customers regularly, experiment, and iterate to find the best solutions.

3. Outcome-Based Governance​

Most companies manage product teams through delivery-focused KPIs (e.g., velocity, how many features were shipped). The Product Operating Model flips this on its head by focusing on real business outcomes:

  • Are we increasing customer engagement?
  • Are we reducing churn?
  • Are we improving conversion rates?
  • Are we driving revenue growth?

Instead of “Did we build the feature?”, it’s “Did we solve the problem?”

4. Transformed Product Culture​

Culture is often overlooked, but in the Product Operating Model, it’s the foundation of everything. A transformed product culture means:

  • Customer-first mindset: Everyone in the company—from executives to engineers—cares about understanding and solving customer problems.
  • Psychological safety: Teams feel safe experimenting, failing, and learning.
  • Continuous learning: Teams are constantly improving through research, feedback, and iteration.

Companies that successfully adopt this model don’t just treat it as a process change—it’s a cultural transformation.

Why This Matters More Than Ever​

If you’re in a company that still operates under a feature factory mindset—where teams are measured by how much they ship rather than by real impact—then this model is something you need to push for.

Cagan’s Product Operating Model isn’t just theory. The world’s best product companies—think Amazon, Apple, Netflix, and Spotify—already operate this way. They don’t just “build what executives say”; they empower their teams to solve meaningful problems and continuously refine their approach based on customer feedback and business impact.

The challenge? Most companies aren’t there yet.

So if you’re a product manager, a designer, an engineer, or a leader trying to drive change, start with this:

  • Push for true empowerment: Don’t settle for a backlog of features handed down from above—demand autonomy and accountability.
  • Shift the conversation to outcomes: Stop celebrating feature releases—celebrate real business and customer impact.
  • Invest in discovery: Make sure your teams are continuously talking to customers, running experiments, and refining their approach.
  • Educate leadership: If your execs still think of product teams as “build teams,” it’s on you to help them understand the power of the Product Operating Model.

Final Thoughts​

Marty Cagan’s Transformed is one of the most important books for product teams today. The Product Operating Model isn’t just a better way to build software—it’s the foundation for building truly great product companies.

If your organization is still operating under an outdated model, the time to change is now. The best teams are already working this way—don’t get left behind.

Let’s build products that truly matter.