The German Mittelstand has earned a worldwide reputation through innovation and quality. But holding your own in a dynamic global economy — one shaped by technological progress, changing customer needs and international competition — takes more than proven approaches. One modern way to meet these challenges is the Product Operating Model, whose core principles I have already put into context for the German Mittelstand. This approach puts customer needs at the centre and, in doing so, places new demands on engineering leadership and product leadership.
From Feature Teams to Product Teams
Traditional models rely on feature teams whose primary aim is to satisfy the requirements of the business. In the modern product model, by contrast, the focus is on solving problems for customers and for the business alike. The goal is to develop solutions that customers love and that are commercially viable at the same time.
The Paradigm Shift: Ownership Within the Team
In this model, decisions and the responsibility for solving problems are delegated to cross-functional product teams. These teams own the entire solution process and are measured on outcomes. That shift calls for new core competencies in order to succeed.
The New Core Competencies
The success of a product team rests on three key roles: product manager, product designer and tech lead. Each of these roles carries specific responsibility for risks that can arise in the product development process.
1. Product Management
- Responsibility: addressing value and business viability risk.
- Focus: understanding customer needs, conducting market research and ensuring the solution is viable for the business.
- Goal: products that create value and are profitable.
2. Product Design
- Responsibility: reducing usability risk.
- Focus: developing an intuitive, user-friendly design.
- Goal: an outstanding user experience that delights customers.
3. Tech Lead
- Responsibility: handling feasibility risk.
- Focus: building and scaling the solution within the constraints of available technology and resources.
- Goal: technically robust and achievable solutions.
In an ideal team these competencies complement one another and work together to minimise risk and secure the success of the product.
The Role of Product and Engineering Leadership
Engineering leadership and product leadership are the cornerstones of a successful transformation towards the product model. These leaders, often in the roles of CTO (Chief Technology Officer) and CPO (Chief Product Officer), carry several decisive responsibilities:
- Vision and strategy: developing an inspiring product vision and a data-driven strategy.
- Developing talent: recruiting, onboarding and growing product managers, designers and engineers.
- Team structure: building a team topology that encourages collaboration and innovation.
- Alignment: ensuring the product organisation works in step with the company's objectives.
The Path to Change
A central aspect of adopting the product model is people's willingness to learn new competencies. Leaders have to support their teams actively and create a culture of continuous learning. External coaches or specialised training can provide valuable support here.
For some employees this change may look like a threat, particularly when their existing skills are no longer sufficient. But for those willing to adapt, it opens up an enormous opportunity to stay relevant and take their career to a new level.
Conclusion: Securing the Future Through Modern Leadership
To remain competitive in a globalised, technology-driven economy, the Mittelstand has to invest not only in technology but in people and competencies. The shift towards a product-centred model requires strong leadership from CPOs, CTOs and others responsible for engineering leadership and product leadership.
With a clear focus on innovation, customer centricity and a culture ready to learn, the German Mittelstand can keep building products that set global standards and delight customers.
Where does your product organisation stand today? Contact me – I support CPOs, CTOs and their teams in building these competencies.
Further reading: Marty Cagan's article "Product Model Competencies"