Internal Product Teams

Internal Product teams are responsible for defining the product and strategy and converting business objectives into product outcomes for stream teams. To deliver on the objectives they define the structure and scope of the Stream Teams aligned with the product and then empower them to deliver using the context of the product vision and strategy. Finally, they coach, support and develop the Stream Teams to ensure they are delivering the right outcomes.

Internal Product Teams are identical to Product Teams in terms of the team structure, roles, and responsibilities. The only difference is that they focus on internal products and services that enable the Stream Teams associated with the external products to operate more effectively and efficiently.

For information on how they operate you can view the Product Team section.

Internal Team Types

The Need for Internal Product Teams

Internal departments are set up for the efficient delivery of their particular tasks. The functional structure prioritises the efficiency of delivery at the expense of reactivity. This means that when Stream Teams interact with these teams there is often a mismatch in priorities and expectations. The slow and unpredictable response times can be a blocker to quick delivery.

ZeroBlockers addresses this problem by shifting the focus of the internal departments from being delivery-focused to being customer-focused. The Stream Teams are the customers of the internal departments, so in the same way that a Product Team identifies customer pain points, designs experiments to test solutions to those pain points, the internal departments should be doing the same. That is why they are branded as Internal Product Teams in the ZeroBlockers framework: the goal should be the productisation of their services to make them more predictable and easier to integrate.

Incentivising Productisation

We can have the best of intentions for how reactive internal departments will become but the reality is that without strong enough incentives to change, the status quo will remain. Incentivising Productisation is about introducing competition and accountability into the internal departments to ensure that they are delivering the best possible service to the Stream Teams. The two types of competition are:

Internal Competition

The supermarket chain VkusVill has a policy of at least two suppliers for everything, including internal services. This means that they have two finance departments, two legal departments, two HR departments etc. Each supermarket location, equivalent to our Stream Teams, is free to choose which internal department they want to work with. If one supplier is consistently being chosen then it receives more funding at the expense of the other supplier. This puts the incentive on the departments to structure their services in a way that is most valuable to the teams.

External Competition

Haier took a different approach. Each internal team is set up as a standalone company and they need to balance their P&L. The idea is that if they can find a way of working that is more efficient than external suppliers then they should be able to capitalise on that by selling their services externally. If an internal team needs legal advice, for example, they are free to choose between the internal legal department or an external law firm. Using this model Haier has produced 7 spin-off unicorns (valued at greater than $1bn) as well as 120 gazelles (growing revenue at greater than 20% for four or more years from a base of $100k).