Why autonomous teams make awesome products

A while back we went to an excellent SODA social social event entitled ‘Product Design Stories.’

At it, two key members of the product team from Transferwise shared the challenges they overcome in taking their products from concept to launch, and how their company culture enables product success.

Transferwise is a company with a lot to admire. Their mission to make moving money as easy as possible, as fast as possible and as cheap as possible for example, or their principle of radical transparency.

In an industry where processes are usually slow, confusing and expensive, they’re a breath of fresh air.

The thing that stood out and stayed with us the most though was TransferWise’s attitude towards autonomy, and the effect that has on their teams and the products they produce.

Autonomous, independent teams

A lot of companies pay lip service to ‘hiring smart people and trusting them’.

As with many buzzy phrases, it’s one that probably came originally from Steve Jobs. And as with most Jobs quotes, it’s something that’s easy to say, but hard to do.

Even though they may sincerely want to empower teams, a hierarchical system can be so embedded in the fabric of an organisation, its leaders won’t be able to spot that they’re giving their own ideas disproportionate weight.

Nilan Peiris, TransferWise’s VP Growth puts the problem like this:

[Traditional] organisational structures are too dependent on “wise people” at the top of the organisation chart.

and we talked about this in tons of detail on our article on dealing with HiPPOs (that’s ‘highest paid person’s opinions.’) 🦛

However, with autonomous teams each department runs as a separate unit. Each team is accountable for their own section and decisions, rather than having this decided by a smaller senior management team.

They set their own KPIs which track impact on customer’s lives, and each team functions without dependencies. For example, TransferWise have a currencies team, which contains ex-bankers, developers and product managers – everything it needs to launch currency.

It decides each quarter which currencies it’s going to launch. No-one tells the team what currencies to launch, and anyone can challenge the team on what it’s doing.

Taking things further, in the TransferWise model of autonomous teams, members are encouraged to change department regularly.

This enables them to experience the needs of all of the company’s different users, not just one type, and is cemented by everyone spending time working in frontline customer support, hearing user problems directly.

So why do autonomous teams result in great products?

As you’ve probably guessed from the couple of sentences above, it’s (almost) all about customer focus. With a structure of this sort, teams aren’t driven and decisions aren’t made by an internal voice at the top who sits far away from customers, but at the point where the product meets the customer itself.

When product designers are embedded in product teams, they are given an incredible level of control over the impact they have. Alongside their team, designers are empowered to solve customer problems they believe are the most important, and they are accountable for the outcome.

Autonomous teams are also free of bottlenecks when it comes to prioritising their work, because they’re independent of eachother, and can then deliver in radically shortened timeframes.

As former Head of Product Jessica Chen Riolfi explains:

“I’ve seen these things firsthand: you can truly unlock employees’ and companies’ full potential through trust. You can compress product development cycles by over 50x (no exaggeration!) by removing approval processes and red tape. Above all, you can delight customers by getting them the right products that consistently solve their needs.”

Other organisations embracing autonomy

Earnin

Earnin is a startup that helps people track their earnings and transfer them to their bank accounts in real time, have recently moved from traditional product-building to autonomous teams and decentralised decision making.

The journey is documented as ‘a practical primer to actually start the transition’

Acast

Following a period of rapid expansion, Podcast platform Acast realised they’d outgrown their former structure that had organically developed and trundled along without much thought. They discuss their new autonomous model of self-organising teams within their Tech and Product departments.

Amazon

Amazon’s ‘Two Pizza Rule’ is really well known and widely talked about, but most people miss its point.

Yes, Jeff Bezos famously believes the ideal team size is 6-10 people – small enough to satisfy with two pizzas between them (apparently… these teams have clearly never been to Pizza Pilgrims 🍕😋), but his point isn’t about size, it’s about autonomy.

Fieldbook founder and ex- Amazon product lead Jason Crawford describes why he views the Two Pizza team as the ultimate model for autonomy and accountability

Why aren’t we all autonomous?

Competing teams and failing teams 😱

There can be challenges where two teams both try to change one area of the product with different aims. Having a product owner for all areas of the product helps resolve these disputes. However this only works if teams have a shared sense of customer context.

Relatedly, working out how to support a failing team – whether it’s due to a failure to identify KPIs or inability to move them- can be tough.

So many stakeholders! 🤯

As TransferWise discovered, when employee numbers rise it can feel like working with a massive army of stakeholders.

Determining how teams can empower their leaders to make decisions on their behalf without undermining the whole ethos is a bit of a head-scratcher.

Who’s my boss? 👔

Onboarding new starters to such a different culture efficiently can also be a challenge.

Most of us are so used to a top-down structure our natural instinct is to spend a few months looking for a boss to tell us what to work on. Increasing confidence and ambition within teams can’t happen overnight.

In Conclusion…

Ultimately, products which are born out of real customer insight and steered by customer-focused KPIs will end up being the biggest successes.

Teams unencumbered by influence from above, but who have a lot of interaction with customers instead, are ideally positioned to solve real problems.

As we’ve seen above, autonomous product teams aren’t a hassle-free solution (if they were, everyone would be doing it!) and as ever, there are no magic bullets.

However, organising teams in this way has a lot to recommend it, and there are a lot of commonalities with the methods we use, both internally and with our clients.

Great product teams start with a culture of user focus. Unlock your potential as a company with our Product Innovation Framework.