Generally speaking, in the markets out there, there is the perception of an ever-increasing overlap between technological and business capabilities and responsibilities. That is, if previously responsibilities were well defined and separaed at a “functional” level, today, units and teams often play both roles.

 

We can explain this trend with a market dynamic that sees a reduction in the cost of prototyping and development and that of integration, and, as a consequence, the birth of a market made up of multiple and innumerable solutions.

 

This market and technology dynamic drives us to a landscape where business processes and available technology are intertwined, influencing each other. As the minimum scope and size of a technological artifact (such as a SaaS, for example) that is necessary to achieve some sort of market sustainability, decreases (it costs less to develop and to integrate), the way we adopt and integrate technology changes, and it brings ever more power to the user.

 

 

In such a market:

 

• companies are called to develop modular and easily integrated technologies and solutions
• customers are adopting an ever-increasing diversity of solutions 
• services and software (or, more generally, technology) are increasingly overlapping

 

If it’s true that some incumbents solutions – particularly generalist and ubiquitous – such as Microsoft’s or Google’s, can still manage to be perceived as horizontal and provide an “operating system”, covering a significant part of the user’s workflow, many more opportunities lie in developing vertical solutions that respond to a particular Job To Be Done of the customer and can be easily integrated.

Here’s Scott Brinker highlighting the danger of losing focus on the integration capability of your product.

 

 

 

 

 

Organizational and skills impacts

 

Such a pressure towards modularity and multiplicity means that corporate teams and units must increasingly be understood as product units. Units should be autonomous and with an end-to-end responsibility to fill one or more user needs and be able to formulate business hypotheses and manage their P&L. As more power accrues to the uses (as we said before) it’s normal that a larger part of the organization must be customer driven and customer paid.

 

Over time, and also thanks to new technological enablers such as AI, we will see an ever-increasing possibility of combining and integrating distinct pieces of solutions and software. The pressure on companies to create products and services in a way that they are easily integrable and connectable through clear and simple interfaces such as “APIs” grows along with the need for simpler and new business models (e.g., monetization of on-call APIs). We wrote about these dynamics at large in our articles Designing Extendable Platforms – protocols, no-code, AI, and modularity and Towards Modular and Composable Markets.

 

These strong integrability related requirements will be even more vital within a single company. As the company must be able to produce different modular products and services the integrability of those will be crucial.

 

 

 

New approaches to Go To Market 

These new characteristics of the business landscape generate, at the same time, increasing pressure for teams to understand and design distribution and monetization strategies that are more “centered” on the product and less dependent on traditional approaches to “sales”. 

 

In this sense, so-called “product-led” and “ecosystem -led” product marketing and distribution mechanisms are increasingly gaining ground. With the first, we describe all the mechanisms that allow the product to “sell itself”. For example, transforming occasional users into enterprise account customers as the need for additional features or a larger or more diverse number of users increases. 

 

With the second, we describe how today there’s an increase in the possibilities of distributing software and services within existing ecosystems: for example, as “apps,” “plug-ins,” or even simply as services forming part of a service catalog in a marketplace.

 

 

 

Indeed, the illustration below – taken from the “State of Platforms 2024” report – shows that of the 50 largest software companies in the world, the vast majority (98%) have at least one third-party app marketplace, and 86% also support a service marketplace (usually consultancy services) at least in part linked to the adoption and customization of the software.

 

 

 

Another skill emerges as key then: units and teams must master go-to-market and growth across the various channels we’ve identified before, i.e., Sales-led, Product-led, and Ecosystem-led. Customer acquisition and the capacity to run a growth model properly and understand the relationship between customer acquisition, retention and unit economics becomes key as more units are in touch with the customer and they can’t depend on traditional sales channels.

 

 

 

A new perspective beyond organizational agility 

 

By acknowledging such an increase in speed of evolution and change in the market, and the thinning of boundaries between inside the organization and the outside, building product-centricity, organizational agility, and adaptiveness has been heralded as a significant driver of success, but what are the broader implications of the changes we just described beyond team empowerment?

 

What other skills and capabilities are needed for a contemporary organization to resonate with such a market?

 

Besides the evolution towards product centricity and agility/adaptability, the organization needs to give teams greater autonomy and easier access to a layer of enabling technologies. Along with that, access to customer data is key. A cloud operated, optimized and fast to deploy technology and a reliable customer data platform can provide teams and organizational units with a more remarkable ability to:

 

• create products and services faster
• create products and services that are more significant to the customer 

 

From a purely technological standpoint then, the organization will be responsible for developing platform engineering capabilities and exposing its “internal developers” to enabling services that minimize the time to market the product units, especially those that are heavily software or, more generally, tech-dependent. 

 

Such product units will have to deliver business capabilities such as product strategy, continuous discovery (continuous identification of user needs), and design. Operating at the edge and in touch with the customers those skills will be key but along with the capacity to cooperate with and use services from key centralized platforms in technology adoption and provisioning, Artificial Intelligence and training, Customer data access and more. 

 

Application and infrastructure modernization, therefore becomes central, especially with the advance of technologies such as AI which require, among other things, substantial harmonization and arrangement of data.

 

Otherwise, we risk an organization with a tremendous lack of coherence, and where scale is never really achieved.

 

 

 

 

 

A Broader set of skills and capabilities 

In light of these changes a broader and more diverse set of skills and organizational capabilities becomes central to the modern enterprise.

 

An evolutionary framework emerge to go from a “functional” company model to a so-called “platform” company model where certain key dimensions evolve along the following lines:

 

 

 

 

Conclusions

In today’s rapidly evolving market, building an adaptive organization structure is just the beginning. Embracing modularity and integration, and enabling the organization with flexible technologies that can help units focus on catering to diverse customer needs is also key. Product-centric can foster autonomous, end-to-end responsible teams that can better navigate the complexities of modern business landscapes. 

 

Leveraging AI and APIs further enhances integrability, as units search and explore new business models and Go-To-Market paradigms like product-led and ecosystem-led growth for new patterns of expansion. Ultimately, the organizations that thrive will be those that cultivate a broad set of skills and capabilities, beyond traditional functional models embracing a platform-oriented approach to the enterprise.