Guiding Teams Through Product, Platform, and Service Differences
Working with leadership teams as part of my role leading a global product operating model practice throughout my career, I cover all industry types and sizes, helping companies evolve and modernize their businesses. I am fortunate to observe common patterns across these companies, which yield or hinder results. One common pattern almost apparent everywhere is the simple question and debate about what a product is.
This simple question is quite revealing during countless workshops, where it uncovers insights relevant to culture, governance, reward systems and customer-centricity. It catalyzes internal debates among teams about the distinctions between products, platforms and services.
When you peel away the details and dive into these differences of opinion, which can be seen as academic by some, I’ve come to realize that this basic definition can either facilitate or hinder essential abilities to deliver value, innovate and minimize operational costs and waste.
Why does this matter?
When there is a debate about the difference between a service, product, platform or capability, I often observe variations in customer relationships, governance models and success metrics. Products are often assumed to be a type of entity that creates value for the end customer to interact with. In this scenario, teams would typically have a closer connection to the end customer, use product managers and practices and govern progress through product-driven OKRs and roadmaps.
Platforms underneath this are commonly seen as complex aggregated capabilities or services, typically technology-centric with an underpinning technology strategy. Services or capabilities provide functionalities to the masses who can choose to utilize these.
What typically manifests when this construct is in place is an abstraction of the customer and value. Platforms and services evolve with more assumptions than validated assertions, complicating customer experiences and journeys and yielding increased amounts of tech debt and waste, partly due to the loose correlation and attribution.
In these systems, despite the best intentions, the customer becomes so abstracted that it results in the development and distribution of internal capabilities in a generic manner, lacking specific customer focus and coherence. This ultimately results in a company having conflicting operating models and goals, creating tension between product, technology and "the business"—a common vernacular highlighting that the company is not working in unison.
What changes if everything is a product?
Before exploring this question, let’s define what a product is, or at least share how I define it with the customers and companies I work with.
A product is any entity that delivers repeatable value to customers.
Yes, it can be that simple, and there is power in simplicity. If you consider a product in the collective term to be any entity (service, capability, platform, product, etc.) that produces repeatable value to customers, then it changes the relationship of all those entities.
Each product, by that definition, needs to identify and understand its customers, and a key point here is to deliver "repeat" value. That is, it can continue to deliver value to any customer that is consuming or using it and/or deliver the same value to other new customers who share these needs or problems to be solved by the product. In a digital context, that especially means you have an ongoing relationship to meet your customers' expectations as they evolve.
The impact of this on a larger organization is the shift for all “products” to know their customer, to recognize and measure the value they deliver and to be accountable for that. This change typically yields increased value attribution measures, goals and outcomes. Platforms and services don’t simply push capabilities for consumption but embed product management capabilities through the layers of the organization, which invoke customer-centric mechanisms to focus and provide value.
As these layers connect, the attribution and value to the end customer improves, as does a more collaborative strategy on customer experience, as the collective standards and goals are measured not just at a team level but at a collective, collaborative level, measured by end customer satisfaction and consumption. This improves internal cohesion, transparency and total cost of ownership for any product.
To highlight this by example, I was recently working with and researching a large retailer in EMEA. The symptom that caused the analysis in the first place was that the leadership team was concerned that there was increasing engineering spending against a decline in customer satisfaction and agility with lower scores on internal platform consumption despite increased platform-related spending.
When analyzing their portfolio over a 12-month period, it was observed that an increasing number of platforms were being built. Diving deeper into this and interviewing the product and platform leaders, it became apparent that there was a key driver behind this trend. Products required more governance around ROI and customer value than platforms to be commissioned and supported. As a result, new ideas were being pitched more as platforms that didn’t have the same customer-centric rigor as customer-facing products.
So large platforms were being built on technology-driven strategies alone, not engaging with or being accountable to ROI or internal consumers, ultimately degrading the customer experience and increasing the complexity and value delivered. By redefining governance to apply the same level of rigor for platforms as for products, this approach effectively curbed the trend, resulting in improved margins, decreased costs per idea validation, reduced waste and increased platform adoption.
Viewing everything as a product is not just a semantic change but a strategic realignment that can lead to greater customer centricity, operational efficiency and innovation. By adopting a product mindset across services, platforms and capabilities, organizations can ensure that every team is directly contributing to and accountable for the customer's satisfaction and the continuous delivery of value.
This helps break down silos between technology, product management and business strategy, fostering a unified operational model with more meaningful success metrics. The resulting benefits include tighter governance of value creation, reduced waste and improved customer experiences, collectively enhancing the company's agility, ROI and competitive edge.
Resources:
"Product vs. Platform vs. Service: Understanding the Differences" - This article provides a clear overview of the distinctions between products, platforms, and services, helping teams navigate these concepts effectively.
"The Role of Product Definition in Modern Business Strategy" - A whitepaper that explores how defining products, platforms, and services can impact business strategy and offers guidance for teams looking to differentiate between them.
"Product, Platform, and Service Design: A Practical Guide for Teams" - This book offers practical advice and examples for teams working to design and differentiate products, platforms, and services in today's competitive market.
