How HR Can Build Digital Proficiency Through a Product Operating Model
(originally published March 1, 2024)
A practical blueprint for improving delivery, accountability, and employee value through product-oriented ways of working.
HR functions are under growing pressure to deliver better employee experiences, respond faster to business needs, and generate clearer value from technology investments. One of the most effective ways to enable that shift is through a Product Operating Model (POM), which organizes cross-functional teams around persistent products and platforms rather than one-time projects. This article outlines what POM is, why it matters for HR, and how organizations can implement it in a pragmatic, staged way.
Why Digital Operating Models Matter
A digital operating model defines how strategy, talent, processes, and technology come together to deliver value in a rapidly changing environment. Traditional feature or project-based models are typically designed for stability and control; more modern operating models are designed for speed, adaptability, cross-functional execution, and measurable customer value. For HR, this requires a shift away from siloed project delivery and toward a model that improves employee experience, scales change more effectively, and creates clearer accountability for outcomes.
According to McKinsey, the Product Operating Model brings together business, technology, operations, finance, and other relevant functions into cross-functional teams that own a product or service over time. In an HR context, that could mean a team accountable for continuously improving experiences such as recruiting, onboarding, or internal mobility. The model replaces episodic delivery with sustained ownership, enabling faster decisions, closer alignment to employee needs, and clearer accountability for value creation. Research from McKinsey indicates that organizations with integrated digital and IT operating models are 30 percent less likely to face transformation challenges, less than half as likely to encounter integration issues, and 60 percent more likely to report that technology investments created business value.
Table 1. Comparison of Traditional vs. Product Operating Models
The Core Components of a Product Operating Model
POM is built on a few core components that help organizations align ownership, delivery, and governance.
Products and product groups. A product is a technology-enabled service or experience used by employees, managers, or candidates. Product groups bring related products together across an end-to-end journey, such as talent acquisition or onboarding.
Product and platform pods. The foundational unit of POM is the pod: a small, cross-functional team with end-to-end accountability for a product or enabling platform. Product pods focus on user-facing outcomes and business value, while platform pods provide the shared technology and data capabilities that product teams rely on.
Practices and governance. Practices or chapters help build capability, consistency, and career development across roles such as product management, analysis, and engineering. A digital delivery office or PMO provides the governance needed to align priorities, funding, sequencing, and dependency management across teams.
Table 2. Product (and Platform) Operating Model Components
How the Model Works in Practice
In practice, a product pod is typically a cross-functional team of five to ten people responsible for designing, delivering, and continuously improving a digital HR product or service. It is usually led by a product manager from HR, supported by analysts and specialists from HR, IT, and other functions as needed. Early on, organizations are better served by standing up a small number of pods, learning from the first wave, and scaling deliberately rather than attempting a large-scale rollout all at once.
Taken together, these components illustrate why POM can materially improve HR’s ability to deliver digital change. Its impact becomes more pronounced as the model matures. Recent research shows that organizations with stronger product and platform operating model maturity outperform peers on measures such as returns to shareholders and operating margins.
For HR leaders, the implication is clear: stronger product ownership, better integration with IT, and more disciplined delivery can improve both employee experience and business performance.
For HR, the implication is straightforward: stronger product ownership, better alignment with IT, and more disciplined delivery can improve not only employee experience but also business performance. POM helps in three important ways. It reduces complexity by breaking large, fragmented initiatives into manageable products with clear ownership. It builds capability by placing digital accountability closer to HR leaders and teams who understand employee and business needs. And it increases discipline by introducing repeatable ways of working for prioritization, roadmap management, solution design, testing, and continuous improvement.
Five Priorities for Implementation
The following implementation priorities have the greatest impact when introducing POM in an HR environment.
1. Start small and scale deliberately. Launch a limited number of product pods first, use an early initiative to test the model, and refine roles, governance, and ways of working before expanding.
2. Invest in product leadership. Product managers are central to POM success and need clear mandates, strong business credibility, and support to operate effectively across HR and IT.
3. Clarify roles, capacity, and governance early. Define target-state responsibilities, staffing needs, and decision rights up front so teams understand how the model works and what capabilities are required over time.
4. Treat change management as core infrastructure. POM changes reporting lines, responsibilities, and decision-making habits, so executive sponsorship, communications, and onboarding support are essential.
5. Build the business case around employee and business value. Position POM not as an organizational redesign exercise, but as a way to improve employee experience, delivery speed, accountability, and the return on digital investments.
Closing Perspective
For HR organizations seeking to improve digital proficiency, the operating model matters as much as the technology itself. A Product Operating Model offers a practical way to organize around employee value, strengthen collaboration with IT, and deliver digital change with greater consistency, speed, and accountability.
The transition is meaningful and should be approached deliberately, with clear governance, capable product leaders, and sustained change management. For HR functions willing to make that investment, POM can provide a durable foundation for stronger transformation outcomes and more strategic digital delivery.
If you would like to explore how to develop your team’s digital proficiency, please contact us.
- Kevin Copithorne