Leading Without Authority: The Art of Lateral Leadership in Product Teams

In the AI era, everyone's talking about the latest tools and technologies. But here's what they're missing: while AI can analyze data and suggest features, it can't navigate the messy human dynamics that actually determine product success. You're still responsible for outcomes without authority over people. You still need to influence engineers who know the technical details, designers who craft the user experience, and stakeholders who control the budget. The difference? These fundamental leadership skills are now probably your best competitive advantage.

The Lateral Leadership Challenge

Product managers face a unique leadership challenge: they're expected to guide teams and drive product success without formal authority over team members. Unlike traditional hierarchical leadership, product managers must master the art of lateral leadership: influencing and directing peers who don't report to them.

This horizontal approach to leadership requires a fundamentally different toolkit than top-down management. In modern product organizations built around empowered, cross-functional teams, lateral leadership isn't just helpful. It's essential for success.

The different types of Leadership: Lateral vs. Hierarchical Leadership

The Three Pillars of Lateral Leadership

Organizational sociologist Prof. Dr. Stefan Kühl identifies three core mechanisms for lateral influence: understanding, power, and trust. While „power“ might seem counterintuitive for a role without formal authority, informal power plays a crucial role in effective lateral leadership.

1. Leading Through Understanding

Cross-functional teams bring together diverse perspectives: engineers focused on technical feasibility, designers championing usability, and product managers considering business value and viability. The magic happens when these different viewpoints combine to create innovative solutions.

Creating space for dialogue is your first job as a lateral leader. Rather than dominating discussions, strong product managers act as facilitators who ensure every perspective gets heard. They're excellent listeners who model active listening behavior, creating a culture where team members truly seek to understand rather than simply respond.

Beyond facilitation, product managers contribute their own context: communicating product vision and strategy, explaining the business model, and translating stakeholder perspectives. Making this contextual knowledge accessible and understandable is a critical contribution to team alignment.

Pro tip: Master the „superpower“ of visualization. Abstract technical discussions become much clearer when you sketch out ideas on whiteboards, flipcharts, or digital tools like Miro. This is especially crucial when working on complex AI products: machine learning models, data pipelines, and algorithmic decisions can feel impenetrable to non-technical stakeholders. Visual thinking helps everyone understand different perspectives and reach genuine consensus, whether you're explaining how a recommendation engine works or mapping out the user journey through an AI-powered feature.

Many teams find success with the „Product Trio“ approach where the product manager, UX designer, and lead engineer form a core group that streamlines communication without creating hierarchy. The trio doesn't make decisions over other team members' heads; instead, they prepare decisions so the full team can make them efficiently.

2. Leading Through Informal Power

While lateral leaders lack formal authority, they can build informal power through several means:

• Exclusive access to resources: Having direct connections to key stakeholders, leadership, or critical information sources

• Network mastery: Understanding and leveraging informal communication channels within the organization

• Technical expertise: Building domain authority that others recognize and respect

Servant leadership works particularly well in lateral contexts. Make yourself useful to your team, handle stakeholder communication, provide access to analytics data, or take on other tasks that free up your teammates. But be careful not to become a bottleneck by hoarding information or creating dependencies.

The most sustainable form of lateral power is expertise authority. This comes from deep knowledge of your product domain, understanding market dynamics, competitive landscape, customer needs, business model mechanics, and technical challenges. Equally important is process expertise: knowing how to run effective product discovery, manage delivery, and guide teams through each phase of product development.

Remember: Expertise authority must be earned fresh with every new team. Your previous successes won't automatically transfer. You'll need to prove your value again.

3. Leading Through Trust

The relationship layer matters enormously in lateral leadership. We don't become purely rational beings at work, personal relationships and trust fundamentally influence how teams make decisions and collaborate.

Trust must be earned through consistent, reliable behavior. When you promise your team that you'll create space to address technical debt after shipping a critical feature, you must follow through. When you advocate for launching quickly to address design issues in the next iteration, you need to ensure that iteration actually happens.

Building trust takes time and effort, while it can easily be destroyed.

Trust is fragile. While it takes many positive interactions to build trust, a single betrayal can destroy it completely. Product managers must be acutely aware of this dynamic and do everything possible to maintain their team's trust.

Trust becomes especially important during conflicts. Often, we fail to resolve disagreements because we don't recognize that relationship issues are fueling the substantive conflict. Strong lateral leaders know when to pause and address the relationship layer before tackling the surface-level disagreement.

A lack of trust leads to interpersonal conflicts that result in unresolvable disputes at a factual level.

The Dynamic Interplay

These three mechanisms — understanding, power, and trust — work best in combination. They can even substitute for each other: where extensive discussion might be needed early in a team's development, established trust might later allow for faster decision-making with less debate.

As teams mature and trust deepens, their decision-making speed and productivity can increase dramatically. This is why product managers should invest heavily in team development and why organizations should resist frequent team reshuffles.

Building Your Lateral Leadership Practice

Effective lateral leadership requires ongoing self-reflection. Regularly ask yourself:

• Am I facilitating genuine understanding? Do I create space for real dialogue and perspective-sharing in team discussions?

• Is my expertise recognized? Do I have knowledge gaps I need to address to build my authority in the team?

• Am I building trust? Do I invest enough in strong, reliable relationships with all team members? Can everyone trust me, and can I trust them?

Lateral Leadership in Action: A Real-World Example

Consider Sarah, a product manager at a fintech startup, facing a classic lateral leadership challenge. Her team needs to rebuild their payment processing system, a six-month project that will deliver no visible user features. The engineers are excited about eliminating technical debt, but the sales team is pressuring for new customer-facing features, and the CEO is questioning why they're „building nothing“ for half a year.

Building Understanding: Instead of defending the technical work in isolation, Sarah facilitates a series of cross-functional sessions. She brings together engineers, sales reps, customer support, and leadership. Using simple diagrams, she helps the engineers explain how the current system's limitations directly impact the sales team's biggest pain points: failed transactions during high-traffic periods and delayed customer onboarding.

The breakthrough comes when a sales rep realizes that the „invisible“ infrastructure work will solve her most frustrating customer objections. Suddenly, the sales team becomes advocates for the technical rebuild.

Leveraging Informal Power: Sarah uses her access to customer data and support tickets to build a compelling narrative. She doesn't just present numbers, she shares actual customer quotes about payment failures and calculates the revenue impact of system downtime. Her deep understanding of both technical constraints and business impact gives her credibility with both engineers and executives.

Building Trust: When the CEO pushes for a „quick compromise“ solution, Sarah doesn't immediately reject it. Instead, she works with the engineering team to honestly assess the risks and trade-offs. She presents the CEO with three options, including the quick fix, but with transparent timelines and consequences for each approach.

The result? The CEO chooses the comprehensive rebuild, the sales team actively supports the project timeline, and the engineering team feels heard and valued. Sarah didn't use authority — she created alignment through understanding, demonstrated expertise, and maintained trust with all stakeholders.

The Path Forward

Lateral leadership isn't just a nice-to-have skill for product managers, it's fundamental to thriving in modern product organizations. While it requires different muscles than traditional management, mastering these three pillars will help you become the kind of leader who can guide teams to extraordinary results without relying on formal authority.

The best product managers understand that their job isn't to have all the answers. It's to create the conditions where their teams can find the best answers together.