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CEO Tom Conrad found that business units (Home, Pro, Home Theater) worked against the core idea that Sonos sells one integrated system. He reorganized into functional departments (Hardware, Software) to enable cross-functional teams and better resource allocation for the system as a whole.

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By incentivizing the organization around shipping new hardware, Sonos inadvertently neglected the core software platform connecting all devices. Software efforts became siloed to individual products, creating "horizontal" debt that benefited no single product but weakened the entire system, culminating in the app crisis.

CEO Tom Conrad canceled the "Pinewood" set-top box project because it spread the company too thin and originated from an internal desire for growth rather than a clear customer need. This pivot prioritized the core, differentiated "systemness" of Sonos audio over entering a crowded market.

Sonos CEO Scrapped Divisional Silos for a Functional Structure to Reinforce a 'Single System' Product Philosophy | RiffOn