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Your Digital Transformation Program Is Wasting Your Money

By Adrienne Tan

The amount of money invested in “Transformation Programs” is staggering.

In the past 20 years we have seen Digital and Agile Transformation Programs grow and swell to $1.3 trillion dollars in 2020 alone. According to the HBR, 70% of that spend is wasted. Many companies miss a key component in their Transformation Program.

How will a Product-Led Transformation be different?


You only have to whisper the word “transformation” and the next thing you’ll see is people scurrying away.

It’s a word that isn’t commonly favoured by the Product community because Transformation Programs rarely allow Product Teams to autonomously decide how they’ll achieve their mission. The term “transformation theatre” reflects how new practices are perceived after a Transformation Program. Organisations arbitrarily issue new role titles such as Product Owner, Agile coaches are bussed in, and teams are organised in “squads”. This seems to be the extent of some Transformation Programs from a Product Manager’s perspective.

Rarely, do we hear of Product Teams given the space and time to conduct Problem and Solution discovery properly. Instead, Product Teams are normally given features to develop, not outcomes to achieve.

But, Transformation Programs incur significant costs.

There are various sources which suggests that the spend on Transformation Programs are astronomical. Some of which are;

Harvard Business Review states,

$1.3 trillion that was spent on Digital Transformation last year (2018)

Digital Transformation is not about the Technology

According to CIO magazine,

Global spending on digital transformation technologies and services was $1.3 trillion in 2020.

What is digital transformation? A necessary disruption

And Barry O’Reilly argues that,

By 2023, an estimated $7 trillion will be spent on these initiatives annually.

The Metrics Of Digital Transformation: Small Steps to Outcome-Based Innovation

According to the HBR,

70% of that spend is wasted.

Digital Transformation Is Not About Technology

As you can see, the amount of money invested in Transformation Programs is staggering.

Unfortunately, Product People are normally the overlooked recipients of Transformation Programs rather than actively involved change leaders. As Product People, we should not only deeply care about the dollars spent on Transformation Programs but we should find ways to participate and lead the program. These programs affect our practice directly. They affect our ability to do our jobs. Sadly, they can also badly affect our ability to meet our promises to our customers.

Transformation is such an important, emerging topic in the global Product community that we are focusing on it at LTP Digital 2021 | APAC.

The burning questions that we want to consider at the conference, and afterwards, are:

  1. How can Product People participate in company-wide Transformation programs, and extract more value from these initiatives?
  2. How can Product People design and initiate Product-Led Transformation programs that enable their organisation to continuously discover, design and deliver products to the right market at the right time?

What is Transformation?

Transformation is about embracing a new way of operating – an alternate way of living – for organisations and the people in the organisation.

According to Innosight,

“What businesses are doing here is fundamentally changing in form or substance. A piece, if not the essence, of the old remains, but what emerges is clearly different in material ways. It is a liquid becoming a gas. Lead turning into gold. A caterpillar becoming a butterfly.” The Transformation 20: The Top Global Companies Leading Strategic Transformations

A lot has been written specifically about Digital Transformation as,

The integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers. It’s also a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure.”  What is digital transformation?

Digital Transformations challenge current operating models and architecture, allowing organisations to be more adaptable to market fluctuations. It means the introduction of:

  1. Agile SDLC Practices
  2. Continuous Delivery
  3. Simplified Governance Model
  4. Continuous Funding Approach
  5. Team Performance Management Indicators
  6. New Roles & Career Paths
  7. Integrated Digital Technology
  8. Innovative Products

What do we mean by Product-Led?

“Product-Led” means aligning all your business activities around modern Product Management practices, by: 

  1. Continuously identifying markets and customers with unsolved problems, 
  2. Acquiring and or developing a feasible and sustainable solution to solve these problems,
  3. Exchanging measurable value by delivering a timely, desirable and intuitive solution to the market.

“Product-Led Transformation” means re-focusing your business on the fundamentals of real value creation, while embracing the benefits of the faster engines that digital and Agile practices have delivered.

Product-Led Transformation is more holistic than other transformations, because it begins with the customer. The outcome of a Product-Led Transformation is an organisation that is aligned first and foremost towards discovering and quantifying customer problems before designing solutions.

It is about changing established mindsets and practices to ensure that organisations stops throwing random features into their product mix, and hoping that somehow the good will emerge.

Why should we care?

Product-Led Transformation creates an environment for companies to build more successful products.

The evidence resoundingly shows that

Product-Led companies yield better financial results.”

“These companies perform better than other companies including those organizations built for the Sales & Marketing-Led era. Today there are 21 large public companies with a Product-Led model. These companies have a combined market capitalization of $208B and are performing better post-IPO.

Exemplary Product-Led organizations are Zoom, Datadog, Slack, Fastly, Pagerduty, Elastic, Surveymonkey, Pluralsight, Smartsheet, Docusign, Dropbox, Twilio, Atlassian, Shopify, New Relic, Hubspot, and others.”

What is Product-Led Growth? How to Build a Software Company in the End User Era

Being Product-Led also means using Product-Led growth techniques which reduce the reliance on sales and marketing to drive growth. The product itself is designed to motivate customers to subscribe to the product.

The difference between Digital Transformation and Product-Led Transformation

One of the key differences between a Digital Transformation and a Product-Led Transformation is that Product-Led Transformation focuses on introducing:

  • Better, more holistic Product Management practices, and
  • More strategic, effective Product Management roles.

What often happens after the implementation of a Digital Transformation program is that leaders continue to frame their plans as a series of features, instead of ‘problem’ or ‘outcome-driven’ plans. This leads to two commonly seen challenges:

  1. The organisation succeeds in feature delivery, but not necessarily customer-value delivery.
    They become good at ‘building the thing’, but are not asking ‘is this the right thing to build?’
  2. Teams are so focused on delivering features that they become mere order-takers, who are not entrusted to focus on tackling the real problems, and delivering the right solutions.

This is not to argue that Digital Transformations aren’t valuable. In principle, they are worthwhile. But often these programs run for far too long, and at the same time don’t go far enough. The intent of Digital Transformation is to improve the organisation. In practice, however, the Programs do not allow the right teams to participate, and to provide their insights as to the best ways to deliver value to the organisation, as well as to customers. Product-Led Transformation builds on the Digital Transformation mindset but provides additional capacity and tools to convince an organisation’s leaders to let go of dictating what gets built.

Product-Led Transformation teams do not start by focusing on delivering features. They start by focusing on solving problems, which ultimately delivers more genuine customer and business value. Another key difference between Product-Led and Digital Transformation is the approach to change. The Product-Led Transformation approach is a “minimal viable digital change program, delivered by a semi-autonomous Lean and Agile product innovation team.”

It is time to stop the waste

Seriously, stop wasting billions on Transformation projects. Instead, apply smaller incremental changes in the organisation, to test and learn if these changes make a positive difference. Consider learning more about The 7Ts of Product-Led Transformation.


Want to improve your company’s chances of Transformation success by learning how others transformed their companies and teams using Product-Led techniques? The evidence shows that Product-Led organisations yield better financial results.

LTP DIGITAL 2021 is a one-day conference that is all about how to become one of those organisations.