$1.3 trillion was spent on transformation programs in 2020. Digital transformation alone does not deliver the expected return on investment. The evidence shows that Product-Led organisations yield better financial results. LTP DIGITAL 2021 is all about how to become one of those organisations.
“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.
Product-Led 1.46 sec
Better Financial Results 2.18 sec
Why should we care?
Transformation Programs incur significant costs. According to the CIO magazine, Global spending on digital transformation technologies and services was $1.3 trillion in 2020.1
According to Barry O’Reilly,
By 2023, an estimated $7 trillion will be spent on these initiatives annually.2
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.
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.”3
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.
How is this different than
One of the key differences between a Digital Transformation and a Product-Led Transformation is that Product-Led Transformation focuses on introducing:
1. Better, more holistic Product Management practices, and
2. 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.
2. They become good at ‘building the thing’, but are not asking ‘is this the right thing to build?’
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 is improve the organisation, but the practice doesn’t allow the right teams to participate, and 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.”
Product-Led vs Digital Transformation 2.15 sec
The 7Ts of Product-Led Transformation 6.06 sec
What are the 7 Ts ?
The 7Ts of Product-Led Transformation covers both the technical aspects required to succeed and more importantly, the adaptive skills needed to successfully deliver the outcomes promised by transformation.
The burning questions that we will answer at LTP DIGITAL 2021 are:
- How can Product People participate in an existing company-wide transformation program and extract more value from those initiatives, or
- How can Product People design and initiate a Product-Led Transformation program that enables their organisation to continuously discover, design and deliver products to the right market at the right time?
The 7 Ts have been developed to ignite our thinking and to ensure that Product concepts and principles are included in any type of transformation program.
The 7 Ts include but are not limited to the following considerations:
How do we take action from the definitive market signals that require the organisation to transform its current way of operating?
Transformation is a necessary process in all organisations because technology and marketplaces are moving at an ever-increasing pace. It is no surprise that organisations have to keep up or perish.
As Product People, our role is to pay attention to internal and external triggers that may disrupt the way our organisation competes. More often than not, there are multiple triggers that indicate that we need to make a change in the way we interact and deliver value to the market.
As Product People, once we’ve identified the triggers, we have to deliberately prepare our response with a Portfolio or Product Vision and an implementable strategy, in order to galvanise the organisation with a convincing purpose for the necessary changes.
How can we imagine success, and participate in the design of the Transformation plan with a strategic focus on being Product-Led?
Every Product-Led Transformation Program requires a tactical plan outlining discrete steps and actions that will enable the team to achieve a ‘Target State’. In the case of a Product-Led Transformation, the ‘Target State’ must be aligned to the Portfolio or Product Vision; specifically how the organisation will change the way it orchestrates Product discovery, delivery and growth.
We focus on a tactical plan rather than a top-level strategy in our 7Ts, because the details and the intricate steps of the program matter.
Each element of the Product-Led Transformation tactical plan is critical for continued success.
How can you craft a timeline with achievable milestones and metrics to measure and guide the team to success?
It is difficult not to consider transformation as a large, onerous project. The word “transformation” itself suggests that significant effect is going to be needed.
But, the Product-Led Transformation approach should be an experimental, iterative, meaningful course of action, leading towards a lasting, impactful way of operating.
Transformation does not need to be a big project but it does need to make a big impact (and rightly so).
Engineering the timeline for a Product-Led Program should reduce the change fatigue that often sets in during any large change initiatives. Embedding the concept of adaptability and accomplishments through experiments and celebratory milestones should keep the program energised.
Change is uncomfortable and for most people, threatening, but for change to occur, there needs to be a sense of urgency to propel people to transition from their current state to a new, better way of operating.
We need to apply positive pressure and that according to Kotter, requires CEOs to communicate the vision by a factor of ten.
How can we identify, recruit and onboard a high-performing product team to support the Product-Led Transformation journey?
During any transformation effort, it is common to get caught up in the technology. New tools, new systems, new infrastructure all promise to fundamentally change the organisation.
But you can’t transform without people.
Technology is the enabler that provides people with the tools to transform organisations.
When leaders think about investing in technology, they should first think about investing in the people who can make that technology useful.
The only way to transform is to identify and hire the right people with the right attitudes and skills and put them in the right seats.
How can you seek out, lean on and learn from Product People that have successfully navigate their Transformation mishaps?
Tell Tales is the learning component of the Transformation Program.
In reality, we all know that Tactical Plans change. Especially if we experiment and execute the tasks and activities in functioning environments. make every effort to corroborate our plans and investment made in the planning process.
One way to reduce the risk of failure is to create and run an “Outreach Plan” to learn from other organisations. The aim should be to help key stakeholders in your organisation to have realistic expectations about transformation and the process of transforming.
The old adage ‘stand on the shoulders of giants’ really applies when the organisation is embarking on a transformation program. It is without a doubt, a significant expenditure and while mishaps will occur, we should try to avoid failure if possible.
How can you highlight and zealously communicate the Transformation Transition period to your Product Teams to maintain their drive and commitment?
Change is perhaps the hardest part of any transformation program. Like all journeys, all programs begin with anticipation and a flurry of activity, but after a few heady weeks, it can feel like nothing has happened.
Unfortunately the change process itself takes time. Important changes generally cannot be completed overnight. This means that the deliverables and the long term benefits described in the transformation program may not be evident for quite some time.
While the program Timeline and the Tell Tales outcomes can be used to educate people in the organisation about the transformation plan and potential pitfalls, during the transition period ongoing, visible internal publicity is required.
Keep in mind and plan for the fact that the transition period requires significant, ongoing conversations and presentations to drive the organisation towards its Target State, and to maintain alignment.
How can you explain the difference to your peers that Product-Led Transformation delivers broader, more beneficial outcomes than an Agile or Digital Transformation alone?
The “truth” is that all good things must come to an end. In reality, all formal transformation programs must have an end. But really, change never ends, even transformation programs.
Organisations will (and must) continue to evolve to serve their market and their shareholders or constituents.
Nevertheless, there needs to be closure and a strong signal that the formal transformation program is over (and hopefully the organisation has reached its ‘Target State’).
During the program, the organisation will have experienced a myriad of changes and challenges, and ultimately have arrived at a destination that hopefully can be characterised as ‘Product-Led’.
As a Product Person, I can see no alternative. So I will continue to ask the questions:
-If we don’t enable our organisations to embed customer and business benefit in our products now, then, when?
-If we do nothing, then, what?