$1.8 trillion was spent on transformation programs in 2021. Digital transformation alone does not deliver the expected return on investment. The evidence shows that Product-Led organizations yield better financial results. LTP DIGITAL 2022 | USA is all about how to become one of those organizations.
“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.
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 organization, 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 organization, as well as to customers.Product-Led Transformation builds on the Digital Transformation mindset, but provides additional capacity and tools to convince an organization’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.”
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 2022 | USA 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 organization 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 you take action from the definitive market signals that require the organisation to transform its current way of operating? What’s the journey to becoming a Product-Led organization?
Transformation is a necessary process in all organizations because technology and marketplaces are moving at an ever-increasing pace. It is no surprise that organizations 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 organization 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 galvanize the organization with a convincing purpose for the necessary changes.
What does success look like? How do organizations that are “Product-Led” operate?
Before embarking on a Product-Led Transformation, we need to know what success looks like.
What are we striving to achieve in our ‘Target State’?
We can fast-track our knowledge here by studying how organizations that are already product-led operate.
How do they structure their teams? How do they work to align all functions around a common way of making decisions? What “Tactics” do they use?
How can you craft a timeline for a Product-Led Transformation with achievable milestones to 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 energized.
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 you assess whether we have the capability to deliver on the promise of transformation and identify and recruit the right people with the skills we lack?
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 organization.
But you can’t transform without people.
Technology is the enabler that provides people with the tools to transform organizations.
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 tell if you are on-track or off-track in your transformation journey? What are the common pittfalls where it can go wrong?
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 organizations. The aim should be to help key stakeholders in your organization to have realistic expectations about transformation and the process of transforming.
The old adage ‘stand on the shoulders of giants’ really applies when the organization 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 navigate the transitional period with your 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 organization 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 organization towards its Target State, and to maintain alignment.
What are the hard truths you need to hear that can spell the difference between failure and success in a Product-Led Transformation?