Transformed summary

So, first things first – what exactly is the product operating model? According to Marty Cagan, it’s a conceptual framework used by some of the world’s most successful companies.

Essentially, the product operating model puts technology first. The goal is to find solutions that work for both the customer and the company.

The product operating model isn’t one specific process, but rather a framework based on a set of principles. One example is the necessity of experimentation – we’ll look at some others shortly.

Changing to the product operating model is something that many businesses find challenging. One CEO compared the transition to gradually changing from driving on the right side of the road to the left. It’s a process that takes time, and without a clear roadmap, it can be tough.

But here’s the thing: change is often essential. To succeed – or even just survive – companies need to adapt. There are three major drivers that tend to motivate companies to switch to the product operating model. 

One is a competitive threat. For instance, at the moment generative AI is a disruptive technology. Companies feel forced to change in order to keep up with their competitors, or risk being left behind.

Alternatively, a prize might be the main motivating factor. Perhaps the company becomes aware of the financial rewards that are up for grabs, if they’re able to innovate and transform.

And finally, some companies choose the product operating model out of frustration. After investing so much in their technology, and ending up with such disappointing results, the company leader realizes that something needs to change.

Fundamentally, companies transform because they realize it’s necessary. If you’ve got this far, chances are your business could also benefit from the product operating model. In the following sections, we’ll go into more detail, so you know exactly where to start.

But before we do, one thing to keep in mind. In all of this, the role of the CEO is crucial. The CEO needs to be seen as an evangelist for the product model, actively helping and supporting these changes. Is your leadership on board?