Transforming a Product Organization: Why Tension is a Sign of Progress
The “transforming” stage of shifting to a Product Operating Model is when you’re finally moving from planning into practice, and it’s the widest gulf to cross. In fact, when you hear experts in our field say that 70% of transformations fail, this is when it typically happens.
Earlier stages can be traversed in shorter periods and with fewer pitfalls. They don’t require the whole org to be on board.
The transforming stage, however, is where the rubber meets the road. It’s where practice, experimentation, and standardization need to be implemented. It’s also when most people get discouraged by underlying tension, friction, and growing pains.
I know this part of the process is uncomfortable, but it’s also a signal that something is working. This is what I like to call the strain of change.
Leaders see uneven speed. Teams push against legacy structures. The old governance model cracks under new ways of working. It’s messy, and it’s visible.
My goal today is to help you interpret this friction correctly, navigate the tension deliberately, and convert early signs of strain into durable momentum.
Because what feels chaotic in this stage is often progress in disguise.
Leadership: When Friction Enters the Executive Room
Transformation becomes real at the leadership layer first, and it rarely happens uniformly.
Some leaders begin orienting around outcomes. Others cling to outputs. Some lean into experimentation. Others default to certainty.
This usually leads to tension, but the friction is part of growing pains.
When it comes to the Leadership dimension of the transformation stage, progress looks like:
Positioning outcomes over outputs in strategy conversations. Certain leaders will be getting more comfortable with experimentation while others stay stuck on outputs-based thinking. This may lead to tension and hard conversations. It’s uncomfortable, but it’s a sign of progress as long as you can address it and adapt.
Visible unevenness in speed, where certain parts of the organization are clearly moving faster due to product-oriented ways of working. You can’t expect everything to take off all at once, so look for early instances around the org that prove the model is working.
C-suite or ELT conversations openly address performance discrepancies rather than ignoring them. That means you’re probably seeing healthy tensions in leadership meetings, with debates about value, experimentation, and customer impact.
When your executives begin asking why one team is unlocking speed, and another isn’t, or when they start asking, “What are we trying to learn?” instead of “When will it ship?,” you know you’re on the right track.
Ecosystems: Collaboration Before It’s Comfortable
During the transformation stage, silos don’t disappear overnight. Pilots that once felt isolated begin to expand. And because modern organizations are deeply interconnected systems, that expansion starts impacting adjacent teams. Like pulling a thread on a sweater, every team becomes impacted even if they’re not fully in the model yet.
When it comes to the Ecosystem dimension of the transformation stage, progress looks like:
Functional silos begin to break down. Teams start to work according to experience, not org structure. A product taxonomy takes shape, clarifying ownership based on outcomes rather than titles.
Cross-team collaboration emerges, even if it’s messy and inefficient at first. This leads to a growing cross-functional team culture independent of the formal org chart.
Teams organize around customer experiences instead of reporting lines. As pilots scale, collaboration compounds. It’s less about who they report to and more about who they collaborate with to get the work done.
Progress here means work is now being centered on customer value and teams are engaging in all manner of collaboration to deliver on outcomes.
Talent: Protecting the Old Ways vs Prioritizing Acceleration
This stage is often the first moment an organization confronts the reality that modern product work requires different capabilities and different mindsets. Skill set alone isn’t enough.
You need people who understand operating models, thrive in ambiguity, and are comfortable with autonomy and accountability.
This is when the hiring strategy becomes a key determinant of how the rest of this phase progresses (or stalls).
When it comes to the Talent dimension of the transformation stage, progress looks like:
Hiring for mindset as much as skill set. Talent needs to represent folks with deep industry/domain expertise and outside product experience. You need a healthy blend of both, with at least 50% of roles filled by individuals who have operated in modern product environments. That’s how you buy the acceleration of adoption.
Increased autonomy, including the ability for teams to say “no” to misaligned requests. This empowered execution demonstrates that teams know what’s in their product definition and what's outside of it.
A noticeable shift from task execution to outcome ownership. This is an indicator that your teams are really grasping customer outcomes as the ultimate objective.
This is often the inflection point at which organizations must choose between protecting legacy comfort and importing the perspectives required to move forward. You have to pick a path for how you’re going to hire—it’s how you buy the acceleration of adoption.
Standards & Practices: Finding the Sweet Spot Without Overcorrecting
As collaboration increases and autonomy grows, anxiety tends to rise. This is the point where I see so many executives revert to legacy ways of working, trying to stabilize the system through heavier governance. And that’s when things derail.
Overcorrection suffocates momentum. This is when I like to reassure clients that it’s okay to relax into the non-linear process a bit. It’s actually a good sign! Your teams are feeling themselves and figuring it out. This is a calibration window and, ultimately, an interim state.
When it comes to the Standards & Practices dimension of the transformation stage, progress looks like:
Implementing lightweight governance models that support alignment without stifling autonomy and learning. And resisting the urge to revert to legacy stage gates in moments of uncertainty.
Creating mechanisms for knowledge sharing that don’t require bureaucratic approval cycles. Test the process the same way you test a product so that you don’t kill collaboration.
Introduce value measurement early, even if metrics are directional or imperfect. This will help your teams build the muscle to measure impact from day one rather than deferring it to later stages.
Progress here means giving teams enough scaffolding to succeed without weighing them down with too much process. And, most critically, it means anchoring everything in value.
If teams are not learning to measure impact now, they will struggle to justify autonomy later.
The Truth About Winning in Transformation
Transformation is not tidy. It feels uneven and tense. It surfaces capability gaps and leadership misalignment.
But those signals are not proof of failure. They are proof that the system is moving in the right direction.
Winning in this stage is about creating new ways of working and building momentum. You see it when:
Leaders debate outcomes instead of outputs
Teams collaborate across boundaries by necessity
Talent is hired for expertise and product fluency
Governance supports rather than suppresses experimentation
Value measurement becomes habitual
If you can cross this canyon—if you can institutionalize experimentation, normalize friction, calibrate governance, and build outcome ownership—then scaling is no longer aspirational. It’s the natural next step.