Breaking the endless project-based development cycle
3 principles for an effective transformation to the Product Operating Model.
For this newsletter, I'm diving into something that keeps many product leaders up at night (and it should): true organizational transformation.
Q2 is well underway, and if you're like many leaders, you're asking: "How do I move my team from project-based order takers to value-creating empowered teams?" It’s a tough shift but also one of the highest-leverage investments a company can make. When done well, it enables teams to solve meaningful customer problems in ways customers would choose to use it while enabling real business results.
Despite the clear value, there’s so much confusion around how to actually pull it off. Don't get me wrong — I am by no means saying this is easy. In fact, it may be the hardest thing you’ll do as a leader. But when you get it right, you create an organization that can achieve what no one thought possible.
We can’t cover everything needed for a successful transformation in a single newsletter. So we’ll start with the 3 essential principles that help a transformation take root. I’ll walk you through each one, along with a real-world case study to ground it in reality and (hopefully) spark some momentum.
Context: The Palace Company story
The Palace Company, a luxury hotel chain with 15,000 employees across seven countries, offers a compelling transformation case study. Like many organizations, they understood that technology was critical to their future but struggled to implement it effectively.
Their starting point will sound familiar to many of you:
A technology department with hundreds of developers but no product managers, designers, or tech leads
Little to no user or business value created despite shipping numerous features and “finishing” projects
Requirements flowing top-down as projects with unrealistic deadlines
No product vision or strategy to guide decision-making
Projects routinely running over schedule and accumulating technical debt
Low team morale as developers juggled competing priorities
What’s especially interesting is that Palace had already made a significant investment in technology. The four brothers who ran the company had given their IT director full freedom to make the best decisions for the business. The intent and the investment were real, but the approach was fundamentally flawed.
Principle #1: Start where you actually are, not where you wish you were.
The Palace Company’s first attempt at transformation mirrors what I see across industries: implementing "agile" processes without changing the underlying operating model. This is the beginning of why most transformations fail.
They, like many others, hired a director from a software factory who brought in:
Product owners reporting to different functional areas to "translate" requirements
Project managers focused on timelines rather than value
Scrum ceremonies without a true agile mindset
Siloed teams
Designers working in an agency model
A complex web of handoffs and approvals
This created "fake agile with a big waterfall behind it." It gave the illusion of progress without delivering real results. The technology team became further entrenched as order-takers, focused on delivering features dictated by the loudest voice in the room.
A year into this “transformation,” things were actually worse than before. Stakeholder patience had worn thin after months of overpromising and under-delivering.
This is where many transformation efforts stall — frustrated stakeholders, demoralized teams, and a quiet slide back to business as usual.
When I began working with them, I sat down with the then VP of IT and told him the truth. We weren’t starting from zero. We were starting from minus one hundred. And if this were going to work, we’d need commitment and visible results. That conversation shaped everything that followed.
The lesson here is simple: most transformations don’t begin at zero. They start from a place of uncertainty, low trust, and mounting pressure.
That’s why I start every transformation with an organizational assessment. It lays out exactly how the company is performing across critical dimensions and sets the foundation for where we go next.
Principle #2: Commit beyond lip service
Every company I speak with is deeply interested in transformation — especially the outcomes that come with it. Business success, inspired teams, and standout products that unlock new opportunities are just a few of the goals I hear about. But to get there, a company has to be willing to fundamentally change.
This reality hit The Palace Company hard, as it does in every transformation engagement I have ever done.
Before this was fully understood, the youngest brother, Anuar, stepped in as VP of IT. He had no prior experience in technology but was determined to solve the problem. His early approach was familiar: get certified in agile, attend a development boot camp, and focus on clearing the project backlog as fast as possible.
But he quickly discovered the real issue wasn’t speed. It was that what they were delivering didn’t work for users or the business.
His breakthrough came after reading product literature and attending an SVPG workshop. He realized Palace needed a complete shift to the Product Operating Model, even though they weren’t a traditional tech company. Instead of launching a sweeping reorganization, he took the time to educate himself, brought me in as a coach, and became the lead advocate for a new way of working.
His answer was clear when asked what his backup plan was if the transformation failed: "There's no plan B — this is it." That mindset is what separates successful transformations from stalled initiatives.
Principle 3: Pilot for credibility, not just proof
Small teams, real problems, big results—that’s the promise behind one of my favorite first steps in any transformation effort. Instead of pushing for a company-wide reorganization, I advocate for starting with a strong pilot team. The success of the broader transformation is directly tied to the pilot’s success. This team isn’t just proving the method—it’s building credibility for the entire approach.
I call this team our “poster child,” which is why I always push to staff it with the strongest players and coach them directly.
In Palace’s case, I asked Anuar for his best product manager, designer, and engineers. He didn’t yet have a product manager, but once we discussed the key traits, he had someone in mind, and he turned out to be awesome. This team’s mission was to show what happens when an empowered, collaborative product team is given real customer problems to solve and business results to achieve.
The pilot team is, not to sound too dramatic, a ticking time bomb. Stakeholders are usually already frustrated and expecting fast results. That’s why choosing the right people, the right problem space, and tightly scoping the MVP are all critical.
This pilot team achieved several firsts:
Ran Palace’s first-ever user research sessions
Invalidated an idea that would have cost hundreds of thousands of dollars
Built features that increased conversion by 40 percent
This approach had two powerful effects:
It delivered tangible business results, which earned credibility with skeptical stakeholders and gave us momentum through real wins
It created FOMO among other teams who saw a better way of working
I know a pilot team is working when two things happen. From the top down, we see a shift from skepticism to cautious appreciation. From the bottom up, teams start asking how they can work this way, too. At Palace, we saw both.
Reflecting on my role as their coach during a transformation, I realized that the most important thing I did early on was build trust—not just with the then-VP of IT but also with stakeholders and the team. When we kicked off the engagement, I spent a whole week at their offices in Mérida, Mexico, with the sole intent of understanding the landscape and building trust.
Many people want to jump straight into the work and overlook a simple truth: Real progress doesn’t happen without trust. Looking back, I know that early investment is what set the foundation for everything that came after.
Excellent insight.