Background
Many organizations struggle to unlock the full potential of their transformations. Some may have adopted new practices, yet the ultimate goal—where business value flows seamlessly—remains out of reach. As the business landscape evolves at an unprecedented pace, traditional control- and management systems often fail to keep up with shifting customer demands and market conditions we see today.
To remain competitive in this new landscape, organizations must embrace new ways of working that are adaptable, customer-centric, and value-driven. Over the years, different paradigms have emerged to address these challenges, with one of the most impactful shifts being the rise of Product-Led Organizations (PLO). In a PLO, the customer explores and owns its journey through interaction with the product that becomes the key enabler of value creation—attracting, engaging, and retaining customers while driving sustainable growth
Purpose and Scope
The purpose of this white paper is to explore the significance of Product-Led Organizations and their critical connection to Product-Led Growth (PLG). While PLG is well-documented as a go-to-market strategy, the broader concept of a Product-Led Organization is still taking shape. This paper bridges that gap by analyzing how organizations can build an effective operating model that minimizes lead-time by aligning strategy, structure, and execution around the product.
We will examine the WHY, WHAT, and HOW of becoming a Product-Led Organization. Offering insights into the fundamental shifts required, and the key challenges companies face during this transition to be able to stay competitive in a changing environment.
Key Challenges and Insights
Transitioning using a Product-Led approach is not without obstacles. Many organizations experience misalignment between strategy, execution, and financial steering, making it difficult to fully realize the benefits of a product-driven model. Common challenges include:
- Market disconnection, where the organization struggles to adapt to evolving customer needs and market dynamics. Not designed or optimized for the product.
- Organizational inertia, where component teams struggle to align around product-driven goals, causing a feature-factory state i.e. focus on output.
- Stagnation & Inefficient scaling, where the organization struggles to scale efficiently stuck with a fragmented product portfolio that drives cost and wastes resources.
- Innovation barriers caused by a rigid management system with e.g. reporting structures, slow decision-making and long lead times.
- Financial steering with rigid budgets and upfront planning, not enabling new knowledge to impact the plan, and measuring output as predictability.
By identifying these challenges and understanding the necessary shifts, organizations can create an environment where the product becomes the driving force—enabling teams to respond dynamically to customer needs, accelerate innovation, and drive long-term growth.
Strategic advantages
True success comes from dynamic steering, where decision-making revolves around real-time customer insights and product-led strategies. A well-implemented Product-Led model fosters:
- Strong Product Market Fit, The product meets real market needs and solves meaningful problems.
- Unified Focus on Outcomes, full alignment around the product, optimized for a customer-centric business model.
- Organic Growth The product itself is the primary driver of acquisition, retention and expansion while accelerating innovation.
- Adaptive & Learning Organization where insights from fast feedback drive innovation and development being able to adapt to market needs shortening lead-times.
- Dynamic Financial Steering, with continuous funding enabling market exploration and innovation, while high transparency enhances predictability
Turning Insights into Impact
Navigating the shift to a Product-Led approach requires more than just new models—it demands real-world applicability and integration. Our approach transforms insights into action through a structured, hands-on journey that aligns strategy, execution, and organizational design. By bridging the gap between theory and practice, we help organizations create a future-ready operating model that drives meaningful and lasting change.
Organizations that embrace such a model position themselves at the forefront of their industries, able to bridge the gap between customer needs and long-term business success to maximize the potential in the PLG strategy.
To fully grasp the transformative potential of a Product-Led Organization, we must first explore what it means to be Product-Led—how it differs from traditional business models and why it has become a critical success factor in today’s market.
Definition of Product-Led
In a Product-led organization, a product is more than just a solution—it’s an experience that customers love, rely on, and feel emotionally connected to. A great product seamlessly integrates into customers’ lives, solving real problems in a way that feels effortless and even delightful. It creates loyalty, drives engagement, and becomes something customers actively seek out, advocate for, and can’t imagine being without. Simply put, a product is something a customer chooses to buy because of the value it provides, where the benefits outweigh the efforts.
This contrasts with a traditional product definition, which often focuses on features, specifications, and delivery. In conventional organizations, products are typically viewed as discrete offerings built and launched through projects or business units. In a Product-led organization, however, the product is the core of the business—continuously evolving based on customer needs, usage data, and market feedback to drive both customer and business success.
The purpose of a Product-led organization is to center the entire business and strategy around customers and the actual products they truly value and love (rather than e.g. projects, functions, or business units) with the goal of driving growth, customer satisfaction, and both short- and long-term success. In such an organization, the product is the primary driver of customer acquisition, retention, and expansion, rather than relying heavily on traditional sales or marketing strategies. By creating a product that offers exceptional value, is easy to use, and meets customer needs, a Product-led organization generates organic growth through the product itself. Product-led organizations also gain advantages in continuous innovation by empowering product teams with full ownership to build, test and learn what gives the outcome they are looking for, unlike component teams with a more narrow output oriented scope.
Before we delve deeper into Product-Led Organizations, let us first reflect on other paradigm shifts and how they have influenced today’s organizations.
Challenges that influence most organizations today
Over the years, the world has experienced several paradigm shifts in organizations. The operating model in organizations is often not fully updated to align with the new paradigm organizations are aiming for. Imagine having a new phone with an old operating model that doesn’t enable you to utilize apps. What is the value of buying a new phone then? The same goes with your organization’s operating model.
An operating model defines how an organization creates and delivers value to its customers and stakeholders. It outlines the key components and processes needed to implement the business model and achieve the desired market position. To reach its wanted state, an organization must ensure that e.g. its financing, performance evaluation, reward systems, goals, talent management, leadership, decision-making, practices and views, sourcing, and partnerships are aligned.
Operating models vary between organizations and can be visualized or described in different ways. However, misalignment is common, and many operating models are not adapted to today’s evolving business paradigm.
Let us explore the different paradigms in depth to understand the root causes of the challenges organizations face today.
Each organizational paradigm has focused on different objectives depending on its purpose and external environment (SUSO – stable, understood, simple, obvious or VUCA – volatile, uncertain, complex, ambiguous). The paradigm we are referring to and the purpose of them is:
- Budget-Led: Optimize financial control and ensure cost efficiency according to plan.
- Process-Led: Streamline operations to improve efficiency and consistency
- Service-Led: Enhance customer satisfaction through superior service delivery
- Value-Led: Deliver maximum value to customers and stakeholders and align with core values.
- Product-Led: Drive growth and success by creating exceptional product experiences.
The problem is, that with this constant change, organizations have no alignment between different areas to have a consistent operating model – like the analogy with the new phone with an old operating system earlier. To regain alignment and build a cohesive operating model, organizations must rethink three fundamental aspects.
First, identify the products that customers truly love —these are not internal functions, projects, business models, services, tools, teams, or processes. Instead, products form the foundation of your organization’s go-to-market strategy (GTM).
Second, you need to understand the market in which you operate, to understand what is needed of you as a company. Is it to be budget-led in a stable environment with scarce changes, or product-led in a rapidly changing world, or something else?
Third, achieving alignment across different areas of your operating model is crucial. If key elements are rooted in different paradigms, it will create inconsistencies that weaken the organization’s ability to manage and steer effectively.
Using Dandy People Product-Led Organization Evaluation, one can assess where the organization resides in relation to these paradigms and identify potential misalignments (this White paper will explore this later on). Without coherence across these areas, leadership will struggle to establish a modern form of control—one built on transparency and empowerment. Without it, misalignment and confusion grow, undermining effective management and preventing the desired outcomes.
We should also take a look into the history of go-to-market, to give a deeper understanding of how Product-led growth and Product-led organizations need to be aligned in order to function effectively.
Go-to-Market Evolution: The Shift Toward Product-Led Growth
Traditionally, go-to-market strategies have been dominated by a sales-led approach, relying on outbound marketing, large sales teams, and high-touch interactions to drive revenue. However, as buyer behavior evolves, a fundamental shift is taking place—placing the customer and product at the center of acquisition, retention, and expansion.
In a Product-Led GTM strategy, users engage with the product firsthand—often through self-service models like freemium offerings, free trials, or seamless onboarding—before making a purchase decision. Instead of investing heavily in outbound sales, companies design intuitive products that encourage organic adoption, viral growth, and referrals. This shift also redefines lead qualification, moving from marketing-generated leads (MQLs) to Product-Qualified Leads (PQLs)—users who have already experienced meaningful value, making sales efforts more targeted and efficient.
Moreover, revenue generation transitions from one-time contracts to a continuous value-driven model. Users start small, experience success, and naturally expand their usage over time, fueling sustainable, long-term growth. By embracing Product-Led Growth, companies align their strategy with modern buyer expectations, creating a scalable, customer-centric approach to growth.
Why a shift in Go To Market Strategy matters
Sustained growth and relevance in today’s market are directly linked to the shift within GTM strategy, driving a new paradigm shift and fundamentally reshaping the way organizations must operate. As a result, organizations need to reconfigure their operating models to ensure alignment with their strategic ambitions. We have exemplified three key aspects that reinforces this:
- Modern buyers prefer self-service: A CMSWire study shows that 53% of B2B buyers prefer to purchase without interacting with sales at all.
- Lower customer acquisition cost (CAC): PLG reduces dependency on expensive sales activities by allowing the product to do the selling. Sales evolves working in closer collaboration with empowered product teams to leverage the expertise and necessary perspectives in a way that enhances customer acquisition and retention.
Faster growth with efficiency: Successful companies drive organic growth by allowing users to experience, engage, and feedback on the product with the impact of instant value. Examples include companies like Slack, Notion, and Figma, which scaled rapidly by leveraging user engagement and iterative improvement.
The Future of Go To Market is Product-Led
As businesses continue to adapt to this shift, successful GTM strategies will increasingly focus on removing friction, optimizing product onboarding, leveraging user data, and building seamless product experiences that drive adoption and expansion.
Companies that embrace PLG as their GTM engine will not only grow faster but also build stronger, more engaged customer bases—where users don’t just buy the product, they love using it.
Connecting Product-led growth and Product-led organizations:
Product-led growth (PLG) thrives in a Product-Led Organization because the product is continuously optimized based on user feedback and customer needs. In such an organization, cross-functional teams—from design to sales—work cohesively to enhance the product experience, making it more intuitive, scalable, and engaging. The foundation is built around prioritizing the product first, followed by architecture, ways of working, and organizational design. This alignment ensures that users can independently discover, adopt, and derive value from the product, ultimately driving sustainable growth.
A common misconception we’ve observed is that organizations aiming to become product-led often repackage with new definitions, roles, steering models etc. under a product label. True transformation isn’t about relabeling —it’s about fundamentally breaking down silos and recognizing that the product is the business. According to Edward Deming – 95% of performance comes from the system within your organization, while only 5% is driven by individuals. Every system has a peak velocity where further improvements hit a ceiling—at that point, real change requires a shift in your operating model.
In summary, PLG is the growth strategy, while the operating model enables and ensures that we can unlock the potential of PLG. A product-led organization is achieved when these two components work together seamlessly. The combination creates a powerful, customer-centric business model that fuels sustainable growth. They must go hand in hand. But how do we find the right balance?
Finding the Right Balance in a Product-Led Transition
In a transition it might be difficult to find the right balance when and to what extent a business model towards Product-Led is suitable. Product-led is suitable for when one or more applies:
- organizations operating in a Volatile, Uncertain, Complex, and Ambiguous (VUCA) environment, where market conditions and customer demands change rapidly.
- organizations or scenarios where the product itself can serve as the primary driver of growth, customer acquisition, retention, and value creation.
- organizational scenario when there is both a market need for rapid response and high potential for Product-Led Growth (PLG).
The need always determines which paradigm shift the organization must act within, given the ambition and market forces. If there is a stable environment, where cause and effect are obvious, change occurs rarely and are minor, then there isn’t a need to become product-led. However, an organization might still obtain customer satisfaction without transitioning to a product-led paradigm by offering superior service delivery like in a Service-led paradigm. Though, for most organizations today it is unstable, fast-paced change, and complex – cause and effect is not clear – with limited known factors and data that can be interpreted in many different ways.
In many large enterprises, purchasing decisions are tightly controlled by procurement processes, where compliance and security play a crucial role. In a B2B context, multiple approval layers hinder end users from interacting with the product and limit internal users from deciding whether to buy a product or not. This makes a Product-led approach more difficult to implement, as traditional enterprises are obliged to prioritize such processes over user-driven expansion.
Some organizations adopt a hybrid model, blending PLG with traditional sales to meet diverse customer needs. While this can offer flexibility in customer acquisition, it also poses risks—such as sales teams making promises that push development into reactive feature factory behaviors not knowing what solutions customers actually need. In this whitepaper, our focus is not to deep-dive into hybrid models but rather on creating a deeper understanding of what it truly means to be Product-Led.
PLG is built on the idea that users navigate their own journey, discovering value independently. While this concept is compelling, it also demands a high level of trust and confidence in the product’s ability to deliver. For some, fully embracing PLG is not the solution at hand – but it does not mean the approach is entirely out of reach. Instead, identifying small strategic steps to start experimenting in the right direction, exploring how elements of their current state could benefit from PLG principles to chart the pathway towards Product-led.
To successfully navigate change, organizations must understand paradigm shifts, their effects, and the intent behind them. Making informed decisions about when and how to evolve is key to staying competitive.
Are you facing any of these challenges?
Have you tried shifting to a Product-led organization? Have you tried, and not reached all the way or struggled to fully transition? Something is missing – but what? Maybe you are still facing some of these challenges? Recognizing the signs that indicate a need for change is essential. Let us explore some of these challenges, their consequences, and how organizations can take actionable steps to move forward.
Market disconnection
Innovation and quick market adaption is important for a product-led organization. Fast adaptation is crucial as well as not missing out the window of opportunity.
Challenges & Consequences:
- Long decision-making paths, no innovation and difficulty to quickly adapt to the customer’s needs.
- Business and Tech functions may operate in isolation as well as sales and marketing, slowing down speed, decision making and collaboration.
- Complex processes, dependencies, roles, and mis-communication between functions lead to delays, errors and friction and extra roles to handle alignment and communications.
- Rigid structures hinder the ability to adapt, leaving the organisation at risk of lagging behind competitors and lost opportunities.
- Roadmaps are aligned around outputs, a barrier to achieving true product excellence.
- Component teams are only responsible for parts of the product not seeing the whole and not being able to innovate. The organization becomes a feature factory – a major challenge for product organizations.
Approach: Create real product teams with business responsibility to be able to innovate and go faster to market while removing dependencies.
Organizational inertia
Organizations often struggle to create alignment around evolving customer needs and market dynamics, not optimized for a customer-centric business model with the product in focus. Having a clear North Star is more important than ever (no, it’s not just a metric framework). It aligns focus, empowers individuals and teams and serves as a compass —ensuring the company delivers what matters most to customers while scaling efficiently.
Challenge & Consequences:
- Many organizations struggle to align their component teams around a common goal, due to siloed departments and conflicting priorities.
- Goals fragmented across departments. Disconnected goals where strategy and execution are misaligned, leaving teams with unclear direction, mission and strategic alignment on where to focus their efforts.
- Strategy and operation are too far from each other creating misalignment around important strategic goals.
- Ensuring right decisions and priorities based on a consolidated view of all products and teams.
Approach: A product-led approach centers the organization around customers and products, creating a unified focus. Cross-functional product teams can collaborate more effectively around a North Star and team missions. A North Star provides a shared focus that aligns all teams around delivering the most value to customers and driving sustainable growth by sharing the same metric. Bridging the gap between strategy and operations—where misalignment hinders effective prioritization and decision-making—requires a tactical approach that consolidates perspectives and ensures alignment across all levels.
Product Market Fit
Fast feedback and insights are crucial for organizations adapting to market needs and reducing lead times, with feedback loops – ranging from customer and internal insights to product performance, market finance, architecture, tech health, security, compliance, and management – driving continuous optimization and agility. They create a structured flow of information between product teams and management back and forth, with overlapping perspectives ensuring products are usable, valuable and feasible. Actively leveraging feedback loops allows the organization to refine strategies, enhance business models, and drive innovation. This ongoing adaptation ensures products remain relevant and competitive throughout quick market shifts and changes in customer needs.
Challenges & Consequences:
- By not systematically collecting and processing feedback the organization encounters challenges to continuously adjust its strategies and improve products, processes and ways-of-working as well as business models.
- Lack of insights from different types of feedback loops slows down innovation and development.
- Lack of clarity on how to sustain the system by effectively gathering and utilizing different types of feedback, ensuring clear responsibilities and execution to bridge strategy with operations
Approach: Focus on creating a learning and adaptive organization, where continuous experiments and insights drive innovation and development as well as optimizing for flow. External, as well as Internal feedback loops are important and constitute a continuous cycle of learning, adjustment and optimization that supports a Product-led organization.
Financial Steering
In a Product-led organization, financial steering shifts focus from traditional cost centers and departmental budgets to emphasizing the performance, growth, and profitability of products. Financial management is integrated directly into the product lifecycle, ensuring alignment between investment decisions and the value created for customers. Resources are allocated by product or product line priorities.
Challenges & Consequences in today’s organizations:
- Investments are prioritized based on expected financial results, which makes it nearly impossible to pursue new products and unknown solutions. This leads to organizations trying to control innovation by limiting it to who, how and when, or isolating innovation in a function with no resources to launch what they develop. This will not lead to growth.
- Rigid budgets and up-front planning, where teams are allocated and funded based on predetermined initiatives. However, when the market shifts and resources are tied to pre-approved initiatives, it becomes challenging to pivot – such as discontinuing one product in favor of another.
- Ignoring financial scenarios in the business model, leads to uninformed strategies and missed opportunities.
Approach: Focus on continuous funding related to products where dynamic prioritization is separated from fixed costs. Financial control is eased for highly innovative products not just as a start, but until stable/reached maturity. Apply financial scenarios to the business model in order to inform strategies and find opportunities.
Observation
Most of the executives and change leaders in the market that we talk with, recognize the core challenges – they struggle with alignment, innovation, market feedback, and financial steering. Many of our customers struggle to focus on the key areas needed for success, often after multiple unsuccessful attempts. A common road to failure is targeting the symptoms, unaware of the actual root causes.
Targeting root causes involves a necessary shift in the operating model, including how customer demands and market supply are addressed. Tackling these issues in the wrong way is often politically sensitive, costly, and complex, with resistance to change as a common barrier. Change will drain trust, political capital, and investments leaving you with a sense of hollowness and ineffectiveness without minimal results.
Demonstrating impact – A Cohesive and Practical Path with a Product-Led approach
Today, countless models and frameworks exist, but they often lack integration and real-world applicability. Our approach bridges this gap by connecting the most relevant elements into a cohesive, practical program that drives meaningful change.
To support companies in the transformation process, we’ve developed a 6-month program, designed to ensure a future-ready system and structure i.e. operating model aligned with desired organizational goals and market environment. Our program is designed to address these issues head-on and guide organizations and individuals through a series of workshops, seminars, and training sessions. These are constructed to engage C-suites, leadership teams, and employees in a structured, hands-on transformation journey, moving step by step toward one organizational vision. Organizational context and ambition shape the transformation journey ensuring confidence that every step delivers tangible value before any major commitment or investments. This is a continuous process based on emerging needs
From Insight to Action
Our program stands out by ensuring that insights are not just discussed but actively executed – both during and between sessions – through experienced-based learning, interactive games, relevant theory, and real-world examples. A key part of this is the Dandy People Product-Led Evaluation Model, which helps assess the current state across various dimensions. This often reveals that different areas within an organization operate at varying stages of paradigms. In two days, our Dandy People Product-Led Business Simulation brings these insights to life, demonstrating the impact of different paradigms on business outcomes. You’ll experience firsthand how your decisions shape key results and strategic parameters such as customer retention, market shares, and employee satisfaction.
Key Deliverables and outcomes provided in the 6-month program
- Unified C-suite and leadership teams Perspective: C-suite and leadership teams will gain a deep, shared understanding of core pain points and actionable steps to drive progress.
- Collaborative Organizational Design: Co-create with Dandy, to develop new organizational structures, by blending hands-on training, proven theories, and insights from successful product organizations – supporting sustainable change for the future. Discover what type of teams you will need to get Product-led.
- High-Level Change Roadmap: Jointly develop a practical roadmap initiating change with a clear view of the key milestones ahead, grounded in proven change management experiences.
- Strategic Alignment: Initiate a strategic North star with a metric framework that supports your business..
- Contextual Learning: Each workshop is designed to help apply new insights directly to the organization’s context, enabling practical, immediate progress.
- In-Depth Analysis and Goal Setting: Facilitate meaningful discussions to clarify aspirations and evaluate readiness for change, ensuring alignment and focus.
- Widespread Engagement: Foster enthusiasm and commitment through experience-based training across levels, creating a momentum for resilience and real results.
- Shared Language and Understanding: Establish a unified language and collective understanding throughout the organization, minimizing misconceptions and friction, breaking down silos and fostering collaboration for future conditions.
- Strategic Alignment with Tactical Efficiency: Equip C-level and leadership teams with a structured, efficient process for integrating strategy into day-to-day operations.
- Hands-on practice and new ways of working in a product-led organization.
Our program unites everyone—from top leadership to team members and stakeholders—fostering shared understanding and commitment to transformation. To ensure a smooth and fast transition, multiple events and activities run in parallel – such as workshops and hands-on sessions – where insights are turned into action, obstacles are proactively removed, and PLG is aligned with a Product-led organization. All within a six-month timeframe.
Final note and recommendation
Alignment between PLG and Product-led organizations creates a synergistic effect where the organization is fully optimized for product-driven growth. That leads to a more customer-centric business model, accelerated innovation, enhanced collaboration, and a driver of sustainable scalable growth with a clear focus on delivering value through the product itself. This is a powerful driver of long-term success in today’s fast-paced, competitive market.
Discover how a product-led approach can transform your organization. Schedule a free consultation with our experts to uncover what your needs are – you can take your first step today! 👉
References and sources
- Dandy People
- The 2025 State of Product Management Annual Report – 10th Edition, Product Plan
- The 2024 State of Product Management Annual Report – Data-Backed Insights Into How Product Professionals Make Smarter Decisions and Deliver on Product Vision and Strategy, Product Plan
- CMSWIRE, Jason Ball, Aug 2022
- 2022 Product Benchmark, Open View Partners
- What is product-led growth, PLG Collective
- According to 2022 Product Benchmark
