Innowaring is the Way

A Principles-First Approach to AI-Native Product Innovation

I wrote Becoming a Software Company (BASC) to outline a set of principles for thinking and operating like a software company. In an era where every company needed to become a tech company, the book addressed how organizations can improve at building software-intensive products and systems. The intended audience was technology leaders and teams aiming to model their technology work after leading software tech companies.

The BASC principles are designed to create an organizational mindset for operating like a software tech company. These principles are grouped into three key themes, as below:

Fig.1 The Principles for Becoming a Software Company (BASC)

Since publishing my book in June 2023, two key developments prompted me to start Innowaring Labs. First, the Product Operating Model (POM) gained traction as a structured framework for organizations seeking to operate like software companies, complementing the BASC principles with a concrete approach to change management. Second, Gen-AI has significantly intensified the need for companies to rethink their operating models, demanding even deeper shifts than those driven by cloud and mobile.

From BASC to POM and Learning from the Best

Whenever I discussed or presented the BASC principles to anyone in the industry, the feedback was: “We agree with your ideas, and we recognize the problems you point out. But it is a huge change management issue. How do we even begin?”

While looking for an answer, I discovered the product operating model concept. POM isn’t just for software tech companies. It applies to any company that must leverage software tech to accelerate its business. Its core thesis is to align organizational structures, processes, and cultures around delivering customer-centered value through empowered, cross-functional teams.

No one else has done better work than Marty Cagan and the Silicon Valley Product Group(SVPG) in defining the POM as a structured framework. In their latest book, Transformed, Marty and his coauthors have abstracted a set of principles for a POM.

Fig.2 SVPG’s Product Model First Principles

When I mapped the BASC principles (and related concepts) to SVPG’s POM, I discovered an almost complete alignment (see Fig. 3 below).

Fig.3 Mapping BASC Principle to SVPG’s Product Model First Principles

I must acknowledge that SVPG’s principles, as drafted, offer a clearer framework for optimizing an operating model. This is partly because operating model transformation wasn’t the primary focus of BASC but also because of who Marty and the SVPG team are—their contributions and insights have profoundly shaped how modern product teams operate in tech companies. I’m grateful for the opportunity to learn from their work and adopt SVPG’s product model principles as a foundation for my work with Innowaring Labs.

AI-Native Innovation can’t happen without Operating Model Evolution

While the cloud era created the initial imperative for organizations to get better at building their own software products and systems, Gen-AI has put that imperative on steroids. It enables a new kind of AI-native software products and systems. But building these products requires an even deeper shift in operating models than that was needed for cloud and mobile.

For example, the Cloud era prompted organizations to shift from waterfall to agile development approaches to create customer-centered value. While many organizations have implemented agile development methodologies, most still struggle to achieve true business agility. AI is only going to amplify that struggle.

Similarly, organizations have adopted product models. But in reality, their teams operate less like true product teams and more like feature delivery teams. They can never achieve the real cross-functional collaboration required for product innovation. The AI era will exacerbate these types of operating model challenges.

AI-era innovation requires going from “documentation-first” to “prototype-first” development. That means the cycle to understand the customer problem, prioritize the correct problems, and facilitate the right solutions can be dramatically shortened. But “prototype-first” approaches can be manifested in the right way only in high-trust organization cultures.

Building AI-native products and systems isn’t just about adopting new technologies—it requires a fundamental shift in how organizations structure teams and how teams think, work, and build. This is so important that I have decided to focus all of my work with Innowaring Labs on the evolution of operating models for product and system innovation.

Innowaring: A Principles-First Approach to Products and Systems Innovation

I coined the term Innowaring from the phrase “building innovative software” to represent a principles-first approach to tech products and systems innovation in AI Era—one that drives real business growth. Rooted in the BASC principles and powered by SVPG’s Product Operating Model (POM), Innowaring provides a structured yet adaptable way for organizations to accelerate their business by building the right software products and systems.