The Next Turning Point – Shifting from Projects to Product Thinking

While many leaders often think of agile software development as solely an IT function, they overlook the fact that the business-critical roles played by other parts of the organization should be included.  As the current pandemic continues to shape a new norm of remote work on a global scale, we must embrace the next shift: how organizations, both public and private, think about their work.  

The mind shift from project thinking to product thinking requires the involvement of both business and IT.  There are four key areas to consider:

1. Value Stream - Value is impeded by both process inefficiencies resulting in waste and a lack of timely decision making.  Organizations need to think in terms of “value streams” driven by collaboration to improve economic prioritization, accelerate delivery, and, most importantly, be able to respond to change.
2. Products – Projects are temporary – the cost of starting, building teams, knowledge gathering, delivery are all expenses whose value evaporates once the project is done.  Products are long-lasting, the team is funded, and an evolving roadmap aligns product to business strategy.  When organizations unify the products and people in a structure which reflects the value to which they align, you have a Value Stream.
3. People – Projects move people to where the work is and often has them working across multiple but separate bodies of work.  This splits concentration and imposes the hidden economic tax of context switching.  Focusing the people on a dedicated team aligned to business capabilities, i.e. products, creates an environment where responding to change, delivering value frequently and not just failing fast, but failing cheap is paramount.  
4. Leading – Many organizations struggle with layers of the organization being overly transactional. Successful change demands a pivot in line management behavior. This means while management is transactional focused; doing things right, leadership must be transformational focused; doing the right things. Organizations need to find the right balance between the two aspects because they are both important.

Organizations shifting to a product-oriented approach will have the flexibility, speed, and decision-making skills to thrive. They will rely on planning and budgeting to empower agile teams to base their work on customer value enhanced with faster and more accurate decision making rather than predetermined project deliverables. Project-oriented funding models are short sighted and lead to gaps in business value and team effectiveness. A shift to product-oriented thinking sustains the value and improves the effectiveness of the organization as a whole.