1. Digital Transformation
  2. Product

Digital Transformation through Projects to Products

If software is eating the world, then it’s no surprise that many organizations are on a digital transformation journey. Successful transformations often mean more than digitizing processes, or moving to the cloud.  They shift ways of working, and create new mindsets.  The traditional project focus on outputs like delivery milestones or deliverables are no longer viable measures of success.  A focus on outputs while ignoring the outcomes you set out to achieve is invariably the tale of many failed transformations.

The book Outcomes over Output defines an outcome as “a change in human behaviour”, which applied to a product mindset, helps us think about customer outcomes and measuring those changes in customer behavior is therefore a key KPI in measuring success.

Characteristics of Projects

Many organizations get so tied down in the busy work of projects, managing the outputs, that they forget about the actual outcomes they want to achieve. You’ll notice that projects typically have a similar characteristics:

  • Normally funded based on benefits projected in a business case.
  • Organized in temporary teams that have durable reporting times. This team is usually considered “fungible.”
  • Organized around phases – analysis, design, implementation, etc.
  • Usually used to build or enhance some system or application and then move on.

Project management is the oversight of projects. It’s based on processes, tools, governance, and compliance.  It attempts to create order and predictability, typically working with fixed budgets, fixed start and end dates and organized handoffs between phases.

Actually these are very sensible ways to handle things that have clear goals and have predictable solutions that we know will work. But when you’re transforming to digital products, the reality is less predictable, and you’re on a journey that is never really done.  Project management methodology becomes less suited.

In a product mindset world, teams don’t work on a project; they own a product from concept to sun setting.

So what is a Digital Product?

I like to frame the answer to this question as Digital Product is the sum of customer, business, and technology. You can think of it like a mathematical equation:

Digital Product = Customer x Business x Technology

Product management is ultimately about managing risk around these components. When you think about a customer, think about what their unmet needs are, what outcomes they want. What problem are you solving for the customer and how can you succeed in making it desirable?  What you’re doing is address desirability risk. 

From a business point of view, we think about viability. What does this solve for the business? How do we create revenue and sustainable value for the stakeholders in the business?  The synthesis of these questions help us understand the viability risk.

When it comes to technology, this is focusing us around the feasibility risk. What’s the role of technology in solving these problems?  Do we have the team and technology stack capable of building what we need?  Do we have enough with the time?   

When you combine all three of these together, we can assess the value. What is the value we’re creating? And what is the risk around achieving that value? 

Build the Right Product, and Build the Product Right

There are two sides to the product coin:

  • Side 1: How do you build the right product?
  • Side 2: How do you build the product right?

Side 1 of the coin is all about product discovery and assessing the risks above. You must discover, in detail, what the customer’s various unmet needs are and the solutions you can use to meet them. With side 2, the focus is on product delivery. You must find a way to deliver fast through a scalable implementation that customers and stakeholders can depend on for consistently reliable value. 

Building a Product Team

Making the shift from project to product is about developing a product mindset, that really is about new way of working. It is a way of funding and organizing product development teams that is very different from the traditional project methodology.

One of the big challenges of going from project to product is identifying and building a cross functional product team that takes you from discovery to delivery. Here are some things to focus on:

  • Creating one team that’s responsible for discovery and design.
  • Product teams that work collaboratively to solve problems.
  • Continuous discovery with discovery and delivery in parallel and ongoing
  • In discovery, the team is tackling the big risks of product development.
  • The team measures itself against business results and customer outcomes. 

Creating a Product Centric Organization

When you create a product centric organization, there are a number of parts of your organization that are going to look and feel different from project centric organizations, including an emphasis on:

  • Difference of software development setup and archetypical project way
  • Allowing teams to reorient quickly
  • Use durable idea-build-run teams
  • Reduce end-to-end cycle time and time to value
  • Allow teams to reorient quickly
  • Validate actual benefits by using short-cycle iterations
  • Maintain the architectural integrity of software

Comparing the Attributes of Projects vs. Products

The best way to understand the difference between projects and products is by juxtaposing them against one another and comparing various attributes. Here’s a quick look at the attributes of projects versus the attributes of products:

ProjectsProducts
Project funding based on time and resources vsA team gets funded with checkpoints along the way
Work start/stops on datevsOngoing until sunset
Plan is the focusvsOutcomes are the focus
Change avoidancevsChange embraced
VariancevsValue

Considerations for Embracing Product Centric Mentality

As you try to shift an organization that’s heavily entrenched in a project centric mentality and get to a value-based product mindset, these are some of the things you’ll find yourself thinking about:

  • Decision rights: How do you empower a team to make decisions without the cascading chain of command that you typically find around products?
  • Financing: Rather than focusing on a specific budget, you think about the value that you think the product can generate. It’s a totally different mindset. And even if you can get yourself into this frame of mind, it requires convincing the ones that set the budgets.
  • Organization: Once you move to a durable team that’s ideating, building, and running, the rest of the company doesn’t quite know what to make of it. How this team interplays with the wider organization is a big consideration. 
  • Ways of working: While it’s not exactly “agile” working, it certainly has some of these elements. Greater flexibility is a must. 
  • Talent: You need particular types of employees to make this work. 
  • Toolchain: You need the right tools in place to ensure efficiency, automation, and acceleration of time-to-value. 

Transitioning to a Product Mentality

The shift from project mentality to product mentality is a big one. It requires good communication on your part and a willingness for the larger organization to embrace this new mindset. It’s not something that will happen overnight as a silver bullet. A good way to approach it is to find a line of business or product opportunity that is discrete enough that you can begin with a small team, without need to transform the whole organization.

When advocating for this shift, you want to focus on improving time to value. If you can prove that a product focused approach will generate more value for the organization quicker, it’s a lot easier to get buy-in. If you fail to measure the value and properly communicate it, you can face a serious uphill battle.

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