Why do the best digital initiatives flag six months in? Because too many organisations still fund an idea as a finite project rather than as an ongoing product. The result is predictable: teams stop learning, ownership evaporates, and the business ends up buying yet another maintenance contract.
Why project-based funding chokes product-led organisations
Project budgets are designed for one-off deliverables: scope, milestones, a final handover. That fits construction contracts, not digital products which require continuous learning, iteration and support. When funding is tied to a delivery date, the incentives reward shipping features over discovering outcomes. The consequence is a brittle cycle of “deliver, handover, move on” — and a growing pile of half-realised value.
Symptoms you’ll recognise:
- Roadmaps that read like feature laundry lists rather than problem statements.
- Teams disbanded after launch, with no accountability for outcomes.
- Repeated re-platforming or rewrite projects to regain momentum.
What funding products really means (and why it works)
Funding products means providing sustained investment to durable, cross-functional teams whose performance is measured by outcomes — not output. It’s the core of the product operating model advocated by thought leaders such as the Silicon Valley Product Group and reflected in software industry critique like Martin Fowler’s Products Over Projects.
Key characteristics of product funding:
- Continuous capacity: teams keep responsibility for a product area, allowing knowledge to accumulate.
- Outcome-based KPIs: investment is reviewed against business and customer outcomes rather than feature count.
- Flexible allocation: budgets move to where learning shows most value, not to a fixed scope agreed up front.
Practical steps to move from projects to products
Transitioning funding models is organisational change, not an IT tweak. Here are concrete steps leaders can start with.
1. Define products as business outcomes
Translate “projects” into persistent product domains with clear outcomes. Use metrics that matter: revenue uplift, retention, time-to-value, or task completion rates. Tie a product’s budget to those outcomes and review quarterly.
2. Fund capacity, not scope
Move to a capacity or team-based budget that funds a cross-functional team’s people and tooling for a period (e.g. a year). This gives teams the runway to experiment and iterate.
3. Establish lightweight governance
Funding must still be accountable. Replace heavyweight stage-gates with short strategic reviews that focus on learning. ThoughtWorks has described this shift well in their guide to funding agility.
4. Run small bets under a sustained umbrella
Allow teams to run time-boxed experiments (A/B tests, pilots) funded from the product budget. If an experiment succeeds, it’s scaled; if not, learnings are captured without the overhead of seeking new approvals.
Governance, portfolio thinking and finance
Finance teams fear losing control — rightly so if governance vanishes. The solution is portfolio-level oversight where the organisation:
- Allocates funding to product portfolios aligned with strategic objectives.
- Uses health and outcome metrics to reallocate investment quarterly.
- Maintains a small central fund for cross-cutting initiatives and platform work.
Consultancies and practitioners are writing about these shifts — for example Valtech’s guide to product-based funding — but every company must adapt the model to its cadence and appetite for risk.
Real-world example: a government department that stayed the course
The UK Department for Environment, Food & Rural Affairs (Defra) moved from project-based to team-based funding on parts of its digital estate and published practical lessons from the experience. Their shift delivered faster iterations and more stable delivery teams because funding continuity allowed teams to own services end-to-end rather than hand them off at a gate. Read their account here.
It’s not only the public sector: the product model underpins how leading digital firms organise today. The difference is that successful adopters accept short-term uncertainty for long-term adaptability.
Three leadership moves that make the model stick
- Shift the conversation from outputs to impact: change the language in board papers and funding requests.
- Invest in product leadership: hire or develop senior product managers who can run products as small businesses.
- Protect experimentation: create guardrails so exploratory work isn’t prematurely judged by delivery metrics.
The playbook is simple in concept but hard in practice: fund the people, back the outcomes, and build governance that measures impact without strangling innovation.
If your organisation is still funding scope instead of capability, start small: pick a strategically important product area, convert its next budget to capacity funding for a year, and measure outcomes closely. You’ll learn faster — and if you’re right, you’ll unlock continuous value. If you’re wrong, you’ll learn sooner and cheaper. That’s the whole point.
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