Why do so many organisations switch to a product model and then quietly slide back to projects? The move from project-centric thinking to a sustainable product operating model is now a board-level conversation — not because it’s trendy, but because it directly affects speed, cost and customer value. Recent industry research shows most organisations still face significant obstacles when making that shift: the effort is organisational, not merely technical. Planview’s Project-to-Product report and analysis from McKinsey make that clear — success depends on leadership decisions, funding models and how you measure outcomes.
What usually goes wrong (and why leadership matters)
At a glance the obstacles are familiar: competing priorities, annual budgeting cycles, and teams organised by function rather than value. But the deeper truth is cultural. Leaders often adopt the language of products while keeping project-era constraints: fixed-scope contracts, time-boxed budgets and success measures tied to outputs not outcomes. That mismatch creates constant tension.
Three consequences you’ll recognise:
- Short-lived autonomy: teams labelled as “products” but still reporting into functional silos.
- Misaligned funding: project-based budgets force prioritisation of delivery over discovery.
- Outcome blindness: KPIs focus on features shipped rather than customer impact.
Four pragmatic moves to make the product model stick
Change the operating model by changing what leaders do — not just what teams are called. Below are four senior-leader commitments that consistently separate organisations that succeed from those that don’t.
1. Define product purpose and outcomes, then protect them
A product is more than a backlog; it has a purpose linked to an enduring user need and a measurable outcome. Leaders must insist on clear outcome hypotheses (e.g. reduce churn among mid-tier customers by X%) and protect discovery time by avoiding ad-hoc feature requests that bypass product trios. Treat product teams as owners of a customer outcome, funded to iterate until the outcome is proven.
2. Move from project funding to product funding
Annual or project-based funding kills long-term optimisation. Adopt portfolio funding that backs teams and outcomes over time. That doesn’t mean unlimited budgets — it means staged funding and learning gates. Planview’s report shows organisations that reallocated budgets to product teams accelerate time-to-market and improve ROI.
3. Reorganise around value streams and platform teams
Organisations benefit when cross-functional product teams align to end-to-end value streams. This is where platform thinking matters: internal platforms remove toil, letting product teams focus on customer outcomes. The ideas in Team Topologies — explicit team types and team interaction modes — are practical when designing who owns what and how flow is protected.
4. Change governance: measure flow and outcomes, not output
Swap feature-count KPIs for metrics that reflect flow and value: lead time to value, outcome attainment, and customer retention for affected cohorts. Governance should incentivise experiments and accept intelligent failures. McKinsey’s analysis emphasises tying incentives and governance to product outcomes to unlock bottom-line benefits.
Real-world signals — what good looks like
You can see these principles in practice across successful digital organisations. Spotify’s well-known squad model (used in product and engineering at scale) is often simplified into a template, but its real lesson is organisational intent: teams are empowered to own part of the customer experience and are supported by platform teams and strong product leadership. Similarly, Amazon’s emphasis on small, independent teams — and the two‑pizza rule that incentivises limited scope and autonomy — demonstrates how structure, not just process, drives velocity.
Closer to the research, recent industry studies (Planview, McKinsey) show consistent improvement where organisations:
- Align funding to product teams
- Govern for outcomes
- Invest in platform capabilities to reduce cognitive load
Making the leadership shift — practical first steps
If you’re a CEO, CPO or CTO wondering how to start, choose two concrete leadership actions for the next quarter:
- Reword an existing KPI — change a delivery metric into an outcome metric and publish it across the leadership team.
- Run a funding pilot — select three teams, move them to product-style funding and measure time-to-learning over three months.
These small moves surface organisational friction quickly and allow leaders to fix governance and handoffs without wholesale reorgs.
Where this leads
Shifting from projects to products is less about engineering practices and more about leadership intent. When executives change how they fund, measure and defend product teams, they start to see compound benefits: faster learning, reduced rework and clearer customer value. If you keep calling for product autonomy while rewarding fast delivery of features, you’ll get exactly what you pay for: faster feature delivery, not better outcomes.
Think of the product operating model as a leadership habit. Start with one clear outcome, fund the team to own it, protect their focus and demand evidence of customer impact. That’s how product models stop being a nice-sounding idea and become the mechanism for durable competitive advantage.
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