Elite organizations are proving the power of the product operating model.
They’re shifting from time- and resource-wasting project-based work to value-focused product-oriented work, which enables them to improve operational efficiency, customer centricity, delivery speed, and other objectives.
But just like any journey, the project-to-product shift comes with challenges.
In fact, only 3% of survey respondents said nothing stands in the way of their transformation, according to Planview’s 2024 Project to Product State of the Industry Report.
Even though they face roadblocks now, respondents still anticipate that the product operating model will continue to advance at their organization: 50% of respondents forecasted that in five years, over 80% of their work will be product-oriented – a 60% increase from today.
If your organization’s project-to-product timeline isn’t progressing as planned, or you’re not seeing the desired efficiency and effectiveness gains from product-oriented work, read this article to understand the roadblocks other organizations are facing.
Get more detail in the full 2024 Project to Product report.
Top 8 Roadblocks to Implementing a Product Operating Model
As you review these roadblocks, look for any commonalities in your organization’s journey, and use them to develop a plan to address your own challenges.
Measuring misaligned metrics
Fifty percent (50%) of respondents still measure the success of delivery teams primarily with cost and quality metrics instead of business value. Cost and quality metrics – while useful in certain contexts – focus on outputs more than outcomes.
Outputs are typically detached from customer needs. They focus on producing deliverables rather than creating customer value and impact.
Contrast those with outcome metrics, which measure the impact or value created – like time to value, flow efficiency, defect rates, or even brand sentiment – and these metrics help teams know if they’re prioritizing the right work.
Read More: How to Use Flow Metrics® to Optimize Software Delivery
Incorporating customer feedback too slowly
Just 15% of organizations indicated that they can incorporate customer feedback within weeks. While satisfied customers increase basket size, create a positive word-of-mouth environment for the organization, and increase business success, dissatisfied customers lead to the opposite.
With a product-based model that measures the flow of work’s impact to customers, organizations can actively maintain stronger relationships with customers.
Read More: Kraften i produktbaserat tänkande för kundcentrerad innovation
Lacking a connection between work and business outcomes
Respondents expressed a lack of awareness around how work connects to positive business outcomes. Two-thirds couldn’t explain the connection, and felt they have few leaders who could articulate the business drivers.
Without a close tie to the value stream and the business outcomes they should be working toward, teams end up wasting effort, missing opportunities, and falling short of the goals they’re trying to achieve.
But when teams have identified value streams and business outcomes, they can take active responsibility for their work’s outcomes as it affects customers and revenue. Leaders can balance resources as needs change, and identify dependencies representing risks, wastes, and bottlenecks.
Read more: What Is Value Stream Management in Software Delivery?
Underanalyzing flow metrics
Another roadblock organizations face is that they don’t analyze their flow metrics enough. They also lack leaders who can connect flow to customer experience and to business outcomes.
Flow metrics measure the efficiency and effectiveness of work in a value stream all the way until it garners customer feedback. Data in our report showed a clear correlation between a tighter control over measuring the flow of work to customers and higher-performing organizations.
Without tight control over these metrics, teams can’t see the bottlenecks, delays, or waste in their processes that ultimately hurt business growth. They may end up optimizing for the wrong things, such as individual performance metrics, rather than optimizing for customer value.
Read More: Flödesmått: En företagsledares guide till att mäta vad som är viktigt vid programvaruleveranser
Limiting power to product managers
The product manager role is crucial when moving from project to product, but only 35% of respondents work in organizations where product managers are properly empowered. This leads to less effective product work and difficulty meeting business goals.
When product managers have the power to relentlessly prioritize, they keep the right work flowing smoothly through the value stream. Additionally, if they have the resources and freedom they need to experiment, they can continue to drive their product’s roadmap and vision toward the business outcomes the work affects.
Read More: Lean Product Management: Varför det är viktigt
Lacking visibility into value stream network
A value stream network is an interconnected system of value streams working together to deliver value to customers across multiple products, services, or business units. However, 65% of respondents cannot see their organization as a value stream network.
This lack of visibility into the network as a whole means leaders can’t manage value streams at a high level. If they could, they could extract insights that enable them to identify dependencies representing risks, waste, and bottlenecks. They could manage their portfolio of products, balancing resources as customer needs change. They could compare value stream and product performance, surfacing successful behaviors and spreading them across the whole organization.
Read More: How to Identify Your Value Streams
Running manual, dependent paths to production
Very few respondents (15%) said all products have automated, independent paths to production. For the other 85%, the manual release processes and dependencies slow down production. Teams struggle to release updates frequently or respond to customer needs when they change.
That’s why automated and independent production paths lead to increased customer satisfaction. Organizations can incorporate customer feedback much more quickly, and the releases are much more reliable and frequent. Higher-performing organizations are much more customer-centric, and this is part of how they achieve that.
Managing dependencies in an unstructured way
Only 10% of respondents said that they have a structured approach to managing dependencies across teams and value streams. This is likely because leaders have to be able to see the organization as a value stream network in order to identify and manage dependencies. Without this visibility, they can’t avert risks, wastes, and bottlenecks.
Elite organizations are four times more likely to make work visible. They’ve realized that this visibility is essential for controlling and influencing its speed, which allows it to be adjusted as it happens. This means they can identify opportunities, align and apply resources, and accelerate business outcomes.
Read More: What Is Value Stream Mapping?
Diagnose and Address Your Project to Product Roadblocks
This year’s project-to-product research should encourage you in the product operating model journey, especially if you’re still in stage 2 or 3. Obviously, this shift isn’t easy or quick, based on the number of roadblocks and how many organizations are stuck in these stages.
If you’re facing any of these roadblocks (or other roadblocks unique to your organization), you can find a path forward by reading the full State of the Industry Project to Product report. The report outlines eight areas where elite organizations are excelling with the product operating model.
Additionally, we’re offering personalized assessments. You can request one from Planview’s team of highly skilled experts to build a practical roadmap for operationalizing and sustaining a mature product operating model. Explore how you can drive a project-to-product shift successfully, from transformation to realization.
