Project to Product Transitions: Challenges & Solutions Nobody Talks About
In the rush to embrace product-centric operating models, organizations often stumble into predictable yet rarely discussed pitfalls. Through the lens of Team Topologies, we examine the challenges of transitioning from project to product and offer practical insights for navigating this complex transformation. This discussion is based on a live interview with Matthew Skelton, co-author of the book Team Topologies, and Val Yonchev, head of customer success at Team Topologies.
The Product Explosion Problem: When Everything Becomes a Product
One of the common challenges that organizations face is the ‘product explosion’ –the tendency to rebrand everything as a product without proper consideration. This approach creates several problems:
Unsustainable Team Structures: Organizations quickly realize they don’t have enough developers to staff individual product teams for every identified ‘product.’
Artificial Boundaries: Creating product boundaries without understanding true value flows causes artificial separations that can hinder delivery.
Resource Strain: The financial and organizational burden of maintaining numerous small product teams becomes unsustainable.
Solution: Value Stream Thinking
Instead of creating individual product teams for every component, organizations should focus on identifying and organizing around value streams. A single value stream can create multiple products, similar to how a manufacturing line might produce different variants of an item using the same core process.
Consider a real-world example: a confectionery company might use the same team and production line to create different candy bars, with only slight variations in ingredients and packaging. Similarly, in software, a single stream-aligned team can manage multiple related products that share common business domains or technical foundations.
A case study from Telenet, a Belgian telecom provider, illustrates this well. Initially adopting the Spotify model, Telenet faced structural frictions that hampered business agility. By reorienting their teams around value streams rather than isolated products, they optimized for flow and adaptability, reducing dependencies and bottlenecks.
Not Everything Needs to Be a Product: The Power of Discrimination
A fundamental misconception in product transformation is that everything must become a product. This binary thinking oversimplifies organizational complexity and can lead to forced fits that don’t serve the organization’s needs.
What Should Not Be a Product:
Compliance Projects: One-time regulatory compliance initiatives are better suited to project-based execution rather than ongoing product management.
Boundary Spanning Activities: Work done to help reshape an organization—by enabling teams, communities of practice, or principal engineers—should not be forced into a product model.
Cross-cutting Concerns: Activities that discover improvements across organizational boundaries often work better outside the product paradigm.
Value is Key: Redefining Product Through Consumer Lens
The true measure of a product lies not in its features or internal definition but in the value it delivers to consumers. This perspective requires a fundamental shift in thinking:
Key Principles:
Consumer-Centric Definition: Products are defined by their value to the consumer, not just their creation or sale.
Internal Products Count: Components and platforms can be products if they have clear consumers and deliver definable value.
Value Stream Alignment: Products should align with value streams that deliver interconnected value to end users.
The experience of Capra Consulting, a Norwegian IT consultancy, is a pertinent example. By adopting a networked structure inspired by Team Topologies, Capra dissolved hierarchical management and introduced specialized teams. This approach fostered distributed decision-making, reduced cognitive load, and enhanced operational effectiveness.
Stream-Aligned Teams: The Foundation of Successful Product Organizations
Rather than creating product teams in isolation, organizations should focus on building stream-aligned teams that can manage multiple related products effectively. This approach offers several advantages:
Cognitive Load Management: Teams can handle multiple products while maintaining manageable complexity through proper domain alignment.
Enhanced Collaboration: Teams working on related products can better coordinate and optimize their collective output.
Efficient Resource Utilization: Organizations can better balance their technical resources across related products.
A case study from Trade Me, a leading online marketplace, exemplifies this principle. By introducing the concept of the Thinnest Viable Platform (TVP) from Team Topologies, Trade Me streamlined platform capabilities, reduced cognitive load, and improved collaboration between product and platform teams.
Platform as Product: A Critical Success Factor
One often-overlooked aspect of product transformation is the treatment of platforms. Organizations must approach their platforms with the same product thinking they apply to customer-facing offerings.
Key Platform Considerations:
Value Definition: Platforms must reduce cognitive load and accelerate flow for their consumers.
Multiple Platform Layers: Large organizations often need nested platform products serving different consumer needs.
Product Management Discipline: Platforms require dedicated product management and continuous evolution.
Practical Implementation Steps
To successfully navigate the transition to products, organizations should:
Start with Value Streams: Identify and map value streams before defining product boundaries.
Apply the Two Lenses: Use cognitive load and Team Topologies principles to define sustainable team boundaries.
Challenge Assumptions: Regularly question whether something needs to be a product or could be better served through other means.
Enable Flow: Focus on reducing handoffs and eliminating unnecessary processes in favor of consumable services.
Conclusion
The transition to a product operating model requires nuanced thinking and careful consideration of organizational context. Success lies not in converting everything to products, but in applying thoughtful product thinking where it adds value. By focusing on value streams, maintaining appropriate team boundaries, and ensuring that platforms are treated as products, organizations can create sustainable and effective product-centric operations.
While product thinking is powerful, it's not a universal solution. The goal is to accelerate value delivery and maintain sustainable operations, whether through products or other organizational structures. By avoiding the common pitfalls and focusing on true value delivery, organizations can build more effective and resilient operating models that serve today’s needs and evolve for tomorrow.
About the interviewees:
Matthew Skelton, CEO at Conflux / Co-author of Team Topologies
Val Yonchev, Head of Success, Consulting and Partnerships at Team Topologies
