Why is delivering products more valuable than delivering projects?

If your organization is learning more about agile transformation and therefore considering making a change away from the traditional project development process and weighting up delivering products instead, in this blog post, you'll find some tips that share a new perspective regarding the planning and managing stages of this point of view, typical from an organization working agile.

As organizations engage in product-oriented planning, rather than traditional project planning, they often rely on Lean and Agile practices, ensuring they have the right people in place, that they are focused on the work that matters, and that they are bringing high-quality products to market as quickly as possible, achieving the highest possible return on investment (ROI).

Changing to this vision and procedures has a significant impact on resource and capability planning. When teams are assigned to work on delivering value focused on a specific product, and not as a project, they are continuously delivering features and enhancements about what customers need; This way, managers are ensuring that they are correctly allocating skill sets, availability, and funding.

As an agile team matures, and especially, as organizations adopt agile practices at scale like SAFe™, the people are responsible for determining who gets the job done and how they get it done. This paradigm shift offers new possibilities to organizations oriented to developing projects instead of products. The new approach allows, especially team leaders, to decide more effectively, how to analyze labor demand, skills, current and future capacity, and overall resource planning, offering clearer guidance, equipping teams with all the resources they may need, and removing any obstacles that prevent success.

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Changing the focus of strategic planning: Annual or iterative?
Traditionally, project-based work is measured by how quickly and cheaply a team can deliver "on schedule." The tricky part about this approach is that managers can allocate resources to a project in a fiscal year. Usually, once or twice a year.

The problem with estimating production this way is that annual execution plans are usually rigid and don't consider recent information or circumstantial changes that modify the conditions of the project development. This situation might cause a mismatch with the initial estimate, implying a work replanning (taking up to weeks or months) every time unexpected changes come, representing further delays in the project development.

Instead, those organizations focusing on delivering value as products instead of projects, the strategic planning changes. Rather than hand over annual plans for execution, leaders articulate strategic priorities, often in the form of objectives and key results (OKRs) or a similar framework.

Once leaders disclose these strategic priorities, they step back and allow teams to determine their execution plans, assigning goals with clear metrics to measure progress.
The role of leaders in this approach is not to manage the plan but to provide teams with the right resources and remove any organizational obstacles when delivering value.

This doesn't mean that leaders should stop planning a year or two from now. Large-scale thinking is still important to keep the organization moving in the same direction. The main difference in this shift from planning annually to doing it iteratively is adjusting the feedback loops from the team and making adjustments as needed.

Learn how to adjust your schedule to better manage team capacity:
To manage the team and its needs more adequately and add value to both the end customer and the team, it is recommended to apply the following practices:

It's crucial to have a future perspective as a renewable temporary space that allows evaluation of the team's progress and compliance with the strategic initiatives. Following this new perspective of time and focusing on delivering product value, both the management and the team (or project), managers must collaborate in analyzing the capacity, and forecasting to establish a systematic prioritization process on the portfolio of projects (or products, in this case). This analysis is recommended to be carried out periodically to discover any resource limitations and take the appropriate measures.

Accept uncertainty: Instead of keeping budgeting employee time by the hour, managers need to accept plans as a guide. As the future is uncertain, the more specific an annual work plan is, the more chances are to be wrong. That's why team leaders must create resource allocation plans for the following one or two team increments, typically one or two quarters. Anything that goes further in time should be considered a first draft.

Gain visibility into multiple team workflows
Managing capacity and resource allocation within an organization considered agile at scale cannot be done in a spreadsheet. However, this is the reality of many organizations. The manual nature of spreadsheets makes them time-consuming to maintain and disconnected from other work management tools, which means that this data is almost always slightly (or significantly) out of date.

However, doing capacity planning this way is often based on retrospective data, sometimes from old sheets. It's essential to consider that the conditions of previous projects may vary since many factors can influence the cost of the work, without neglecting the possible complications that may arise based on the situation of the current project, which will affect the time and investment dedicated to the delivery of the product.

When management and team leaders plan and analyze the investment of resources in a workflow and the value that's delivered, they need to have real-time visibility to improve the ability to react to unforeseen events and be in check about the level of investment, whether there's a chance to make adjustments as the team iterates, runs the project, and new information comes to light.

What are the benefits of having real-time visibility of the resources?
Based on the previous scenarios, keeping track of the progress of the project based on old data to project future plans on totally new projects isn't a good practice, so you should consider doing the following:

There are software tools (other than spreadsheets) that make it easier to manage work and offer greater visibility into a team on project progress through data aggregation. Research and stick with the tools that best fit you and your team.

Making data-driven decisions on a real-time report indicating team progress will allow team leaders to identify what percentage of the work is complete and what remains to be done. This will allow determining the next priorities and how to empower the team with more staff or funding. In addition, it also allows observing how internal and external dependencies impact the team's capacity, which further improves the process of delivering value to the end customer and the organization itself.

Experiment and get results quickly!
When an organization has a work development cycle implemented from an agile point of view, and it's supported on software tools, it offers opportunities for improvement by implementing experiments. This allows for getting answers about behaviors quickly and adjusting based on the results.

With the insights from these experiments, teams gain enough information to choose whether to pivot or continue, indicating a focus on delivering value rather than just delivering a project.

This early and iterative product-testing approach allows team leaders to view everything on the roadmap as a set of hypotheses and experiments. This will enable them to move from managing a project-based roadmap to running a portfolio of innovative products. With this mindset, leaders know better what skill sets are needed to get the job done.

How to allocate resources based on top priorities?:
Having the possibility of experimenting is an activity that organizations with a focus on long-term projects consider a luxury since adjusted estimates don't give space for this to happen; however, having tech support that allows having the fundamental aspects of the project correctly estimated will offer these spaces for experimentation and innovation that will provide greater value than expected, such as:

An experimentation approach allows for quantifying the value of the results and taking advantage of the resources better, allowing a faster market adaptation and offering great value for the products.

Improve employee engagement during the value delivery process. Establishing a correlation between the effort and the impact of workers on the company's success will boost their commitment, reduce burnout and increase the value that teams contribute.

The value offered by the organization is proportional
An organization focused on offering value offers shorter planning windows with fast feedback cycles, providing visibility of all work in progress to all parties involved, and making decisions based on data and strategic priorities can report benefits such as:

•   Increased ability of individuals and teams to focus on the work that matters most.
•    Less resource waste and more budget devoted to priorities.
•    A more committed staff contributing from all of their skills.

When the leaders of the organization and those in charge of the teams allow them to be organized based on the previously established priorities, they will eliminate any obstacle that prevents the success of the entire organization, and of course, of the end customer.

If you need to implement these types of practices and you need your teams to start delivering value both internally at the level of procedures and frameworks, or perhaps you need to change spreadsheets for a specific software tool, but you're not sure if this change will be appropriate, you should contact us and talk with our team of digital transformation consultants or Atlassian solutions experts, depending on the case or your need, we offer expert guidance on the tools and practices that best adapt to your organization needs and environment.