How CIOs Can Successfully Lead the Project-to-Product Transition

With IT organizations in various stages of their shift from a project-to-product-based delivery model, it has become apparent to chief information officers that the business value of the product-based delivery model is paramount to their jobs. 

Many CIOs are shifting their IT operating model to product-based delivery, with 87% of organizations using product teams to achieve business outcomes. This speed of adoption can be attributed to the improved effectiveness of organizations that adopt product management. The top 20% most effective organizations are 3.2 times more likely to use product teams that are measured on business outcomes than those who do not. 

CIOs must keep the following in mind to understand desired outcomes, identify the key challenges with the shift, and the leadership approaches that support successful transitions. 

Journey to Product-Based Delivery Model Continues 

On average, about 38% of CIOs work is currently being done using a product-based delivery model. They expect to continue moving more toward this model, indicating that they expect 70% of their work to use a product-based delivery model in five years. 

CIOs beginning their journey to the product-based delivery model should start with small pilots that eventually extend to most of IT. They can also scale product management to integrate IT with other business units using fusion teams. 

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How the Middle Manager Role Changes  

While it is commonly understood that the middle manager needs to change as part of this transition, the extent of the change is not always anticipated. Thirty-eight percent of CIOs who have made the transition to product-based delivery model report that the middle manager role has changed completely or significantly. 

CIOs need to focus on middle managers as part of the product-based delivery model transition, by focusing on coaching, mentoring, performance management, as well as learning and development for their middle managers. They should also assign leadership of centers of excellence or communities of practice to middle managers. 

Challenges Faced as Part of the Shift 

CIOs experience challenges in making the shift to the product-based delivery model. Sixty-five percent of CIOs find that the business culture was a challenge, while 53% say that the funding model was still project centric. In addition, 53% indicate that team members are not fully capable of performing in the self-organized manner required of the product-based delivery model. 

Changing culture, whether just within IT or with the business, requires focus and persistence. CIOs who want to finish their journey to the product-based delivery model should work to change the culture of their organization, including mapping the journey. They must also modify the systems, processes, and practices to reinforce the new culture.  

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Leadership Support in the Transition 

The three most common leadership actions used to support the product-based delivery model transition include defining clear business outcomes metrics, reorganizing, and implementing culture change. 

A defining feature of product management is to align toward business outcomes, so it is concerning that only half of the respondents define metrics for those business outcomes. Other approaches used include change management, implementation pilots, clearly defined business goals, and strong collaboration partners. These leadership approaches are seen as having a moderately to very/extremely effective impact on the transition to a product-based delivery model.  

The most effective actions (compared to the most common actions above) were changing culture, having clear business outcome metrics, and using implementation pilots.  

Business Outcomes of Customer Experience  

CIOs often indicate that they are striving to improve external customer, consumer or citizen experience, while others want to increase enterprise-wide speed and agility. Other CIOs look at the model transition to decrease time to market of digital products and services and achieve better alignment between the business and IT priorities.  

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If CIOs can keep these business outcomes in mind, they can optimize their performance as they align between business and IT priorities.  

About the Author: Christie Struckman is a vice president in Gartner's CIO research team. She helps CIOs and other C-level executives with aligning the organizational building blocks needed to succeed in the digital era. She is currently presenting on topics such as this at Gartner IT Symposium/Xpo™, taking place now through October 24, 2024 in Orlando, FL.