Funding the "Why," Not Just the "What": Agile Teams in a Product-Driven World

In today's dynamic business environment, the ability to adapt and innovate is paramount. For IT leaders, this means re-evaluating foundational practices like funding models. The traditional project-based approach, while once effective, is increasingly ill-suited to the perpetual demand and continuous evolution inherent in modern software products. It's time to shift our focus from funding discrete "whats" (projects) to investing in the enduring "whys" (agile teams and their capacity to deliver strategic value).

The limitations of project funding in a product world

Projects, by definition, are temporary endeavors with defined scopes and endpoints. This model works well for one-off initiatives. However, the digital landscape has transformed many technology implementations into ongoing products that require continuous development, maintenance, and innovation. When we fund these as projects, we create artificial boundaries and often miss opportunities for sustained growth and adaptation.

This can lead to a situation where teams are funded for a project's completion, rather than for the ongoing stewardship of a valuable product. As market demands shift or new technologies emerge, the original project plan can quickly become obsolete, requiring cumbersome re-justifications for continued investment in the very product that drives business value.

The power of product-centric teams and agile funding

The alternative is to fund product-centric teams directly. These teams are tasked with cultivating the long-term success of a specific product or service. This funding approach aligns with the reality that successful software products create their own demand. As a product matures and delivers value, customer usage often grows, leading to requests for new features, integrations, and enhancements. This perpetual demand is best met by stable, empowered teams rather than a series of project-based funding cycles.

Agile funding models for these teams offer several strategic advantages:

• Flexibility: Teams can re-prioritize work based on evolving business needs and market opportunities, ensuring their efforts remain aligned with strategic goals.
• Efficiency: By funding the team, we reduce the administrative overhead associated with creating and managing numerous discrete projects.
• Continuity of expertise: Teams develop deep product knowledge, leading to better decision-making, faster problem-solving, and more innovative solutions, ultimately boosting ROI.
• Strategic alignment: Funding the "why" (the product's strategic purpose and ongoing value) rather than just the "what" (a specific project's deliverables) ensures IT investments consistently support overarching business objectives.

Driving ROI through strategic investment in people

This shift in funding philosophy is not just about operational efficiency; it's a strategic imperative for maximizing ROI. By investing in the teams that own and evolve our core products, we ensure that our technological capabilities remain relevant and competitive. This enables us to:

• Respond swiftly to market changes and customer demands.
• Integrate new technologies, such as AI, into existing product lines seamlessly.
• Foster a culture of continuous improvement and innovation.

Ultimately, funding our agile teams is an investment in our organization’s sustained success and competitive edge. It’s about ensuring that our technology capabilities evolve alongside our business strategy, delivering ongoing value and driving profitable growth.

Key takeaways for IT leaders

Here are some important considerations for IT leaders:

• Embrace product-centricity: Shift from project funding to funding the teams that manage your enduring software products.
• Agile funding for agile teams: Adopt flexible funding models that allow teams to prioritize work based on evolving strategic needs.
• Invest in capabilities, not just deliverables: Fund the teams' capacity to innovate and adapt, ensuring ongoing product value.
• Maximize ROI through flexibility: Enable your teams to respond quickly to market changes and technological advancements.
• Strategic alignment is key: Ensure IT investments consistently support overarching business objectives by empowering the right teams.

By adopting a product-centric, team-based funding approach, IT leaders can foster greater agility, drive innovation, and ensure that technology investments deliver sustained strategic value and a superior return on investment.