Shifting from a project-focused to a product-driven organization: insights from Luis Gonçalves

Introduction to Product Development

Oskar (Host): Welcome to Around the Product Development, our weekly series where we deep dive into the world of digital product creation—all in 25 minutes. Here, we explore every stage, from ideation to conversion and monetization, providing you with actionable insights and practical knowledge.

Each week, we bring you fresh perspectives from industry experts, giving you the opportunity to learn directly from their hands-on experience. All this is possible thanks to our Agile Product Builders community, a Slack community powered by Boldare, digital product creators and consultants.

The Shift from Project-Based to Product-Driven Mindset

Oskar: Today, we have a very interesting topic. I believe we’re going to tackle a shift that many companies are facing right now—moving from a project-based approach to a product-driven mindset. A more traditional way versus dynamic expectations from the market. Usually, the traditional approach limits adaptability, increases technical debt, and fails to maximize long-term value. These are the topics we’re going to dive into today. And I’m joined, as I mentioned, by Luis Gonsalves, an agile transformation expert, product leadership consultant, entrepreneur, bestselling author, and international keynote speaker.

Luis Gonsalves: An Introduction

Oskar: I could keep going, but let’s keep it simple. Luis has spent years guiding organizations worldwide in redefining their approach to digitization, ensuring long-term innovation, and making a difference. Hello, Luis, how are you today?

Luis (Guest): Thank you so much for having me here, Oscar. And thank you for the titles—just call me Luis, it’s fine. Honestly, I’m just a guy who has failed more than I succeeded.

I like to mention this because a lot of people say that I am where I am because I’m smart. No, I’m not smart. I’m just able to recover from the stupidity I’ve committed throughout my entire career

The Project-Based Approach vs. Product-Oriented Approach

Oskar: Moving on, many companies today struggle with delivering long-term value because the market is so dynamic now. We can’t talk about long-term strategies like we used to for 5 or 10 years, right? But we still have companies stuck in a project-based mindset. Before we dive into how to change that, can you tell me the key differences between a project-oriented and a product-oriented approach?

Luis: Sure, I’ll highlight a couple of key differences. I usually start by showing the classic “project delivery triangle”—on time, on budget, with quality. I ask, “If you deliver a product on time, on budget, and with quality, is it a success?” Everyone says yes. But, if you put an application on your phone that doesn’t solve any real business problem, even if it’s delivered on time, on budget, and with quality, would you install it? No.

This points to a fundamental difference: project organizations are often focused on delivering things, not solving problems. A lot of organizations are still stuck in this machine of delivering requirements, not solving customer or business problems.

Organizational Structure and Budgeting: Key Differences

Luis: Another key difference is the organizational structure. Many organizations are designed around projects, with departments like IT, software, quality, and delivery. I recently spoke to a bank in Saudi Arabia, where the product owner had no direct access to the developers. They had to go through multiple layers just to communicate with the team. This project-based design is very traditional. In contrast, when you have a product-oriented company, you’re focused on value streams, not departments.

And finally, how budgeting is done makes a huge difference. In a traditional organization, budgeting is often done by department. But in a product-oriented organization, the budget is assigned to value streams and OKRs (Objectives and Key Results). With this setup, you can quickly shift resources and priorities without being stuck in department silos.

Real-World Transformation: Metro Case Study

Oskar: Right, theory is great, but let’s talk about real-world transformations. Can you share an example of a company that successfully transitioned from a project-based to a product-driven approach?

Luis: Sure! I’ll share an example from Metro, one of Europe’s largest supermarket chains. This transformation took place over several years. When I joined, Metro had about 2,000 engineers, and they were quite traditional in their approach. We started by identifying 12 potential startups within the company and drew lines around each value stream, beginning with the webshop.

We created a cross-functional team of around 300 people focused on the webshop experience, covering everything from checkout to distribution. Each transformation was iterative—each learning from the previous cycle, which accelerated our progress. Over time, we identified smaller sub-teams around specific aspects of the webshop experience. Every three months, we would iterate and bring in more value streams based on learnings from the previous cycles. Five years later, they still send me pictures of the transformations we made together.

The Importance of Executive Buy-In

Oskar: That’s incredible! And the key here is getting executive buy-in, right?

Luis: Exactly. Getting the CEO on board is critical. Without that, you can forget about a successful transformation. I was brought in by the CEO because he understood the importance of this transformation. But I’ve seen many cases where the resistance within organizations is huge, especially when it comes to breaking down silos.

Shifting Organizational Culture

Oskar: It’s not just about the strategy, but shifting the culture within the organization. How can leaders ensure that employees at all levels embrace this change?

Luis: They can’t. Not everyone will buy in. You have to give people the tools, coaching, and time to learn, but at the end of the day, some people won’t want to change. Leaders need to accept that some employees will resist the change, and they will eventually have to leave. It sounds harsh, but it’s just reality. A bad apple can destroy the whole tree. Supporting people is crucial, but change can’t be forced on those who refuse to embrace it.

Advice for Leaders: Starting the Transition

Oskar: What advice do you have for business owners, founders, or product managers looking to transition to a product-driven approach?

Luis: I’d advise them to ask themselves if the knowledge that brought them to where they are will help them lead in the next 10 years. A great leader I once worked with told me:

I realized that everything I learned to get here will kill me if I continue applying it the same way

The Learning Curve and Open Mindset

Oskar: That’s a powerful message. The learning curve is crucial to staying relevant and successful in today’s digital world. Thank you so much for your insights, Luis.

And to our audience, if you’re still hesitant to join the Agile Product Builders community, now is the time! Stay connected and be part of these insightful conversations with experts from various industries. We’ll see you next time with more actionable knowledge. Thanks again, Luis!