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What’s the difference between a project and a product?


May 26, 2021

Given the drastic shift to agile ways of working, much of how customer value is delivered today has changed surprisingly little. Most customer value is delivered in terms of projects: fixed start and stop dates, deliverables and team members, and after the work is delivered, the individuals on the team leave to work on a new project. That’s just how work gets done usually.

But it doesn’t have to be.

The movement for shifting from a project mindset to a product mindset has gained momentum over the past few years, not in small part due to the book “From Project to Product” by Mik Kersten. (You can hear me interview Mik on this topic on an Agile Amped podcast here.) Now more businesses are looking to bring a more product-based mentality to delivering customer value.

Years ago, I was inspired to create a useful visual with some rationale, and we’ve updated it. I based “Shifting your mindset from project to product” on my own work in the field, as well as the research and learning I’ve done.

You may be wondering whether you need to shift your way of thinking. Only one way to find out.

So what is the difference between a project and a product?

Here is the definition of a project provided by the Project Management Institute (PMI):

“A project is temporary in that it has a defined beginning and end in time, and therefore defined scope and resources. And a project is unique in that it is not a routine operation, but a specific set of operations designed to accomplish a singular goal.”

On the other hand, a product is a good, service, platform, application, system, etc., that is created, generally for sale, to meet customer and business needs. In retail and manufacturing, this may be taking materials and turning them into finished goods. In technology, your product may be software or a service, which need maintenance and upgrades.

Looking at the definitions, we can see that you may choose one or the other depending on the situation.

Should I shift my mindset from project to product?

When it comes to Lean and Agile, major shifts in mindset are needed to move from executing projects to maintaining products, precisely because of user expectations and feedback. Over time, as users change how they engage with a product or service, the business needs to change in response. If work is delivered with a project mindset, the product or service team may not have any of the historical knowledge needed to address user feedback.

The important thing is to ask when the project-based mindset is more useful or would yield more value than a product-based mindset. By comparing them side by side, you can see why traditional project-minded approaches to software and service releases have led to problems like poor predictability, inability to change delivery strategy due to new market information mid-flight, and loss of tribal knowledge. Also, the product mindset tends to treat the humans involved at all levels as unique individuals with their own motivations, rather than interchangeable “resources.”

People and interactions over process and tools, right?


Skip Angel

Business Agility Lead