This study analyzes the successful digital transformations of CarMax and The Washington Post to advocate for a strategic shift from traditional IT project management to digital product management. It demonstrates how adopting practices like Agile and DevOps, combined with empowered, cross-functional teams, enables companies to become nimbler and more adaptive in a fast-changing digital landscape. The research is based on extensive field research, including interviews with senior executives from the case study companies.
Problem
Many businesses struggle to adapt and innovate because their traditional IT project management methods are too slow and rigid for the modern digital economy. This project-based approach often results in high failure rates, misaligned business and IT goals, and an inability to respond quickly to market changes or new competitors. This gap prevents organizations from realizing the full value of their technology investments and puts them at risk of becoming obsolete.
Outcome
- A shift from a project-oriented to a product-oriented mindset is essential for business agility and continuous innovation. - Successful transformations rely on creating durable, empowered, cross-functional teams that manage a digital product's entire lifecycle, focusing on business outcomes rather than project outputs. - Adopting practices like dual-track Agile and DevOps enables teams to discover the right solutions for customers while delivering value incrementally and consistently. - The transition to digital product management is a long-term cultural and organizational journey requiring strong executive buy-in, not a one-time project. - Organizations should differentiate which initiatives are best suited for a project approach (e.g., migrations, compliance) versus a product approach (e.g., customer-facing applications, e-commerce platforms).
Host: Welcome to A.I.S. Insights, powered by Living Knowledge. I’m your host, Anna Ivy Summers. Today, we're diving into a fascinating study from the MIS Quarterly Executive titled "Transforming to Digital Product Management."
Host: It analyzes the successful digital transformations of two major companies, CarMax and The Washington Post, to show how businesses can become faster and more adaptive by changing the way they manage technology. With me to break it all down is our analyst, Alex Ian Sutherland. Alex, welcome.
Expert: Great to be here, Anna.
Host: So, let's start with the big picture. Why does a company need to transform its IT management in the first place? What's the problem this study is trying to solve?
Expert: The core problem is that traditional IT project management is often too slow and rigid for today's world. Businesses plan huge, year-long projects with fixed budgets and features. But by the time they launch, the market has already changed.
Host: So they end up building something that's already outdated.
Expert: Exactly. The study points out that this old model leads to high failure rates and a disconnect between what the tech teams are building and what the business actually needs. The Standish Group reports that only 35% of IT projects worldwide are successful. That’s a massive waste of time and money.
Host: A 65% failure rate is staggering. So how did the researchers in this study figure out a better way?
Expert: They went straight to the source. The author conducted extensive field research, including in-depth interviews with dozens of senior executives at companies like CarMax and The Washington Post who have successfully made this shift. They didn't just theorize; they studied what actually works in the real world.
Host: Let's get into those findings. What was the most important change these companies made?
Expert: The biggest change was a mental one: shifting from a 'project' mindset to a 'product' mindset. A project has a start and an end date. You build it, launch it, and the team disbands. A digital product, like an e-commerce platform or a mobile app, is never really 'done.' It has a life cycle that needs to be managed continuously.
Host: And that means you measure success differently, right? Not just on time and on budget?
Expert: Precisely. Success isn't about delivering a list of features. It’s about achieving business outcomes, like increasing customer engagement or driving sales. The study calls getting stuck on features the "build trap." The goal is to deliver real value, not just ship code.
Host: To do that, I imagine you need a different kind of team structure.
Expert: You do. The study found that successful companies build what they call durable, empowered, cross-functional teams. 'Durable' means the team stays together for the life of the product. 'Cross-functional' means it includes everyone needed—product managers, designers, engineers, and even data and marketing experts.
Host: And 'empowered'?
Expert: That's the key. They aren't just order-takers. An executive doesn't hand them a list of features to build. Instead, they give the team a business objective, like "increase online credit applications by 20%," and empower them to figure out the best way to achieve that goal.
Host: So, Alex, this all sounds great in theory. But for the business leaders listening, why does this matter to their bottom line? What are the practical takeaways?
Expert: The biggest takeaway is agility. In a fast-changing market, you need to be able to pivot. The CarMax CITO is quoted saying he doesn’t know what the world will be in three years, but his job is to position the company to be "nimble, agile, and responsive" to whatever comes. This product model allows for that.
Host: And it seems to fix that classic divide between the tech department and the rest of the business.
Expert: It absolutely does. When your teams are cross-functional, you stop talking about 'IT and the business' as two separate things. As one executive in the study put it, "IT is business. Business is IT." They are integrated into one team working toward a shared goal.
Host: So if a company wants to start this journey, where do they begin? Do they have to change everything overnight?
Expert: No, and that's a crucial point. The study recommends you start small and scale up. Identify one important initiative, form a true product team around it, give them the resources they need, and demonstrate the value of this new approach. Once you have an early win, you can expand it to other parts of the business.
Host: Fantastic insights, Alex. Let's try to summarize for our listeners.
Expert: It's a fundamental shift from viewing technology as a series of temporary projects to managing it as a portfolio of value-generating products. This requires creating stable, empowered teams that focus on business outcomes, not just project outputs.
Host: A powerful message for any company looking to thrive in the digital age. Alex Ian Sutherland, thank you so much for breaking down this complex topic for us.
Expert: My pleasure, Anna.
Host: And thanks to all of you for tuning in to A.I.S. Insights. Join us next time as we continue to connect you with the knowledge that powers business forward.
digital product management, IT project management, digital transformation, agile development, DevOps, organizational change, case study
