3. Business Demands, Technology Implements - Overcoming a Common Challenge in Digital Transformation

Introduction

A common challenge in companies embarking on their digital journey is the mindset that “business demands, and technology implements.” This approach, which can be especially prevalent in organizations with little experience in digital products, risks turning product and technology teams into mere solution implementers rather than problem solvers.

In this session, we’ll discuss why this approach doesn’t work, how it stifles innovation and engagement, and what an effective alternative model looks like. I’ll also share a real-life case from my experience at Lopes, showing how shifting to a problem-solving model resulted in significant improvements.

The “Business Demands, Technology Implements” Mentality

This mindset often stems from a common assumption: “As the business expert, I know best how to solve our problems. All technology needs to do is implement my solution.” While this may seem logical, it places technology and product teams in a position where they execute predefined solutions instead of exploring how to achieve the best outcomes. The product team becomes a “feature factory,” building whatever features are requested without a clear understanding of the business impact.

Product management expert Marty Cagan describes this as a feature team model versus an empowered product team. Feature teams churn out features, while empowered product teams solve problems by developing hypotheses, testing solutions, and iterating based on results.

Why This Model Doesn’t Work: Five Key Reasons

Successful Tech Companies Don’t Use This Model: Leading companies like Apple, Amazon, Google, and Netflix avoid this approach. Instead, they empower product teams to identify and solve core business problems, trusting them to deliver solutions that drive results.
Creates an Adversarial Relationship: When business dictates and technology executes, it often results in tension. Technology teams feel disengaged because they are only “completing tasks” rather than participating in decision-making. This lack of engagement increases turnover and leads to frustration on both sides.
Lack of Ownership and Accountability: Technology and product teams, without ownership of the problem, tend to feel less responsible for the outcomes. Since they didn’t define the solution, they may attribute any failures to the business’s original request rather than actively seeking to improve the product.
Business Interests Over Company-Wide Goals: Business areas may sometimes prioritize requests that benefit their department but not the organization as a whole. For example, at Lopes, the team managing real estate agents requested that leads be evenly distributed among all agents, regardless of performance. While this might have motivated agents, it didn’t optimize the lead-to-sale conversion rate.
Requests That Don’t Reflect Development Realities: Without understanding the intricacies of digital product development, business teams may request features that are complex and time-consuming, often resulting in delays and disappointment if the final product doesn’t meet expectations.

In short, the “business demands, technology implements” model limits the effectiveness of product and technology teams, hinders innovation, and ultimately falls short of delivering meaningful business results.

The Solution: Empowered Problem-Solving Teams

Instead of dictating solutions, business teams should present technology teams with business challenges. When teams work together to understand the problem and experiment with possible solutions, they can deliver impactful results. This model relies on close collaboration, with the product team aligning with users and customers to identify needs, generating hypotheses, testing solutions, and implementing only validated ideas.

This is the essence of an empowered product team, a model that Marty Cagan advocates for in building high-performing product teams.

Case Study: Lopes Labs and the Transition to an Internal, Outcome-Focused Team

At Lopes, we implemented this model with remarkable results. When I joined the company, the Lopes Labs team was split between internal employees and external contractors. Here’s what we observed:

Contractors: External teams were primarily tasked with delivering features and functionalities. They reported on the number of hours worked or features delivered each month, focusing on output rather than outcomes.
Internal Team: The internal team, however, was oriented toward business results. They focused on metrics like lead generation, viewing features as a means to an end, rather than the end itself.

When I analyzed the costs, I found that both external and internal teams had comparable expenses, with contractors being slightly more expensive. We decided to phase out contractors, gradually replacing them with internal hires.

The Impact of the Transition

As we transitioned to an internal, outcome-focused team, we saw a remarkable shift in our metrics. One of our key goals was to increase digital leads for real estate agents. Here’s what happened:

Stagnant Lead Generation: While we had contractors delivering features, the number of digital leads barely increased. The internal team struggled to drive improvements because the contractor team was focused solely on feature delivery.
Growth in Leads After Internal Transition: In Q2 2021, with the team nearly 100% internal, we saw a steep increase in digital leads. The internal team, now fully aligned with the goal of driving results, delivered solutions that significantly impacted lead generation.

This shift underscored a key insight: when teams are empowered to focus on business outcomes, features become tools for achieving results rather than an end in themselves.

Benefits of an Empowered Product Team

Increased Alignment with Business Goals: With an outcome-focused approach, teams align more closely with core business objectives, delivering measurable results.
Stronger Ownership and Accountability: Product and technology teams, responsible for the entire process—from problem identification to solution—feel more accountable for the outcome.
Improved Collaboration: By focusing on problem-solving, business and technology teams work together toward a shared goal, fostering a collaborative environment and reducing friction.
Agility and Adaptability: Empowered teams can test ideas quickly, adjust based on feedback, and iterate, reducing time-to-market for valuable solutions.
Better Employee Engagement and Retention: Team members, engaged in meaningful work, are more motivated and likely to stay within the organization.

Implementing an Empowered Product Team Approach

Shift the Focus from Solutions to Problems: Encourage business teams to bring problems to technology, rather than pre-defined solutions. For example, instead of asking for a specific feature, they should present a goal like increasing engagement or reducing churn.
Develop Cross-Functional Collaboration: Empower product and technology teams to work directly with business units. Involve them in understanding the problem and brainstorming solutions.
Set Clear Outcome-Oriented Goals: Define success metrics that reflect business impact rather than output, such as conversion rates, revenue growth, or retention improvements.
Reduce Dependency on Output-Driven Teams: Whenever possible, shift from outsourcing or contracting teams focused solely on feature delivery. Build an internal team invested in the company’s success.
Foster a Culture of Experimentation: Allow product teams to generate hypotheses, test them, and iterate based on results. This builds a learning culture that is adaptable and resilient.

Conclusion

Transitioning from a “business demands, technology implements” model to an empowered problem-solving approach unlocks the full potential of digital product teams. This model, centered on collaboration, ownership, and accountability, enables technology teams to deliver impactful results aligned with business goals.

Empowered product teams, focused on outcomes rather than outputs, can transform how a company approaches digital solutions. By working together on problems rather than predefined solutions, product and technology teams drive real, sustainable growth and create long-term value for the organization.