Let’s face it, most companies are not product-led. They might use technology and agile methodologies, but they don’t have a true product management function. A large part of this is because 1) it is hard to make changes in established businesses and 2) leaders don’t understand the value. In this article I’ll quickly summarize what product-led means and then provide an analogy you can use to explain the difference between what you most likely have now and the benefits that being product-led can provide.
What Does Prodct-Led Mean?
Melissa Perri did a great job of explaining what product-led means in her book Escaping The Build Trap.
Companies that optimize their products to achieve value are called product-led organizations. Being a product-led organization is about ruthlessly focusing on solving users’ problems to drive business value. It’s about optimizing value to the users and business by asking: how do I maximize business value and how do I maximize customer value? It’s not about how many features can be shipped. It’s about what goals/outcomes did we achieve. It’s experimental by nature. And it’s driven by continuous improvement.
The Perfect Analogy
A Sales-led organization is like an individual who has a personal chef. Whenever they want something, they can ask the chef to make it and the chef will do it without question. Depending on the ingredients in the dish, the time and cost might be impacted, but at the end of the day the chef will cook what is requested. This is great on a small scale, but not practical on a large scale. The sheer cost, space, time, and resources it would take for every person to have their own personal chef is not feasible. And if you tried to share a chef, there are still significant bottlenecks because there is no consistency. The chef is trying to cook as much as possible as fast as they can because there is so much demand and because the chef must cook so many different things the quality of each dish decreases which leaves the person unhappy. In time the person who hired the chef gets frustrated and fires them — not a good outcome for anyone.
In case you didn’t figure it out, the individual is the stakeholder or sales team and the chef is the technology team. So why is this bad? It is not scalable, feasible, or financially viable. There is no greater vision or alignment. Things are a mess and everyone is reactive, yet this is how many businesses operate.
Product-led organizations are like high-end restaurants. They require an investment at first, but ultimately lead to more successful outcomes. First off the entire team understands the values and mission of the restaurant, what they serve, why, their individual responsibilities are, and understand they need to work collaboratively to serve their guests. They have carefully considered the perfect combination of dishes to offer their guests. They work with skilled individuals to determine the wines that best pair with the dishes. They ensure the plating and presentation is top-notch. They ensure there is a solid business model supporting their offering so they can continue to operate for the longterm. They don’t need to make custom meals for each guest because they put in the time and effort to optimize their menu through rigorous testing and refinement. To gain insights and feedback they regularly have specials, so they can see what appeals to customers and improve their menu. Multiple members of the staff regularly interact with the guest during their meal to ensure their experience is perfect and based on any feedback provided, make improvements. As the restaurant gets more traction and guests, they generate more revenue allowing them to open more locations who create a different menu to provide guests with more options.
Sounds great right? The restaurant is the product that is composed of features (dishes). There is regular testing (specials), the staff work cross-functionaly to achieve value driven outcomes. The feedback from users combined with financial metrics and other success metrics allow the team to know what is working and what is not. Ultimately working in this collaborative manner allows the business to succeed, grow, and provide value. This is how a product-led company and a strong product team operate.