Just as a farmer can’t grow a thriving, highly productive garden without fertile, nutrient-rich soil, it’s not possible to have a successful product-led organization without creating a product-led culture. To make sure we’re speaking the same language, let’s level set on some brief definitions.
Product-led organization: a business that makes its products the vehicle for acquiring and retaining customers, driving growth, and influencing organizational priorities.
Product-centric organization: a company that focuses on product innovation for its own sake without necessarily considering customer needs. They fall in love with what they are building rather than seeking to deliver value. This is NOT the type of organization discussed in this glossary entry.
Product-led growth: a specific growth strategy in which access to the product is the primary sales tactic. A product-led organization may or may not use this approach. Conversely, a non-product-led organization may decide to try this approach as an acquisition channel.
Looking again at the term “product-led organization,” there is an important point not to be overlooked that directly relates to the discussion of a product-led culture. The scope of this term is broad – as broad as the organization itself. The focus is not on a squad or a team or department but on the entirety of the organization. It’s not possible to have a product-led organization unless the entire company has adopted a product-led culture.
So, what does that mean? What are the characteristics of a product-led culture? There are four that stand out:
- Senior leadership builds the company strategy around a well-understood – and respected – product vision.
- Teams focus on outcomes rather than output.
- A learning mindset permeates the organization.
Senior leadership builds the company strategy around a well-understood – and respected – product vision
In a product-led culture gives product leadership a central role in defining the company strategy. As noted by the French National Convention in 1973, Winston Churchill in 1906, Peter Parker’s Uncle Ben in 1962, and many others, “with great power comes great responsibility.” In this case, it is the responsibility of product leadership to define and articulate a product vision around which a strategy can be built. The product vision serves as a guide and reminder to all stakeholders involved in the product’s development, marketing, delivery, and support (i.e., everyone in the company) about the shared objective they are trying to achieve. Using this vision, executives can define strategies and investments necessary to achieve the vision, product squads can build roadmaps, engineering can determine necessary skillsets, marketing and sales can build go-to-market plans, and support can create operational models.
An explicit endorsement of and implicit respect for the vision is central to this type of cross-functional alignment. Without this respect for the product vision, marketing aims at the wrong market segment because it is easy to reach, sales promises features that are outside the vision, and engineering fails to assemble the right team to deliver. In a product-led culture, everyone gets on the same page, marches to the beat of the same drum, and rows in the same direction – a page, beat, and direction established by product leadership.
Teams focus on outcomes rather than output
For a company that has built their strategy around a product vision, everyone is depending on that vision being the foundation for financial success. Simply shipping the next product version (output) isn’t enough. There needs to be evidence that the evolution of the product is producing results (outcomes). Who cares if a new feature was shipped if it doesn’t result in increased adoption, greater frequency of use, improved conversion from trial to contract, or any one of many other measurable outcomes that shows progress.
Companies achieve an outcome-oriented viewpoint when they are problem-focused rather than solution-focused. Any given output is only a potential solution. If the output fails to solve the problem for which it was intended, the problem remains. By not being wedded to any specific solution/output but remaining focused on the problem, product-led cultures keep their attention on outcomes, or resolutions of problems. Don’t celebrate the work. Celebrate the result.
In a product-led culture, this outcome-oriented mentality isn’t limited to the product team itself. Focusing on outcomes becomes a way of looking at all the work that is getting done across the organization. For the sales team, this perspective comes naturally. No salesman ever got paid more than the bare minimum just for knocking on doors; it’s the deal that matters. A product-led culture instills this thinking throughout the company. Marketing doesn’t ask itself, “How can we make this email better?” They ask themselves, “How can we increase activation?” Customer Support doesn’t say, “Our users need this new feature.” They say, “Our users are having problems with x. How can we help them solve that?”
A learning mindset permeates the organization
The previous section describing a focus on outcomes over output may have inadvertently suggested that focusing on outcomes is easy. It isn’t. Sometimes, you don’t achieve the outcome you were hoping for. Sometimes the outcome is completely different than what you expected. Or, sometimes you get no measurable outcome at all and ask yourself, “Why did we do all that work?”
When these disappointments happen, “hold someone accountable” is an all-too-common response. A product-led culture, on the other hand, recognizes that not every bet pays off . Sometimes, you have to keep trying to get the outcome you are striving for. The key is to learn as much as possible as inexpensively as possible. That way, the big bets you place have the greatest chance of success.
Modern product teams achieve this learning through smart user research and experimentation. They study user needs and develop a deep understanding of the problems that their target users need to solve and then come up with ways to evaluate potential solutions through experiments that are either low-cost (e.g., prototypes) or at least low-risk (e.g., limited releases for A/B testing).
Product teams aren’t the only ones who experiment, however. Marketing can perform A/B tests of different versions of activation messages to subsets of the audience to see what language results in the highest conversion. Sales can evaluate the effectiveness of different promotions to see which one is most effective. Customer success can trial a new onboarding process manually before investing in automation.
In a product-led culture, teams recognize the importance of learning and continually ask themselves questions like:
- What don’t we know?
- How can we learn more?
- What did our failures (and successes!) teach us?
- What should we try next?