Unlock The Power of Product-Led Teams

By MARTIN NORTH

With organisations debating and adopting competing strategies such as Sales-Led, Marketing-Led, or Customer-Led, learning about the benefits of being Product-Led might seem like an unnecessary distraction. How many different ways of being “led” do we need? Is this a way for product teams to argue that they should make all the decisions?

But Product-Led is different. Rather than choosing between opposing strategies, it seeks to find a balance. Rather than providing precedence to one function, it seeks to align all parts of the organisation. Rather than giving dominance to a single perspective, a commitment to being Product-Led represents a decision to balance the needs of customer and business, and in so doing, create value for both.

Extensive research clearly shows the costs of product failure and the benefits that flow to organisations that invest in becoming Product-Led. With 40% of new products failing, the cost of product failure is estimated at over $1 trillion per year. However, companies that become Product-Led have 2x enterprise value, a 1.8x growth rate and a 1.5x revenue multiple.

Product-Led seeks to minimise the risk of product failure and maximise the value that its products create. This does not mean all decisions are made within the product team, and this is not a grab for power by frustrated product managers. It means that all parts of the business transform how they think and perform to enable the business to put modern Product Management Practices at the core of how they drive value, not only with product teams but across all business functions. Product-Led organisations strike a balance between creating value for customers and value for the organisation.

The Three E’s

When considering organisational capabilities, one approach to categorising potential areas for improvements is using “the three E’s”:

  • Efficiency – doing more with less
  • Efficacy – achieving a planned outcome
  • Effectiveness – achieving the right outcome

When developing a product, you could aim to be efficient by utilising your resources wisely and creating output with minimum waste​. You could focus on being efficacious (a term used in medicine to describe a drug that does what it’s supposed to), making products that function as intended, free from defects​. Or your goal could be effectiveness – creating products that create value.

These are not exclusive choices, and it is essential that every area is addressed. We cannot succeed if we waste resources, if our products don’t work, or if they don’t create value. But there is a limit to how efficient or efficacious any organisation can be. Your waste can never be less than zero, nor can your defects or downtime.

There is no limit to how much value
you can create.

The power of being Product-Led is enabling teams that make products with minimum waste​, make products that work as expected, and make products that create value. If a typical development team costs over $2 million per year, then the cost of that team not being effective is all of that $2 million. On the other hand, every improvement we make to our effectiveness acts as a multiplier, converting investment in efficiency and efficacy into growth. The only pathway to sustained competitive advantage lies in maintaining efficiency and efficacy while striving to create greater value. The potential return on investment for being Product-Led is virtually unlimited.

Cycles Of Failure

Being Product-Led starts with the balance between customer and organisational value, but that is not where the balancing act ends​. In every area of product management, there are competing pressures that must be balanced​. If we fail to find that balance, we risk getting trapped in cycles of failure that destroy our effectiveness. However, traditional ways of solving problems force us out of balance.
 
A leader identifies a problem and declares “something must be done!”. The bigger the problem, the more extreme and less balanced the proposed solution. Unbalanced solutions lead to unintended consequences, as important areas are neglected. Problems begin to mount until a leader declares “something must be done!”. When looking for the root cause of any problem, the best place to look is usually the last solution. We need to break the cycle of failure​.
 
These are the six areas that Product-Led organisations need to focus on:
  • Strategy & Roadmap – developing a bold vison and strategy to deliver outcomes that are clearly linked to business strategy​.
  • Structure & People – creating the right organisational and product structure, and hiring and onboarding the right people with the required skills.
  • Practice & Process​ – implementing product management and capability frameworks across your team to achieve business outcomes.
  • Discover & Deliver​ – implementing continuous discovery and iterative delivery to solve valuable customer problems that also deliver business value.
  • Measure & Respond​ – measuring what matters and creating insights that drive decision-making in changing environments.
  • Align & Transform​ – aligning the entire organisation to balance customer needs with business benefits to achieve product growth.
While each of these areas is important, as your organisation grows and evolves, different areas will be more important for us to focus on at different times. We must balance our efforts across all areas, ensuring none are neglected. But we also need to find a balanced approach within each area. We have all observed cycles of failure that trap organisations​ and prevent us from finding balance. Here are some examples:

When We Fail to Balance Predictability and Adaptability

When developing Strategy & Roadmaps, we need to balance between predictability and adaptability​. If we overemphasise predictability, we force teams to adhere to rigid feature-based roadmaps and reward them for completing tasks instead of creating value.​ To correct this, we overemphasise adaptability. Teams set their own priority, but don’t align with each other or business strategy until someone says…​ “We need more predictability!”​.
 
To be effective, we need to build trust with customers and stakeholders over time, while also responding to changing circumstances. This is only possible if we successfully balance predictability and adaptability.

When We Fail to Balance Restructuring and Recruiting

When developing Structure & People, we need to balance between restructuring and recruiting​. When products are underperforming, we may restructure teams – creating new roles and areas of responsibility. However, if this is done without first understanding the capabilities required and gaps in existing capabilities, we create anxiety and frustration. Valuable team members forced to adjust to new responsibilities without support may decide to leave the organisation. ​

​To compensate for increasing attrition, we switch the focus to urgent recruiting. We recycle position descriptions to urgently find replacements, deliberately filling roles with people with the same capabilities as those they are replacing. Have you ever started a job and been introduced as “the new …” somebody? They are literally hoping you will be just like whoever you are replacing. But they were unhappy and left!​

After a brief period of enthusiasm, the existing issues reappear because they haven’t been addressed. With performance continuing to fail to meet expectations, inevitably the debate begins again about team structure.​

Restructuring teams and recruiting new team members both come at a cost. If we fail to balance the two, we reduce our effectiveness and prevent the expected benefits from being realised.

When We Fail to Balance Compliance and Flexibility

When developing Practices & Processes, we need to balance between compliance and flexibility​. Over-emphasis on compliance results in rigid processes that can’t account for the differences between products and teams. Teams waste time attempting to comply with prescribed ways of working that don’t add value. Resistance to processes eventually undermines compliance. Procedures are abandoned to allow teams the flexibility to deliver as they see fit, but this leads to inconsistent resultsand inconsistent communication with stakeholders who will ultimately insist on greater compliance.​
 
If we fail to balance compliance and flexibility, we reduce our effectiveness as opportunities to create value are lost while teams fight to comply with processes that are not fit for purpose, or lack of process leads to inconsistent or misaligned outcomes.

When We Fail to Balance Research and Testing

When focusing on Discovery & Delivery, we need to balance between research and testing​. If we spend too much time doing research, we risk never delivering a product to market. Frustration with the lack of delivery leads to a strategy of building and testing. Instead of validating ideas through research, every idea is considered worth building with the assumption that it will then be tested​. Poorly designed and unfinished products that are being “tested” lead to pushback from customer-facing teams who are in direct contact with customers, and the emphasis returns again to research.
 
Efficiency, efficacy and effectiveness can all be impacted if we fail to get this balance right, as we waste effort on developing features that don’t add value, release poor quality products to market, or fail to fully understand customer problems.

When We Fail to Balance Data and Intuition

When developing our capabilities to Measure & Respond, we need to balance data and intuition. If we over-emphasise the use of data, we can get stuck in analysis paralysis – unable to make decisions where there is any uncertainty – or perform analysis to support decisions that we know have already been made. In order to move faster, we start by-passing requirements and working on pet projects with executive sponsors that are “obvious quick wins”.​ When these initiatives fail to achieve the desired outcomes, we impose new criteria for using data to make decisions.​

Failure to find a balanced approach to analysis reduces efficiency and effectiveness as we waste resources attempting to justify low-risk decisions – or adding features that don’t add any value – which analysis could have helped us avoid.

When We Fail to Balance Pragmatism and Principles

When focusing on Aligning & Transforming, we need to balance between pragmatism and principles.​ If we are too pragmatic, we start to compromise in advance, entering a state of learned helplessness. We keep working the same way without any expectation of success. ​But this level of frustration can’t continue indefinitely, so eventually, we decide that something has to change and take a stand on Product-Led principles. We insist that there is a “right” way to do things and a “wrong” way, arguing from ideology without considering our organisation’s unique context.​ Rival camps form around alternative approaches, and delivery slows. In a bid to unblock decision-making, leadership forces through compromises. With our influence diminished, the status quo is re-established, and we go back to our old ways of working, still believing there is a better way.

If we fail to balance pragmatism and principles, not only do we fail to increase our effectiveness by being Product-Led, but by reducing our credibility and influence, we make it less likely that we can achieve these benefits in the future.

Breaking The Cycle To Become Product-Led

How many of these cycles of failure have you experienced? Maybe all of them? To become Product-Led, we need to break these cycles​. We need to stop reacting to issues with simplistic solutions that have already been tried and failed​. Instead, we must enable balanced approaches to solving problems that allow teams to become Product-Led​. Here are some suggestions for steps you can take in each area to escape the cycle:

Outcome-Based Planning

To balance predictability and adaptability, we need to implement outcome-based planning. Outcome-based planning provides predictability on what improvements the team is building towards while leaving the details of the solution to be developed iteratively through continuous discovery. We maximise effectiveness by ensuring customers trust us to deliver value consistently, not just occasionally, and allowing plans to adjust as teams perform discovery or when circumstances change.

Planning is a promise – “give us x resources and we will deliver y result”, but no one should expect a blank cheque ​in constrained economic conditions. If the sole purpose of the Product-Led team is creating customer and business value, that is what should be on the plan.

You must connect value to product
outcomes and communicate a plan
to achieve that outcome - this is your roadmap.

There are many good resources on outcome-based planning online, but if you understand the balance that this approach is trying to create, you are much more likely to be successful.

Capabilities Assessment

To balance restructuring and recruiting, we need to assess gaps in capabilities. By understanding the capabilities you have and the capabilities you need, you can have a transparent conversation about where to focus development and what skills you should be looking to recruit​. When we invest in restructuring teams or recruiting new team members, a better understanding of current and required capabilities will ensure a return on this investment in the form of increased effectiveness.

If you are using the same generic requirements to define multiple product roles, it may be that you haven’t considered what capabilities each role actually requires​. But no matter how clearly we define the requirements for a role – we fill that role with a person who will have their own unique strengths and weaknesses​. Developing capabilities should be a focus for every organisation, but recruiting will always be necessary to grow teams and acquire new capabilities.​

You must start with an environment of safety and trust – if you don’t have this, this should be your ONLY focus​. Within this environment, your current capabilities need to be assessed. An assessment tool such as the Association of Product Professionals Proficiency Framework can be used to identify strengths and areas for development​.
Once you understand the capabilities you have and the capabilities you need, you can have a transparent conversation about where to focus development and what skills you should be looking to recruit​.

A Shared Commitment to Adopting Practical Frameworks​

To balance compliance and flexibility, we need to gain shared commitment to adopting practical frameworks. By getting buy-in from all stakeholders on frameworks that target known issues and can feasibly be implemented, we improve outcomes without creating an unnecessary burden for our teams​. The right tools implemented in the right way boost effectiveness through consistent performance, properly aligned with strategy, while avoiding the frustration created by unnecessary bureaucracy.

If you’re not using any product framework, pick a problem area and review common approaches – you won’t have any trouble finding potential solutions​. If you are using frameworks – are they actually helping to create value? Do all stakeholders agree on the value the framework is adding?​

​Start with a single area of practice and recommend a fit-for-purpose framework and lean processes and get commitment from everyone involved​.

Don’t assume the tool is the issue. If you love how you work but are having trouble with scale – then a product management platform is a worthwhile investment. But if there is a reluctance to use a framework or it’s not giving stakeholders what they need – a new SaaS platform will not solve the problem.​

​Using any framework requires ongoing realignment and coaching – make sure everyone understands why a framework is being used and how to use it, but if something is not working, adapt the framework for your needs​. Avoid the latest fad or changing just for the sake of changing. This will only reinforce the cycle of failure we’re trying to break.​

Continuous Discovery

To balance research and testing, we need to implement continuous discovery processes that include both. By breaking the discovery into small steps and progressing from research to testing as we learn, we avoid assuming customers can always tell us what they want or wasting resources building features no one values​.

Effectiveness and efficiency are increased by delivering products that create value, without over-investment in either
research or development.

Research and testing are both valid ways to reduce uncertainty and risk. The goal is to learn just enough at each step to justify continuing.​ Research could be as simple as talking to a small number of customers to possibly invalidate an idea, but like everything, this has diminishing returns. There is only so much you can learn from asking questions.​

You learn more from testing real products with real customers – but this is more costly.​

If you have one big proposal with one big price tag, then you need to spend a lot to justify the decision. And once you have already invested, there is a risk you might keep chasing your sunk costs, trying to validate the idea despite what your research is showing you.​

Break the investment into small steps of increasing size, and then validate only enough before each step to justify the next investment, and progress from research activities to product testing so that you don’t wait too long to collect real observations.​

Data Analysis to Reduce Risk

Product outcomes cannot be determined in advance – only predicted – so some uncertainty is inevitable.​ Using data as a tool to reduce risk focuses our attention on where there are unacceptable levels of uncertainty that require further analysis, and where the level of risk is insufficient to justify analysis paralysis.​ This ensures data resources are used efficiently only where they are expected to add value, and improves effectiveness by reducing the risk of investing in development that cannot be justified.

You must know your organisation’s appetite for risk, because if you are proposing an idea that is outside of this appetite, you are very unlikely to be successful.​ ​
Because uncertainty cannot be eliminated, we need to be realistic about how much extra certainty is required for a decision to be approved, and what the cost of gathering that data will be. There is no point wasting time and effort performing analysis to support a decision if the result is still likely to be outside of your organisation’s acceptable risk.​​

We need to avoid thinking that decisions can only be made if supported by data analysis. There is nothing wrong with using our judgement. It is unavoidable. We use our judgement when deciding whether we agree with what our data analysis reveals. ​

Adapting Product-Led

To balance pragmatism and principles, we must adapt Product-Led principles to each unique context. By knowing when to be an evangelist and when to be a pragmatist, you will build your influence as a knowledgeable expert who also knows how to get things done.​​ The potential benefits of being Product-Led will be realised gradually with less risk or resistance or conflict.
 
Invest time to understand frameworks. They’re not all worthless, and there is no one single “best” approach.

You have to develop your own principles
in order to decide when to
compromise them.

Think in advance about why any principle may not apply to your context.​ ​

Always start with what you believe the “right” way is. Even if you later compromise, you should always begin with a clear explanation of your preferred approach.​ Then focus on feasibility and practicality – ultimately, the “right” way is the way that works. ​

​Don’t try to boil the ocean – you can’t change everything at once.​

If you strongly believe in a particular approach but anticipate resistance, use your relationships with stakeholders to surface potential objections and find potential allies as early as possible.​ If your viewpoint doesn’t prevail, commit 100% to the adopted approach. Undermining the outcome by not offering your full support will not increase your influence on the next decision.​

If your approach is adopted, and other stakeholders resist its implementation – this is also your problem. Again – the only “right” way is the way that works. If an approach fails due to lack of support – then it was the wrong approach.​

Self-Authorise and Start

In order to begin, we may need to authorise ourselves to step beyond the perceived limits of our formal authority. In modern organisational structures, those with the greatest potential to lead change are often not those in positions of authority. If this is you, then you need to give yourself permission to act. In the face of resistance, apathy or the lack of an immediate mandate, you need to self-authorise.​ This needs to come from a place of self-awareness – you must know your skills and limitations – but with this knowledge, anyone in any role can lead change. Leadership describes a way of acting, not your place in a hierarchy.

Being Product-Led enables teams to create customer and business value, but this requires balance in all areas.​ Traditional problem-solving forces teams into cycles of failure where balance is impossible, and how unlocking the power of Product Led teams means breaking the cycles and allowing teams to find balance.​

Take a look at your organisation and look at the areas where you just can’t seem to make any progress. Are you trapped in any of the cycles of failure in this presentation? Or is there another cycle you can see? ​Instead of repeating the same mistakes, think about how one of the balanced actions we’ve looked at today might help you take a first step to become Product-Led​.

About The Author

Martin North

Senior Product Consultant - Brainmates

Martin is a product and technology leader, who loves to solve complex problems. With over 10 years of Product Management experience no problem scares him. To every challenge he applies a deep understanding of customers and partners, his life-long obsession with technology, and a unique perspective on how all the elements of a business model connect in a dynamic system.

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