This is a transcript of episode 223 of the Troubleshooting Agile podcast with Jeffrey Fredrick and Douglas Squirrel.

Jeffrey defines “product-led” organisations and contrasts with “commercially-led”, “project-led”, and “technology-led” organisations. Squirrel disagreed with the verb “led” as it could leave out important opportunities to bring everyone in on a product-minded culture, and we settle on “product-aligned” as a better way of describing an effective end state.

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Listen to this section at 00:11

Squirrel: Welcome back to Troubleshooting Agile. Hi there, Jeffrey.

Jeffrey: Hi, Squirrel.

Squirrel: We had a fascinating joint experience this past week that I thought would be fun to talk about, because I think we might disagree about it. How would that be?

Jeffrey: I think that sounds great.

Squirrel: Excellent. So we do some coaching together and one of our clients that we work with together asked us about this concept, if we could define it and tell them all about this idea and how they could implement it. The idea was that of being a product-led business. Jeffrey, you had all kinds of thoughts on this one.

Jeffrey: Yeah, this is a very live topic for me because when I’m not consulting, the company I’m working at is going through a similar transformation: becoming a product-led company. It’s a relatively new company formed by bringing together others through acquisition, and one of them that I had been with before the acquisition had very much not been a product-led company, had been a very commercially-led company, which is one of the alternatives. This change to being product-led is something I’ve been through before and generally am in favor of. So yes, this was a topic I care a lot about and it’s one that’s live for me in my day-to-day, and I was very excited about it.

Squirrel: I don’t think we explored it fully in front of our joint client, but it was interesting because I’m allergic to the phrase. The more I hear it becoming more prevalent, the more I get allergic to it. It’s not because I disagree with it, it’s actually because I agree with it too much. So I thought there would be all kinds of interesting stuff there.

Jeffrey: Right. So you’re allergic to it? How could that be? It seems such a nice phrase. What’s wrong with “product-led?”

Squirrel: It doesn’t go far enough. But let’s help our listeners, Jeffrey. Would you mind first just giving your really nice definition of the three options, and then I’ll say why I think that option doesn’t go far enough?

Understanding the Options

Listen to this section at 02:15

Jeffrey: Sure, I’ll mention the three most common ones and I’ll actually add a fourth. In my experience, I’ve always worked at software companies in the sense that we’re making products to sell to people. In these various startups, there’s usually three alternatives for how companies are organized and run, and one is product-led. But this is actually the least common in some ways although there are some caveats. I’m typically talking about once you get to the size of about between 20 to 50 people, these company dynamics start.

Squirrel: But they can go on to when the company is very large. Our joint client is much, much larger than that.

Jeffrey: That’s right, this can continue on at any scale. But as to the other two alternatives I mentioned one already: commercially-led. This is pretty common in early stage startups—and later as well—when they just say “everything is subservient to sales.” This is when you’ll see developers on Twitter complaining about deadlines just imposed upon them. That happens because the logic is, “we have this really important client, so we promise them this feature to get the sale. And now developers, you need to deliver this in three weeks, because they’ve signed the contract, so now you need to deliver.” That’s one of the symptoms of a commercially-led organization: often they’re selling before they actually have the product.

Squirrel: Yeah, to get the sale. That’s the motivation. Your aim is get the sale, whatever you have to do. “Hey, we have to wash their windows and their windows are really dirty. So here’s a cloth.”

Jeffrey: Yeah. Talking about things you’re allergic to, I’m very much allergic to doing this. I always say “sell what we have.”

Squirrel: There’s a time and place for that outlook. There are places where it can work and where it’s needed.

Jeffrey: That’s right. But it’s not the normal case. It’s very common because it seems like a natural thing to do. “Cash is king, we need to have revenue.” It seems very natural to fall into being commercially-led. Now, the other one that’s common—less common as you get larger, it’s more common earlier—is to be technology-led. This is often the case where people are talking about how cool it is, “we have this great new release coming up. It’s going to be so neat. we have this amazing architecture, we totally scale now.” All the discussion internally is about the technology. This can be common when you have a strong technical founder, and they often make the culture of the company focused on how neat the technology is. Now, there can be some advantages to this if you’re trying to bring in some breakthrough technology, but it can have the challenge that it’s often not aligned to the market. So there’s some advantages to this, but it is one of the alternatives to being product-led. Product-led being where I usually think people should end up. We’ll talk more about product-led, but I do want to mention the fourth.

Squirrel: Well, just let me say about that one. So the first one, you were motivated by sales. You were trying to get the sale. In the second one, you’re motivated by the “wow.” If people say “wow, that’s amazing,” that doesn’t mean they necessarily buy. It just means they say, “wow.”

Jeffrey: Yes, exactly. Often the people saying “wow” are people internally, it’s often the ones who’ve done the work who are patting themselves on the back saying, “wow, didn’t we make an amazing thing?” So it can be a lot of fun. There’s a natural attraction to this among the engineering and technology teams to be really excited about the fun, cool, exciting technology they’re putting in place. So I’ve mentioned product-led, technology-led, and commercially-led, but I think it’s important to say that in the larger software world, you see a lot of traditional I.T. organizations talking about moving from project to product. In fact, you’ll find a book of that name. So this idea of reorganizing how they think about what they’re building as a product mindset when they go about developing their internal projects. Now I say this is I.T., but understand these can be companies who have very significant software components. So it could be something like Walmart or American Airlines, which aren’t known in the world as software companies. But of course every company is becoming a software company to some extent. There’s been a large trend among these organizations to look at the advantages of having a product mindset. So sometimes when you hear a product-led, occasionally that’s coming out of these non-product software organizations.

Squirrel: Got it. Okay, so now we’ve got the four different types. We’ve got product-led, which we haven’t quite defined yet. We’ve got commercially-led where you’re saying, “I want the sales;” we have technology, which is “I want the ‘wow;’” and we have project-led which I guess is motivated by “we need to get a thing done.”

Jeffrey: Yeah, “get this thing done, here’s your deadline,” kind of traditional I.T. or technology as almost a service desk you know, servicing the business. I would kind of like to say business-led, but there’s often such a large chasm between the two. It’s really within the development organization in these areas because what you’re doing is defined by the project, and you can almost be project management-led.

Squirrel: I was talking to somebody who said that they’d been involved in projects that had lasted for 13 years. That’s the sort of thing I think that we have in mind here, that it kind of takes on a life of its own.

Jeffrey: Yes, absolutely. So I would call it project-led as a way of capturing the mindset.

Squirrel: Indeed. So how would you then characterize product-led? That was what our joint client asked us: what is this thing? How do we do it? What does it mean?


Listen to this section at 08:22

Jeffrey: Yeah. So I come to this as a long-time product person. When I come to product management, I talk a lot about “whole product management,” which is kind of end-to-end everything we’re thinking about the product from our strategy through to how we’re going to bring it out to the market, how we’re going to sell it, how we’re going to market it, to how we’re going to support it after the sale. So the whole lifecycle of the product. I think about being a product-led organization as thinking beyond just the development of the product, you’re thinking of the whole lifecycle. This is why I have a preference towards this product-led approach: you’re thinking about the difference you’re going to be making in the world. You’re thinking beyond the borders of your company, beyond the borders of any one function, and saying “we need to consider the whole lifecycle and the whole impact. What is it we’re trying to accomplish? Why do we think it’s going to work?” It’s closely aligned to strategy, and I think this is most aligned to the product function.

Squirrel: So what question are you asking yourself mainly when you’re being product-led? It’s not “how can I make a sale,” and it’s not “will this be a make somebody say wow,” or “will this satisfy the need of the 13 year zombie project?” What is it you’re asking yourself? What position in the market will it give us? What users will think?

Jeffrey: It’s the end state. “What difference is this going to make in the world,” is how I’m thinking about it. We have our vision in mind, our end state we want to reach, and what are the steps we need to make to achieve that end state.

Squirrel: Great! So now let me say a bit about why I’m allergic to that, because that sounds wonderful, right? Well it is wonderful. The problem that I have with the phrase “product-led” is captured nicely by the illustration that our joint client had: a picture on a slide which showed a great big circle which had the word product in it, and two smaller circles, commercial and technology underneath it. And the strong sense I got from that—which I often get from people who who talk about this in a more simple way—is that our product organization will squash the technology and commercial organization under their feet. It will it will take over, that we will listen finally to our people who have the titles of product manager and head of product and things like that. We will take their direction and they will tell us what to do. They will lead us. That’s the problem I have with the phrase, not with the actual meaning. So the thing that I would like to see in an organization that wants to move from less successful models such as the other three that you described, Jeffrey, I want to see that they move to a product-minded organization in which everybody functions that way, in which the end state is commonly understood by sales people who then might not make certain sales because they’re not strategic, by technologists who might not build something that says makes people say “wow,” but does make them reach into their pockets and buy something, and by product people who naturally think that way anyway, but who may have been acculturated into other ways of thinking before, and this would affect customer service and marketing and lots of other folks we might not have mentioned. So that’s why I’m kind of allergic to this phrase specifically, product-led, it sounds too much like a takeover.

Jeffrey: Yeah. Actually, that’s really interesting to hear you say, because it’s not something I had thought of. I think this is how people often think about these: in terms of power dynamics, in which function is the most powerful, and certainly the kind of anti-patterns we kind of described in project-led and technology-led can also happen in the companies that are describing themselves as being product-led as well. They think of this big, muscular, beefy product organization. As you say, everyone feels like they need to just do what product tells them.

Squirrel: “You know what? I’m not going to make any sales this month. We can’t make payroll but we have a really great end state.”

Jeffrey: Yep. I think what you’ll often find is people are just sort of waiting for product. “We don’t really know what to do right now because we’re still waiting for product to tell us.” You get the malicious compliance where people only do what product tells them to do, and there can be very negative interactions there.

Squirrel: Especially if there’s long wait times. One of the crucial things is to make sure that the iteration cycle is very fast so you’re very rapidly getting new ideas and course-correcting and involving everyone in getting to the end state that you’re aiming for. Then you’ve got a product-minded organization that’s experimenting and learning rather than maybe a product-driven or product-ruled organization in which the product people go away for six months, make a fantastic plan, and everyone else twiddles their thumbs.

A Question of Leadership

Listen to this section at 13:38

Jeffrey: It’s funny, I have a story of being asked to twiddle our thumbs for a long time. It goes back to the second company I ever worked for: we had just finished this sort of long death march of getting the 1.0 product out, and there was that nineties-style sigh of relief. The thing that software had created had finally escaped to the world and end users. And then we were told, “okay, now product is working on the MRD—the marketing requirements document—so, don’t worry, pretty soon they’ll be done and then you can start working on the 2.0, but they’re working to define it.” But what they had come back with originally had been an inches thick document, and they said “okay, this is what we want in nine months,” which was in no way possible. So then there were long discussions between the product and engineering leaders. Meanwhile the rest of us in development were being told, “don’t worry, they’re working on the MRD.” Now this went on for literally weeks. For me, there was this huge disconnect between this rush we had just been in to try to hit our release date after slipping many times, where every day counted. Suddenly we’re allowing weeks and weeks to pass because we’re waiting for the MRD. Eventually we kind of rebelled in a quiet way and just asked, “are we allowed to start working on things that we know make sense while you guys are all working on the MRD?” And we were allowed, and we ended up kind of self-organizing the 2.0 release by doing sensible things. But what drove our rebellion was this idea that we were just supposed to wait to hear from on high what the 2.0 was going to be. If we had sort of followed the plan, I don’t know even how many weeks would have been lost of waiting. I think that kind of captures that disconnect that you’re describing, as opposed to your term being product-minded. But I can ask you a question about this term?

Squirrel: Sure.

Jeffrey: When you say product-minded, do you think everyone is product-minded? How does this work in practice? What would it mean to be a product-minded organization if I’m not in product management? What does that look like?

Squirrel: Sure. I was just leading an offsite for one of my clients where we were looking at their strategy for the upcoming year and that’s precisely what we were thinking about. “Where are we going to go in the market” was meaningful to everyone in that room and that included the HR person who was thinking about how to define values for the company and to hire the right skills. It mattered to the person in charge of sales who was thinking about how to fire certain clients because they don’t fit the the market that was emerging, the market plan that we were describing, the end state we wanted to be in, it affected customer service and implementation, people who were busy servicing those clients, but who would need to help them to adopt new directions or participate in disengaging from them if they were not the right people for this company. So when it works well—and I’m not claiming that I know anybody who does it perfectly—you get a unified picture. I like to tell this apocryphal story that if you go up to anybody at Space X, say, the finance person who’s processing invoices, and you ask “what are you doing and why are you doing it?” That person can reply, “Oh, well, I’m making sure that our cash flow works and we have enough money to buy the new engines. Then when we have the new engines, we can build the next generation of spaceships, and then we can all go live on Mars.” They all finish with the end state of whatever it is they’re doing, and they can draw all the lines and draw the connections to: “and then we go live on Mars.” Now, whether living on Mars is actually a good goal is a different question. But it’s clearly what Musk is trying to do with Space X, and the theory is that everybody can can draw that line. I doubt it’s actually true, but that would be the perfect product-minded organization.

Jeffrey: All right, I have a new term here, an alternative term to product-minded I want to try out on you.

Squirrel: Try it.

Jeffrey: It came about from this. I was thinking about product-led and that you’re right that people often think in terms of the power hierarchy and the dynamics where they’re squashing or constraining the other organizations. What I remembered is that at TIM Group, we used to have the strengths that we would rate people on. There were two terms that we used somewhat interchangeably: one of them was leadership. So we could say, “were you leading people?” But the one I preferred was alignment. The idea was that if you’re aligning people, if you’re helping build alignment, that actually is what leadership is. So what do you think about a product-aligned organization?

Squirrel: I like it very much.

Jeffrey: What I like about this is I think it captures better the role product plays, which is they will often have a kind of higher level view of what’s happening. It’s easier for them functionally to pull themselves out above the daily fray. But then what they do with that isn’t impose power upon people, but rather facilitate the conversation to make sure the way people are thinking and approaching their jobs are aligned with the product vision, with that kind of end-state thinking, with that “where we want to be in the world.”

Squirrel: I like it. I think that’s great. Now we have an even better term, which I encourage listeners to try out. Thanks, Jeffrey.

Jeffrey: Thanks, Squirrel.