Why Choosing Between Product Models and Team Structures Might Be Your Biggest Decision
Navigate the landscape of product-led and sales-led growth strategies alongside empowered and feature team structures to find your ideal fit in product management.
On multiple product calls this week, four phrases were quite popular.
Product-led growth
Sales-led growth
Empowered teams
Feature teams
Individuals seeking to begin their product career were wondering what type of organization to join while experienced product people debated what the future held.
Let’s start by defining the phrases.
Product-led growth is a go-to-market strategy reflecting a straight forward product that people can try and buy on their own, without needing sales guidance. It arose in the mid-2010s, thanks to tech companies like Slack and Dropbox. Letting your product do the heavy lifting for getting new customers and growing your business is often perceived as more aligned to business-to-consumer (B2C) offerings where product pricing doesn’t justify sales team(s).
Sales-led growth is a go-to-market model where salespeople actively find and pursue potential customers. The sales team works to build relationships, explain the product's benefits, and close deals. This method often involves cold calling, demos, and negotiations. It's common in enterprise, business-to-business (B2B) industries with complex or high-priced products that need explaining or where personal relationships are key to making sales.
Empowered teams are a type of product (organizational) structure where employees are given problems to solve and have the authority to figure out the best solutions. Such teams have the freedom and trust to choose their approach and can drive development forward without constantly needing higher-up ok. They have clear outcomes (goals) and flexibility in how to reach them. Idea being by giving people more control and responsibility, they'll be more motivated and innovative in their work.
Feature teams are a product (organizational) structure that focuses on building a list of features prioritized by executives. Product is often told what to build and how to build it, with success being the output of shipping said features on time and on budget. What to build is conveyed from leaders higher up the food chain. Belief being, feature teams move faster and more efficiently as decisions have already been made by leaders, thereby focusing a majority of team effort on delivery not problem exploration or solution discovery.
When do you see one model vs. the other?
Moving from empowered to feature teams, or vice versa, can arise when there is a change in leadership philosophy. For example, I have seen empowered teams move to feature teams when a new CEO takes over for a product-driven founder and a laser focus is placed on profits over every other metric, even customer satisfaction.
The evolution of product-led to sales-led happens as a company and product matures, typically moving from B2C to B2B in the process. Returning to Dropbox and Slack, both began as product-led. Consumers bought and used the products, touting the benefits to their work colleagues - spreading adoption across the business. As companies realized more and more employees were using their company cards to pay for the same products, they became savvy and asked for enterprise agreements to streamline payments and processing. Enter sales people to manage the ongoing relationships and subsequent requests for enterprise capabilities.
Switching from sales-led to product-led is rare given the significant changes required in both company staffing, culture and processes. Every department and the customer base must be onboard, which makes juggling alignment and change management tricky.
That said, empowered or feature teams can appear at sales-led companies. Both organizational structures exist at product-led companies too. The characteristics, with examples, are as follows.
What are the characteristics of the product team in each scenario?
Just as there are product people who thrive on 0 to 1 opportunities, there also are individuals who seek out established evolutionary (not revolutionary) opportunities. It’s not a ‘right or wrong’ scenario; instead, it simply comes down to personal preference and favored ways of working.
Empowered Teams
In general empowered teams seek autonomy. They thrive on making decisions and taking ownership by applying grit and iteratively pursuing quick action to navigate challenges without needing or seeking rigid processes.
Product-Led Growth
Startup Mindset: Adopts nimble thinking, seeking to draw outside the lines by applying a scrappy, problem-oriented, problem-seeking approach which thrives off rapidly iterating and improving an offering.
Curious George: Embraces risk-taking and learning, encouraging experimentation and prioritizing innovation, leading to the development of new products and offerings.
Sales-Led Growth
Enterprise Evangelist: Prioritizes understanding and meeting customer needs by regularly gathering sales feedback, analyzing market trends, and staying responsive to changes in account preferences and expectations.
Data-Informed Humility: Looks at new information from sales data to inform if a new approach is required to optimize current customer buying patterns. Open to exploring partnerships and integration opportunities to drive new insight and arrive at different product combinations.
Feature Teams
Given the top down approach often associated with feature teams, it’s common to see responsiveness as one of the most sought after team member characteristics. Executives expect rapid follow through of requests, minimal back & forth and swift adoption of organizational processes to improve efficiency.
Product-Led Growth
Business Pragmatist: Sees products and features are a means to an end; what matters is delivering financial value. If the product doesn’t help with that, it should be discontinued quickly and a new approach taken.
Collaborative Communicator: Fosters open communication and collaboration by breaking down silos. Appreciates the sum of collective intelligence and capability surpasses individual contributions.
Sales-Led Growth
Hits the Target: Seeks leadership guidance around features, what to deliver, when, etc. All features are tightly monitored within a set timescale to ensure sufficient revenue contribution towards the organization’s near term goals.
Consciously Controlled: Appreciates enterprise customers balk at changing their ways when a new feature is introduced. Product adopts marketing + sales mindset to inform the delivery timescales to enable customer messaging and training pre-launch.
What type of product organization works best?
If you have been tracking the product space in the last year or two, you will appreciate consolidation is the current name of the game. Roles are blending together as organizations seek to increase efficiency and do more with less. While T-shaped product people who possessed deep expertise in one area and broad knowledge across others was previously favored, the new ideal now is the 'octopus' – versatile individuals with extensive expertise spanning multiple capabilities and disciplines.
The following diagram captures what types of roles you will find in each mix. Please keep mind the specifics will vary based on the company’s size and tenure.
What approach is right for you falls under the “it depends” umbrella. In general, the decision of what type of model to seek out is often based on life stage. As family takes center stage, product people may seek more predictability. The long hours and uncertainty of product-led, empowered teams may give way to a desire for consistency and longer development cycles of sales-led often more enterprise-sized organizations.
Prioritize what is right for you and be proud of your decision. Such an approach signifies maturity and a knowledge of what is a priority for you at this time and in the near future.
For example, for Lancaster, right now a focus on new adventures is top of mind… which signifies a more exploratory, product-led approach to his puppy path.
Enjoy!
Great summary! Is this derived from Marty Cagan's book "Inspired"?