Can Every Sales-Driven Company be Transformed to Being Product-Led?

The only complication is defining "Sales-driven", "Transformation", "Product-led" and indeed "Product". Everything else is easy!

Today we’re going to go deep on an important question but, first of all, here’s some content for you to bookmark and catch up on:

• My podcast interview with Aakash Gupta about the product leadership job hunt.

• Dean Peters’ hot take interview about some of the further root causes of “Instagram-ification of product management” (here’s John Cutler’s take on the same).

• Dave Ballantyne and Duena Blomstrom recently interviewed me on their People AND Tech podcast. We chatted about how developers and product managers should be the best of friends rather than reverting to silos, and much more. Remember to also check out this interview with Duena on my podcast.

• Here’s the recording of my recent Lightning Lesson with Saeed Khan on the topic of handling sales feature requests (free, but email address required). You can also check out our upcoming cohort course on working with sales teams!

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A message from the sponsor

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So… can every sales-driven organisation be transformed?

I was chatting to Rich Shnieder on my Slack community recently and he posed this simple-looking question.

Here's a philosophical question for you... Do you believe that every sales-driven organisation can be transformed to being product-led, or are some businesses just always destined to be sales-driven?

My first answer was “No!” - but then I had some follow-ups, so let’s dig into them:

What does "Being Product-Led” even mean?

Like many buzzwords these days, the very concept of “being product-led” means different things to different people. Here are some ways I’ve heard it be used:

• The Product Management team is in charge of everything

We have an empowered product management team and any decision that isn’t made directly by them, based on data insights and direct customer discovery, is automatically invalid! If the founders of the company or, heaven forbid, the sales team make a request then the product team gets to “Just Say No”. Anything else just means we’re in a feature factory. I’ve had versions of this precise complaint from product teams before.

• The only thing we have to sell is a product so I guess we’re product-led

We say we’re product-led because that’s the only thing that we have to sell, so we’re de facto product-led. It doesn’t matter how we decide what to build, or who we decide to build it for, we have a product. Job done. Actually, we do have to customise the implementation for some customers and naturally, they all have custom integrations they need. Oh, and if we have to do some services to prop it up we can just hide that service revenue as recurring revenue to keep our investors happy. And, actually, it is recurring because we never stop having to throw humans at individual problems.

• Product-Led Growth (with or without Product-Led Sales)

Product-led Growth (PLG) is probably the thing that most non-product people think about when they think about “being product-led”. This is the deceptively simple idea that products should be able to sell themselves, through mechanisms like freemium models, exceptional self-service onboarding and very quick time to value.

Product-led Sales (PLS) is an extension of this concept into large accounts (who might want a big enterprise deal), where you still acquire people through a PLG motion but use the data from your acquired users to identify those larger prospects that might use the product enough to be worth sending salespeople after.

So what does a “sales-driven” company look like?

The original question asked about transforming “sales-driven” companies into being “product-led”. So what are some clichés about sales-driven organisations?

• Short-term Revenue Obsession

We might worry about OKRs and user experience and retention and feature usage metrics, but the One Metric that Matters in a sales-driven organisation is revenue. Not just any revenue, but this quarter’s revenue. If we don’t get the big deal over the line before the end of the month, it’s next quarter’s revenue, which means we’ve failed.

• Large Deals and Long Sales Cycles

Salespeople are expensive and, whilst some may enjoy spending their time chasing low-value accounts, they’re generally incentivised to go for big accounts. It makes sense, right? Not only are these accounts worth more money but they’re also likely to be impressive logos for the website. The downside is that large deals tend to mean long sales cycles, which means more chances for things to collapse (and more panic to stop them doing so).

• Throwing Everything at Whales

“Whales“ are huge prospects that can make a massive impact on topline revenue, simply due to the size of contracts they are prepared to sign and the budget that they have to spend. As mentioned, they’re also incredibly attractive as proof points and case studies, so there’s some additional benefit for future sales deals. On the other hand, big companies have big demands. They might also rely on procurement-led purchasing with their dreaded list of checklist features. Don’t have feature X? Better build it otherwise you’re not getting to the next round!

• No Feature Request is Too Small

Because we need to do whatever we can to secure revenue, we often get dragged into sales conversations directly or told to build things that are of marginal value to our entire customer base. Product managers like to see themselves as the “Needs of the many” type of people who concentrate on sustainable, scalable future growth. They ask questions like: “Why can’t the sales team just sell what we have?”, “Why does every single new customer contract come with a bunch of ‘special’ requirements?” or “Why did we only find out about them after the contract was signed?" Meanwhile, they keep having to build the features anyway.

• Product Management Team Seen as Short Order Cooks

All of this can lead product managers to feel disempowered and unable to fulfil the “management” part of product management. What chance do we have of defending a product strategy or making good, evidence-based prioritisation decisions if we can’t even defend our roadmap for a quarter without some new demand blowing it up? Our job is simply to do our best to fit everything in and prioritise by either revenue or the volume of the person shouting the demand.

So, what’s a “product-led” company?

When I interviewed Marty Cagan about “Transformed” recently, he said that he discourages the use of the term “product-led” when it comes to talking about transformation. I happen to strongly agree. Partly, this is because of the constant confusion between having a PLG business strategy and a sales-driven business strategy (but still selling a product). The latter does presuppose some behaviours like the clichés above, but does it have to? Surely this is more of a spectrum than a binary?

Let’s keep the term for now and say that some key characteristics of a “product-led” company are:

• The needs of the many outweigh the needs of the few

• We prioritise long-term goals over short-term revenue

• We build based on evidence rather than opinion

• The product management team has a voice at the table

This doesn’t mean that the product management team gets everything its own way. But at least we’re in the room, having good discussions and being seen as partners in the long-term success of the company rather than order-takers being buffeted around on the waves of whoever the sales team speaks to next. And we’re listened to, rather than overridden on every single sticking point.

Can “sales-driven” companies be “product-led”?

It depends. No, really!

Part of this reminds me of my old post about Product versus Service companies and how everything’s a spectrum (BTW,

Maja Voje

used a much nicer version of my chart in her newsletter).

The simple question is… what type of company are we? How are we set up? What do we value? How did we get here? What type of industry do we serve and with what type of product? What are the company’s growth ambitions? What do the investors want?

I recently ran a poll on LinkedIn asking “Which is larger? Your sales team or your engineering team?”. As of the writing of this article, there are still a couple of days left, but look at the results so far:

37% of companies have a sales team larger than the engineering team! How much do you think these companies are set up to be “product-led”? Maybe some of them are, but overinvestment in sales teams means that it’s quite likely that go-to-market expansion will outpace the ability of the product team to provide a product that serves that market well.

So much of this is driven from the top. If the company has been set up by service-minded people, possibly with deep industry expertise but limited product experience, it can be hard. No matter what you try to do on a day-to-day basis, there’s always the threat of a sales team escalation to a sympathetic CEO who just thinks everything should be easy and fast. On the other hand, the best business leaders are the ones who know what they don’t know. They’ve hired product managers and product leaders to look after the product side of the house. They need to trust them.

But, how to engender that trust? You can’t just wave a book at them or talk in buzzwords and catchphrases. You need to engage with them on their level and speak their language. My top tip is always to “find something they already cared about before you started talking to them, and frame it in those terms”. You’re probably not going to persuade a quarterly-revenue-obsessed business leader with talk of OKRs, experimentation or discovery.

Your job as a product manager is to prove to them that there’s a high likelihood of your methods providing superior results to a sales team spraying and praying. The best way of doing that is to build as much capital with your leadership team as possible, do a good job, not be seen as an obstructionist, ride the waves, and take the opportunity of any Overton Windows… those moments where things break that help move the idea of “change” from unthinkable to sensible.

Some companies are highly unlikely to change. This is due to a combination of the mindset of leaders, the dynamics of the market(s) they’re selling into, the maturity of the product and much more. In situations like this, as a product management team, one option is to accept being in a feature factory (as per

Ben Erez

’s point in

Lenny Rachitsky

’s newsletter recently). And, to be clear, there’s no one right way to run a company, and maybe they can be quite successful for a long time without ever “transforming” at all. Very few companies want to be “transformed” for the sake of it. It’s our job to explain why it’s beneficial in the first place.

However, if there is a chance to change things, you should certainly try. It’s important to build whatever coalition of support you can from senior stakeholders and get used to marginal gains. This is a long game and you’re never going to fix everything at once. Even relatively small companies can turn like tankers. You need to pick your battles, and not burn all of your credibility dying on unnecessary hills.

I call this “applying product management to product management” - pick the most important limiting factor and fix that, then move on to the next one. Maybe you don’t get all the way there, but you’ll still find yourself in a better place than if you didn’t try anything at all.

Addendum: Should anyone be “leading”?

To be honest, my strong opinion is that if you have to worry about who’s “leading” anything, then you’ve got bigger problems to worry about than who’s leading anything If your entire company is aligned around what’s important and how to get there, then anyone could “lead” you there. This is supposed to be a collaboration, not a dictatorship.

If one team “leads” and others don’t agree with where they’re being led, fix that! I generally find that misalignment is one of the most important problems to solve in any struggling company.

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