Why product organizations win

There are a few things you can observe, that just make it very hard for an organization to succeed. And those “things” sometimes depend on the DNA of founders.

If you are looking at a R&D driven organization founded by a CTO, you will likely have a preference for really cool and deep technical things baked into the development and platform design. Doing things because he can. Maybe a highly scalable platform, maybe highly optimized components. The transfer of translating this into a beautifully designed software is one issue that is typically done well. The transition of building great user experiences around problems the software is supposed to solve becomes more tricky. The flows are not optimized, the canvas the software is operating on is not fully optimized. But more importantly, the priority settings and roadmap planning is likely not driven by sales organization design and the sales organizaton will not be designed optimally.

If you have a sales driven organization, chances are the organization is a lot more focused on delivering features against customer demand (not market demand! Customers that sales people can reach and think they can sell form the market for them, irrespective of actual market structure!). The organization learns how to sell what is there and how to improve the closing probabilities based on new feature add-ons. The entire concept will slow down, however, the holistic development of the platform as a whole, integrated user experience optimized product strategy, with mid and long-term vision being in check. If you have a visionary sales individual, the push ahead towards a desired superiority of the product might also lead to dropping internal integrity and architectural design of the software architecture and clear show stoppers from product management and UX could be ignored for the sake of achieving the sales.

The problem with both is that they can exist on their own. Both the technical rockstar and the sales hero can exist alone, and their survival depends on a very high ego that drives them to overcome the obstacles and draughts on their way. It is absolutely clear that both will not respect someone that is simply not rally “necessary” . The person that tells the rockstar technologist what technology to use and what to develop. And a person that tells the hero salesman on what he is supposed to sell an what he is not.

Then you can have a marketing driven organization. You are easily looking at someone that takes “market driven development” (a pre-90s concept) and “customer development” (was it Eric Ries?) a bit too serious. These companies, while thinking about customer disovery and market-driven development, might have one critical fallback: They listen to the customer too much. And lack vision. You can easily listen to dumb requests and wishes, build and then start to realize you did not solve a general domain problem with a visionary disruptive approach, but you reacted to pains of a measurable market segment and you are falling short on being “beyond” the market.

So sales and R&D driven organizations lead to a squeeze out of the relevance of the in-between ghost that is a product manager. If you add the relevance of lead generation in the process and the marketing and branding teams, it is even more likely that a marketing mastermind will be more likely to influence the sales and technical departments. But also here, a marketing strategy requires a very sober and clear design and thinking on the product strategy.

Surprisingly, nobody of the three personas – sales people, technical people, marketing people – have to learn what the product manager has to learn. It is easy to cheat your way out of learning product management. And it is just not as shiny as crafting an attractive marketing message and having people follow that message.

But in reality, the assymetric incentives of all indidivduals in an organization are best unified and managed from the product management position. If you get product management and are able to retain A talent in tech, sales and marketing, you will have the benefits of a strong unifying function in your hand. With marketing being the mediator between sales and R&D, and product being the mediator between customer-driven development and vision from strategy. If one of the players other than product management is running the show, however, it is very unlikely you will find a A talent product manager and that he will stay and rise in his function of aligning the organization. It is a clear crowding out of a lemon organization (Sales, Marketing, R&D pushing out product management) vs. a product organization.

But if product management isn’t orchestrating the resources efficiently to define and execute an integrated product-channel-sales-feature strategy, the organization will always miss a piece, and everyone will overly try to solve an elephant-in-the-room problem nobody knows how to solve and can solve with his unique view. There will always be a gap. A lack of vector-direction-alignment.┬áChaos and over-utilization trying to get speed and execution and traction. And by all this, you get the side effect that actual CEO work and capital allocation / CFO work is falling under the bus.

You have a try-hard-fail-hard environment where you rely on lucky shots rather than incremental development towards globally optimal solutions to the product-market-fit problem and having the organization fully aligned and designed to execute on the market discovery problem.

And that I think is why greatest companies come out of product-driven organizations.

Disclaimer: Please do not forget that successful companies need Tier 1 / A Player sales people, R&D people and so forth. It is not sufficient to have a great product manageer.

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