Navigating growth: Sales-led or product led?

Rather than making digital transformation your sole objective, it should be viewed as the means to position your company competitively and equip it to tackle present challenges. As evident from this perspective, it is not an endpoint but an ongoing journey that requires regular assessment to align priorities, meet expectations, and deliver incremental value.

In today's rapidly evolving landscape, we have observed the swift unfolding of events. These events can be influenced by external factors, emergence of new market players, or economic circumstances. While management used to revolve around leading in a predictable manner, it has now become imperative to adeptly navigate through uncertainty.

Over the years, companies have focused on digitizing their processes and embracing a data-driven approach. Significant investments have been made in modernizing their technology infrastructure with the goal of improving efficiency. However, it is crucial that any digital transformation initiative is guided by a clear purpose and aligned with specific business objectives. Technology should serve as a catalyst to achieve these goals. Therefore, it is important to view digital transformation as an ongoing journey rather than a final destination.?

Companies that embarked on this transformative journey years ago may find themselves needing to start anew, while those in the midst of the process should pause and reassess due to potential changes in goals. Additionally, the term 'innovation' is often misused. In my perspective, innovation should be ingrained as a core corporate value and a way of operating, deeply rooted in the organizational culture, and achieved through digital transformation. From my viewpoint, digital transformation is an ongoing endeavor that never truly concludes. Even after initial goals are attained or deliverables are accomplished, organizations should transition into an innovation-driven state.

Let's take a moment to pause and contemplate the opening statement before proceeding further What is the goal we want to achieve as an organisation? Typically all organisations are looking to grow, in some cases could be sacrificing margin/profit, in some other cases looking for sustainable growth (it all depends on the phase and or maturity of the organisation).

Although growth is the primary driving force, in uncertain times, and in recession times, it presents greater challenges. I’m not a macroeconomic expert and this is not even close a class on this topic. Nevertheless, it is evident that with limited or more arduous access to funding, organizations will inevitably curtail or scrutinize their expenditures more closely.. This will impact budgets, and economy, finally hitting individuals and their buying power (I know a quick and dirty oversimplification). Without the need to get into details, It might be clear that organisations will look how to streamline processes making them more efficient, reduce cost and increase profitability.

In the last months, I saw a lot of discussions around product growth lead vs sales growth lead products. There are very good points articulated, and of course, it’s a very healthy discussion to have. The ultimate goal is to ensure that operations lead to growth, at a lower cost, making the company more profitable.

The key difference is in the go-to-market strategy. Organisations want to push their products to the market. Those leaning toward a product-growth approach will do it, letting the product speak for its own while those ones traveling into the sales-growth approach, will articulate the benefits and value of their product via the sales teams. I’d argue that this is not a strategy that the company could choose, but a strategy that the company would be forced to lean on, based on the product they build, and the maturity phase they are on.

Allow me to clarify that, from my perspective, both strategies are mutually reinforcing.. Having a good and solid product that addresses current customer needs is key. However companies can not act in the same way, as it depends on the domain and vertical they operate at. Those enterprise products, addressing needs in core processes or organisations, with high levels of technical complexity, and perceived as expensive, typically required longer sales cycles, with different touch points, being? some of them human (the role that the Sales team will play nicely). On the opposite side, there are products that can speak for themselves in other cases, where buying decisions are easier to make, because of the reduced number of involved stakeholders, the lowest budget or solutions doesn’t sit on core processes (where all eyes and put on). There are always hybrid models, where enterprise products are offered in a freemium or trial version, that will help to accelerate this decision process, easing the sales cycle, as the sales team has already half foot on the door in those organisations. Other organisations decide to cover with their own resources top segments on their customer base, and work with partners to provide coverage to the rest of the portfolio.

Typically start ups operate on a shoestring budget, that makes maximising resources the? biggest priority. Having a product-growth lead approach might be the best fit, reducing the cost of sales, getting their first customers at lower cost, while investing to build a more complete product adding more features part of their roadmap.This required to have a friendly/easy to use interface, a clear point of view, a clear solution that address a specific challenge that makes a compelling reason to get the product. Once the organisation grows, and probably growth targets become more aggressive (in case cases incentivise by investors/VC looking after profit maximisation), or because of product growth, sales-human interaction might be needed, in order to guide the sales cycle.

Product-growth and sales-growth strategies are derived from the type of product and maturity of the organisation. Some can argue that this discussion might be similar to when some well known (fortune-1000) companies decided not to invest in advertising, and still are doing very well (Inditex and Zara don't invest in advertisement). And it’s true, it’s about to get the people in, and not to try to put the product out. A product-growth lead doesn’t mean be so focused on building and distributing? your product, that you forget about the customer. I’d say, that a product-growth (applicable to Sales-growth as well) required a big dose of customer-oriented capabilities, as in order to attract people, and get product sold (with or without Sales teams), it’s crucial to be able to address current customer needs and ensure you get their attention.

Thus, both product and sales growth still demand the enduring concept of customer-focus, which may be considered no longer in the spotlight. A company is not a company without customers, as well that an education institution is nothing without students. Put your customer in the middle of what you do, ensure you can address their needs, and build a product that is friendly and a must-to-have will be the foundation. The go-to-market strategy will depend on several factors, but should rest on a good value proposition represented by the product.

Design and build a compelling product roadmap will impact the top and button line of the organisation, therefore the importance of being able to translate requirements, foresee needs and translate them into product features. It’s not only linked to the revenue stream, but marketing, sales, community and ecosystem. Product management was in place for a long time, however, in the last years, due the big boost of digital platforms as products, the demand for product managers and product leadership positions also increased. These teams are the real glue or liaison between business and IT, between the customers and the engineers, that will translate the real world into a product's characteristics. All the above makes it paramount to have this capability in house, especially if our value proposition is a digital platform that addresses customer challenges. What to build, how to do it and understand the go-to-market strategy, is the name of the game. Those that unpack more value, and faster will be rewarded.