Customers today are adopting technologies at an exceptional pace. For example, while the telephone took 75 years to reach 100 million users worldwide, Instagram took less than three years. In order to keep pace with ever-changing customer needs, organizations must center their innovation strategies around their products. They must create a culture of product-centered innovation by leveraging their most important resource — their employees.
What is Product-Led Growth?
Product-led innovation does not mean growth should be led solely by product managers, nor that the product team should sit atop the company hierarchy (though in many consumer product goods companies that is the case).
Rather, it’s a business methodology where the growth of the organization—user acquisition, conversion, retention, and expansion—is all propelled by the product itself. This type of innovation aligns all the teams across the company around the product.
Characteristics of Product-Led Companies
Product-led companies believe that their success is driven by the quality of their products and customer experience. After all, customers don’t buy technology — they buy products that satisfy and delight them. If a company’s product is subpar, investing more in marketing, sales, or engineering will not be able to offset the customers’ poor product experience.
As such, product-led organizations center their innovation strategies around delivering outstanding product experiences to retain their customers.
Steps to Build a Product-Led Organization
1. Understand Your Users
The first step to building a product-led organization is to align your teams on what problems you are trying to solve. Your company strategy should then focus on delivering a product that anticipates and answers the changing needs of the customers. The key to understanding your customers is to measure their product usage and collect feedback.
A product-led company doesn’t just want to deliver value to the customer at the point of sale, but constantly throughout their user journey. It maintains an ongoing conversation with the customer to iterate on the product to best suit their needs. Your research and other data may indicate you have multiple customer segments with discrete needs, and a product portfolio would thus be best to optimize your market potential.
2. Build a Data-literate Workforce
To process the vast amount of user data across their business, generate actionable insights, and keep products ahead of the competition, businesses must train their employees in emerging technologies such as Artificial Intelligence, Machine Learning, and Data Science.
By leveraging these technologies, organizations can find patterns and draw insights from their data to make better product decisions. Emerging technologies must be used collectively across teams using reliable processes and data to accompany a clear business strategy.
3. Invest in Your Product Management Team
As employers fill more Artificial Intelligence, Cloud, and Data Analytics positions in their organizations, the need to ensure alignment between diverse functions will grow. This is where Product Management comes in. Product Management is all the processes, tools, and people that organizations leverage to coordinate the entire product lifecycle.
It binds together the many functions that touch a product, such as engineering, customer success, sales, marketing, design, and so on. Organizations need people with product management skills and habits of mind to synthesize customer needs, prioritize the right product or service design, and coordinate the individuals and functions involved in the product life cycle.
Innovation is most successful when organizations center their growth strategies around their product. By understanding your customer, building a data-literate workforce, and investing in your product management team, your organization can focus on the most promising ideas, quickly test, validate, and build upon them, and spearhead product and market breakthroughs.
Dive deep and learn more in our Accelerating Innovation & Time-to-Market ebook.
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