The power of product-led business operations

by Matt Schrimpf

The power of product-led business operations

Product-led growth is one of the biggest themes in the zeitgeist of contemporary software companies. Adopting a product-thinking mindset can transform a company’s ability to delight its customers and grow its top line. Moving away from the centralized, sales-led model of traditional enterprise software companies, innovative players are now recognizing this opportunity and starting to adopt the product-led ethos, leveraging the insights of the consumer internet and adopting efficient, scalable, and user-focused strategies for growth. These companies have not only attracted large numbers of delighted customers; they have also, understandably, attracted the attention of a new wave of founders and venture capitalists eager to build the world-shaping companies of the product-led paradigm.

The product-led mindset does not, however, need to stop at the revenue-generating elements of a company. A fully product-led organization will approach every function in the organization, including operations functions and areas traditionally seen as cost centers, with the same user obsession, drive for innovation, and focus on scalable business value.

Based on our own experience taking a product-led, user-focused approach to building our operations at DevRev, we have distilled several key learnings that can help to guide you and your company on your own felicitous path toward product-led productivity.

Design for your customers

With every operational function, it is important to identify your customers and work assiduously to improve your offering to them (including constituencies internal to your organization). Drilling down further, to serve a customer well, you need to understand the needs of the customer’s atomic unit - the actual user. In employee onboarding, for example, you need to provide a delightful experience not only to new joiners, but also to hiring managers. In event planning, you may have speakers, marketing-analytics experts, and financial arbiters in addition to event planners. All of these groups need to be able to work from the same source of truth (the system of record), and each of them will have their own workflows that need to be built on top of that system. For instance, vendor quotes for an upcoming conference need to feed seamlessly into the planner’s budget plans, the finance team’s approval workflows, and the marketing team’s models for the expected productivity of outreach spending.

The builder must be a user

To have deep empathy for the user experience and to understand the nuances of workflows and edge cases, there is no substitute for being an actual user. When we at DevRev decided to scale up our engagement with the developer community through in-person events, we built an events-management tool that now provides people throughout the company a transparent calendar, a database of relevant logistical details, reporting dashboards, budgets, metrics, alerts, and status updates. Critically, our operations team built the tool not in a vacuum or based on a theoretical view of an event planner’s workflows, but instead in the real-world fray of planning, executing, and evaluating specific events. As a result, we built our ontology, data collection, and dashboards to support both tactical execution at the level of a single event as well as the macro view needed for setting strategy, allocating capital, and maximizing learning. We can easily and reliably answer, for example, essential questions like how many founders we expect to reach in our core geographies over the next six months or how many new users we can attribute to events of one type versus another.

Every operational function needs a system of record

The system of record is the cornerstone of accuracy and transparency that must underlie any product-led organization. It allows you to build trustworthy reporting and to inform your decisions with accurate and complete data. Importantly, operating with a system of record also allows your team to operate more flexibly. For instance, with a robust applicant-tracking system as the system of record for hiring activities, anyone can schedule a candidate’s next interview or answer a question about the candidate’s next steps based on a fully transparent view of the candidate’s activity up to that point. If one member of a recruiting team is out sick or on vacation, then another can easily step in with the benefit of full situational awareness. B2C has gotten this principle right out of necessity, but B2B has somehow still not caught up, continuing to rely instead on labyrinthine information flows rife with misdirection.

Realizing the value of the system of record requires leaders to draw lines in the sand. Every piece of an operating model must be founded on the system of record so that the work of every team member will compound in the product and lead to continuous improvement. In DevRev’s people ops team, we operate under the principle that “If it isn’t in the system of record, it didn’t happen.” All new hires, for instance, need to be managed through our applicant-tracking system since we have numerous automations to support employee onboarding that are dependent on having accurate data in the ATS. We have also learned that managing reporting through automatically refreshed dashboards rather than slides and forbidding the use of manually updated spreadsheets in ongoing processes are powerful design constraints to promote the growth of product. Working within these lines may be difficult initially (more on this later), but doing so is essential to ensure that the organization has a firm product foundation.

Decentralize power and enable the customer to take direct action

Just as most travelers looking to modify a flight itinerary would prefer to make basic changes themselves through an airline website, most standard operational workflows should be accessible to the user directly, allowing specialized team members to focus their efforts on complicated edge cases, situations needing white-glove attention, and opportunities for advancing the product forward on its roadmap. In a product-led hiring operation, for instance, a hiring manager should be able to schedule an interview for herself. At DevRev, our interviewers can schedule their own meetings with candidates in under 30 seconds using a bot in our chat app that lets them identify overlapping windows of availability between their schedules and the candidate’s schedule, choose an interview type and length, book a suitable slot, and send a confirmation email with a fully configured calendar invite to the candidate.

Most organizations orient themselves excessively toward internal secrecy and black-box processes, whether for reasons of internecine politics or merely the momentum of history - “It’s how we’ve always done it.” In stark contrast, the blossoming of Web3 - built on the premise that a decentralized architecture is more dynamic, scalable, and empowering to the individual user than a top-down monolith - shows the promise that new operating models can provide to forward-looking companies.

Start with the product, then build the team

Most organizations begin building a new function by making the first hire, and usually this hire is someone who brings specific experience in the relevant domain. The questions of how that function should operate and what tools should enable the function’s work come next, and naturally, the team’s prior experience will heavily inform the answers. This mimetic tendency leads the organization to replicate the operating model of a status quo that is generally process-anchored rather than product-led.

To build a function that operates differently from the status quo, you need to establish the product-led foundation before you start building out the team. The roles will differ in responsibilities from those in other organizations, the skills and interests of the people who will thrive in those roles will differ, and the success metrics against which you will ask them to perform will differ from the usual metrics. Many of the best hires for these roles, in fact, may be career-switchers coming from entirely different backgrounds, as their open minds and curiosity about a new space will enable them to adapt more quickly to your company’s distinctive way of operating.

Embrace the J-curve

It is critical to resist the siren song of the one-off short-cut when building a product-led operation. Setting up the initial version of a product, tweaking its configurations, and iterating on the necessary steps to complete an end-to-end workflow for the first time require significant commitment and effort. The output benefit, however, is back-loaded compared to what could be achieved through a traditional, brute-force, process-driven approach. In investment parlance, the journey toward product-led productivity follows a “J-curve.”

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In the early phases of the journey, when you are working late into the night to figure out the right tech stack and to iterate on the necessary workflows, there will inevitably come a time when you are tempted to resort to a bespoke spreadsheet or a manual workflow just to get the job done. For those brave souls who pass through the “valley of doubt,” however, this upfront pain and investment will yield compounding returns.

For an operations organization to become product-led, managers in particular must fight the urge to optimize only on short-term output. Because managers are separated from the product-building work of the makers, the J-curve is not tangible to them. They may not appreciate the interim progress of a product under construction, and as a result, they may pass judgment on the efforts of the makers too early, believing mistakenly that their input efforts are not producing sufficient value.

Create a product roadmap to fight the invisibility of the J-curve

Just as the product managers and developers building a software product use a clear roadmap to strategize for and plan the capabilities and features that they will add in the future, operations functions should be approached in the same way. Functions like employee success, legal ops, and real estate can all benefit from an intentional product roadmap to guide their roll-out of new technology tools, their data architecture, and their use of user feedback to iterate on their offerings. Our operations team uses DevRev’s Trails to structure our functions and their sub-components, and each part in our organizational architecture has associated with it a clearly defined set of work items that are prioritized and tracked directly in the platform. With transparency into a product-led function’s architecture and a clearly articulated path forward, the maker and the manager can more easily pass through the J-curve’s valley of doubt.

Track goals, KPIs, and SLAs

A continuous iteration cycle depends on clearly laying out the top-level goals for every function, the KPIs that drive those goals, and the SLAs to which each activity should adhere. At DevRev, we define goals as the highest-order measurable objective for the company. These are typically lagging indicators (outputs), and in general, they should not change frequently. KPIs are intermediate indicators (often inputs) of performance in specific areas that help us either track progress toward our overall goals or achieve them more effectively. We see SLAs as the tactical operating metrics that ensure that we are operating at a customer-service standard (e.g., time to respond to a customer inquiry).

With a product architecture that automatically generates these metrics and disseminates them through transparent dashboards, an organization can eliminate countless hours of time spent creating one-off presentations. Instead of relying on stale information or spending senior-management and board meetings covering surface-level read-outs or debating facts, key decision-makers can instead operate from an evergreen and transparent view of organizational performance that allows them to focus their time on higher-order creative problem-solving and deeper, more substantive engagement with the company’s strategic priorities.

Taking a product-led approach to operations is a continuous and iterative journey that will allow you to unlock much greater potential for each of your functions than most organizations ever realize. Your users, both within and outside your organization, will thank you. You may even build the prototype for a new business!