7 Warning Signs of Misalignment & How You Can Unleash Product-Led Growth for Your Digital Product
- Product Leadership /
- Product Management /
The user-centric model of product-led growth (PLG) emphasizes the value created by the product or service itself as the primary driver of customer acquisition, conversion, and expansion. In this model, everyone across the organization has a stake in the customer experience. It breaks down silos between business functions and emphasizes cross-collaboration. Product leaders have to bring everyone together, bridging strategy and execution. To do this requires alignment. Alignment is one of the most critical elements of driving performance and growth. It can also be one of the most challenging things to cultivate.
Over the last several years this has become particularly poignant. Companies across a multitude of industries have been working to strengthen their resilience in the dynamic and dramatically evolving market. At the core of this has been an emphasis on delivering customer-centric products and services. The urgency, and for some the absolute necessity of building customer-centric solutions have ultimately been the difference between success and a crumbling demise.
Aligned companies have a strategic advantage to overcome market challenges, innovate, and drive growth. If your organization is not growing, you must first identify the roadblocks that are creating misalignment. At its core, misalignment will derail success.
In this article, we’re going to unpack where misalignment most often emerges within an organization. When a product leader is able to immediately identify and address potential obstacles, it becomes possible to build alignment and drive growth.
How to Identify Misalignment
There are many factors that can contribute to poor product growth. The most common reason often sighted is the lack of product-market fit. However, it is important to note that even products and services that are well established with market fit have the potential for misalignment to evolve quickly. In order to develop and sustain product relevance, it is imperative to identify and address misalignment throughout the product life cycle.
The impact of misalignment surpasses product growth alone, as it often also erodes profitability. Its impact can be seen and felt. Below are several quick examples of potential indicators to pay particular attention to.
Symptomatic Issues Rooted in Misalignment
- Cost overruns
- Time delays
- Expectations management issues
- Accruing design and technical debt
- Product performance, compatibility, maintainability, and scalability issues
- Diminishing consumer confidence and satisfaction
- Poor customer feedback and reviews
- Increasing customer acquisition costs
- Lowering or failing customer/user adoption
- Lowering active customer/user frequency
- Lowering customer/ user retention rate
- Decreasing employee satisfaction
- Internal stakeholders focus on solutions and not the problem
Are you experiencing any of these today? If you are, here are seven of the most common areas where misalignment can be identified. If left unchecked, product growth will be significantly impacted.
#1 – Product Vision
An undefined or unclear product vision is often one of the easiest and most common areas of misalignment to identify.
A strong product vision clearly defines the measurable long-term goal you wish to achieve and your intended destination. Your vision acts as your true north. You may not have all the answers on how you will get there just yet, but your vision is your focus. Everyone’s efforts go into realizing the vision, and every iteration of your product brings you one step closer. In some cases, your product vision may be the same as your company’s vision. In others, the product vision may be specific to a business unit, or a suite of products and services that enables the company to achieve new goals and fulfill its mission (purpose).
Your vision needs to be inspirational, specific, and measurable. Most importantly, your vision needs to address the following:
- Do you know, and can you articulate, the overarching goal you wish to achieve?
- Does the vision align with your company’s purpose, core values, and direction?
- Does everyone know the product vision and have a shared understanding of it?
#2 – Organizational Incentives
When business functions become siloed with conflicting goals and incentives you will quickly see misalignment between teams and individuals.
Organizational incentives are aimed at giving individuals, teams, and each function of the business focus. The incentives should enhance performance with the intent of encouraging positive practices and habits. Oftentimes, however, when incentives are misaligned, confusion is generated. In some cases, conflict, or even toxic conduct may develop at the expense of individuals, teams, and the organization. These challenges are amplified based on the scale and inherent complexity of the organization.
Priorities steer teams toward accomplishing outcomes, while measures tell people when they’ve arrived. Without clear incentives, and effective communication—which includes documenting priorities, outcomes, and measures— people and groups will go their own way. When this happens, teams will fail to deliver on expectations.
In an aligned and customer-centric organization, everyone has a clear understanding of their role in customer acquisition, conversion, and expansion. This needs to be supported by team training, incentives, and goals that drive revenue and the optimization of operations. Here are a few questions you can ask to assess where your organization is today.
- Is everyone clear on their shared and individual roles and responsibilities to drive or support customer/user acquisition, conversion, and expansion?
- What interdependencies are impacted by not having aligned incentives?
#3 – Customer Experience Goals
Priorities that do not enable or drive customer lifetime value, and a fragmented definition of the customer experience (CX) are common identifiers of misalignment.
Every customer experience initiative is about one thing and one thing only: delivering value to the customer. It is about stepping into your customer’s shoes; taking an outside-in customer-centric approach to delivering better products, services, and experiences. Successful customer experience design is also equally about achieving results. It is grounded in support of the business strategy.
Common ongoing CX initiatives might include exploring
- Lowering the cost of customer acquisition
- Increasing product adoption
- Lowering the cost of ownership
- Reducing switching costs when pivoting to alternative solutions
- Reducing attrition rate/churn rates,
- Recognizing customer loyalty, and
- Optimizing operating costs
Start by assessing what CX means to your business.
- Is your organization aligned on what the customer experience is, means, and is it realized?
- Are you defining CX goals through the lens of increasing customer lifetime value?
- How could you approach achieving your CX goals differently?
- Are you exploring CX solutions that can improve customer lifetime value?
#4 – Key Job(s) of the Product
Poor definition and understanding of the problem your product solves can quickly point to an issue of misalignment. It is essential to have a collective understanding of the key roles that your product fulfills. Without this, product creation and perception of its tangible value become distorted.
Understanding the key job(s) of your product at its core is about knowing why your customers choose to hire or fire the product. What is the scope and impact of the problem the customer is trying to solve by hiring your product to do the job? Understanding the problem is the basis for the value exchange that defines what people are willing to trade (i.e. money, time, access, etc.) in return for the product or service.
Without this clarity, the scope of potential success narrows, and your understanding of what is required to reach your goals is compromised. In many cases, there are a few essential customer expectations and outcomes that influence the success of your product.
- What job is your customer trying to achieve?
- What does the ideal outcome look like for them if the job is done well?
- What are the scope, frequency, and impact of this job on the customer?
#5 – Value Drivers
In order to resonate with your target customer, it is paramount to understand the psychological and functional value that your product must provide to them. This is how you strengthen your competitive advantage. This is how you avoid falling into the feature trap that erodes the value of the product. When this understanding is absent, misalignment materializes. This is how sticky products are built.
It’s important to note that the value drivers are the basis for determining the value exchange that customers are willing to trade (i.e. money, time, access, etc.) in return for the product or service.
- What psychological challenges need to be addressed for the successful adoption, use, and retention of customers?
- What functional challenges need to be addressed for the successful adoption, use, and retention of customers?
#6 – Differentiating Product Attributes
When product attributes are not clearly defined by the strategy that will enable the product and value exchange, misalignment will quickly become visible.
Sustainable competitive advantage is rooted in product differentiation. Differentiation is driven by the product attributes that will cumulatively help you stand out and deliver on your value drivers. This requires relentless continuous evaluation of your customer’s needs, the market, and knowing your direct and indirect competition.
To identify attributes that you want to focus on, you must first have a clear understanding of the key moments where your customers and users are engaged. Through this lens, you are able to identify the interactions, features, and content associated with those moments. Each moment creates an opportunity for definable attributes that can be leveraged to differentiate your product. It brings focus to the relationship between providing a great customer experience, and the problem the product solves in a unique way.
- What are the 3-to-5 attributes your product delivers better than anyone else?
- Cumulatively, do your product attributes set you apart from your competition?
#7 – Actionable Customer Insights
The second most common point of misalignment is a lack of actionable customer insights. Misalignment between what it means to be user-centric, and how it looks in practice, can lead to poor or even catastrophic results. At the core, you’ll find a lack of empathy for the user which often generates assumption bias.
The value of actionable insights can not be overstated. One exercise that can be a helpful place to start is mapping the customer journey. Identify each of the moments and the interactions a person has with your brand, product, and/or service. Eventually, you will want to take it a step further. Develop a mental model of your customers and their unique scenarios that help codify a deeper and more intimate understanding of the customer’s motivations that inherently drive their behavior. This can’t be done in a vacuum. It requires engaging people to help us validate what we think we know and what we need to know.
- Do you have a clearly defined target audience for your product?
- Have you mapped the customer journey?
- What are your audience’s motivations and needs at each stage of the journey?
- What repeatable behaviors can you identify and optimize to drive greater outcomes?
Driving Growth and Customer Lifetime Value
By addressing misalignment, we can immediately increase the ability to drive growth. We can bring clarity to the roadblocks that are holding us back. You can see this in the highest performing product-led organizations where:
- Leaders take responsibility for having a clearly defined vision.
- Stakeholders focus on understanding the scope of the problems to solve, and not jumping to solutions.
- Prioritize effectively so that people are not being pulled in too many directions. This enables people to focus appropriately.
- There is a detailed definition and understanding of the core target customer. And an emphasis on continuous discovery to generate actionable customer (user) insight.
- The business is focused on outcomes over deliverables.
- There is agreement on how to measure forward progress and ROI.
Alignment is one of the most essential ingredients to product growth both short and long term. Take inventory of where you are seeing misalignment today. Determine which outcomes you could achieve with an aligned organization. Unlock the limitless potential of each person on your team when their contributions are aligned to achieve the shared vision of your product. You now have a point of reference to start. Look at the most common areas where misalignment shows up and tackle them head-on.