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You can tell a lot about a company based on who leads it. Does it have engineering-blood? Is it sales driven? Is it a marketing company first and foremost? A tech company’s leadership and culture tend to create three distinct types of organizations with different goals, processes, and interests. Yet while each type of leadership has different strengths and weaknesses, tech companies that survive long enough tend to follow a natural maturity curve.
By knowing where a company is on this curve, you can better understand what motivates them, avoid their pain points, and forge better working relationships. Let’s take a look at all three.
Engineering: driven by gut instinct
The engineering-driven company is usually spawned by one or two engineers who see a need and have the necessary skills to build a solution. If they’ve guessed right, the product is a hit and these engineers move from the garage to the boardroom. Their initial success convinces them that their gut instincts are right so they surround themselves with like-minded individuals who love technology and see it as the solution to any ill. Their initial success also leads to the development of additional technology and products that they consider cool.
Engineers like to talk about their products in excruciating detail and assume that everyone has the same overwhelming desire for facts and figures. Everything is steeped in low-level information; even sales pitches and marketing materials are generated by the engineering team.
If there are dedicated salespeople, there’s little to no overall structure; each salesperson takes an individualistic approach, focusing on different attributes that they think work best.
Marketing in an engineering-driven company is an afterthought – if there is a marketing department at all. Those in marketing are relegated to tasks that engineering doesn’t have time to handle and these are mostly tactical – like running events or launching a new product.
Marketing has little to no input into product planning or roadmaps. In an attempt to make the product appeal to the company’s target audience, marketing turns facts and features into high-level benefits that engineering considers vacuous. Engineering inserts itself into the approval process for collateral and any other outbound communication because it distrusts marketing’s ability to accurately represent the product.
Their initial success convinces engineers that their gut instincts are right so they surround themselves with like-minded individuals who love technology.
Overall, there is a disconnect between how engineering, sales, and marketing see the product and there is typically little communication between the three disciplines.
While an engineering-driven organization creates quality technology and products, they don’t really understand their customer or the market. Once there are enough product misfires and lost opportunities, the engineering leadership seeks to cure their woes by hiring salespeople and using them to connect with their customers, bringing us to the next step in corporate evolution.
Sales: shift from technology to dollars
Once the reigns of the company are handed over to sales, the focus gradually shifts from technology to dollars. Sales-driven companies focus on lead-generation, revenue, and profit. Because salespeople are rewarded by meeting quotas, their natural outlook is short-term: they do not look at the big picture. Because “you’re only as valuable as the last deal you land”, the primary goal for a sales-driven company is the highest possible profit in the shortest amount of time.
The product roadmap under a sales organization is driven disproportionately by new opportunities. To secure contracts with undecided prospects, sales makes extravagant claims that engineering cannot fulfill. This makes contract negotiations difficult as the sales-driven organization tries to rectify what has been promised with what can be delivered.
Sales-driven companies focus on lead-generation, revenue, and profit; their natural outlook is short-term.
Sales-driven companies force marketing to be even more tactical than before. Marketing efforts are mired in sales-support initiatives that can differ wildly by sales region. Every time a salesperson talks to a customer, visits a tradeshow, or catches wind of some other company’s marketing initiative, they come back to the marketing department with immediate demands that derail any strategic work that may be underway. Sales-driven companies cast their marketing department in a supporting role and view marketing as ineffective: when a customer is won it’s the result of good sales and when they’re lost it’s a failure of marketing.
The benefit of a sales-driven organization is that they listen to the customer and start building customer-centric products. However, the corporate focus shifts almost entirely to tactics rather than strategy. According to Pragmatic Marketing, it’s difficult for a business using a sales-driven model of operation to achieve long-term success. The heavy focus on pricing and profit makes it difficult to establish product lines that are built for the long run.
The frustration and difficulty of achieving long term goals can then force the company to make its next pivot … to marketing.
Marketing: focus on long-term business goals
Marketing is a discipline that works the long game, and it is the natural evolution for a company that needs to focus on strategy. Marketing-driven companies align their business strategies, product development, and marketing activities around the needs and wants of customers in target areas. They see everything through the lens of their target audience. Marketing continually checks in with the market and tweaks their product as required to meet the dynamic needs of customers and to increasingly appeal to their desired audience.
Marketing still works toward revenue and profit (and often shares accountability for them), but their focus is on long-term business goals and sustainability of product lines or service offerings. A marketing-driven company forces a considerable amount of cooperation and coordination between how a product is created, marketed, and sold in a way that isn’t required by the other models and therefore doesn’t happen naturally.
There is a clear communication structure to control customer demands and product development. The focus is not on immediate profit but on developing long-term relationships to encourage customers to keep coming back for more.
The careful methodology of a marketing-driven firm leads to higher revenue-growth potential and the ability for the company to establish itself as a market leader.
A marketing-driven company forces a considerable amount of cooperation and coordination between how a product is created, marketed, and sold.
Using the maturity curve
Technology companies have to survive long enough to move to each successive phase along the maturity curve. That means that there are far more engineering-driven companies than sales-driven ones, and more sales-driven companies than marketing ones. As an interesting corollary, the model proven to be the most successful is also the least common.
You should be able to identify which type of company you work for pretty easily. Maybe you work for one that is in transition? Take a minute to think about what type of company your customers have. What about your suppliers or your competitors? With a bit of insight into how technology companies work and what drives them, you can sell better, negotiate better, and position better. Maybe you can even convince your organization to move on to the next phase along the tech company maturity curve.