Strategic Alignment: How Business Objectives Shape Successful Products.

Before working out how to build products it’s important to know what to build, innovation is hard at the best of times and aligning products to business goals can often muddy the water. I’m a big fan of a phrase coined by Alberto Savoia author of the book and concept ‘Pretotyping’

“Make sure you are building the right it before you build it right’

As a CTO and developer I’ve always found forging technology and the teams tasked with ‘building it right’ the easy part, there's lots of consider of course, business size, runway length, market position, risk appetite, all factor in but technology whilst sometimes convoluted is malleable, repeatable and consistent (usually). People and culture also play a huge part in how quickly and creatively it can be delivered, but real complexity often starts when we begin talking about what to build and in what order. The answer of course is wonderfully simple, ‘build what the customer values’, except customers value many things, often don’t agree and can change their mind …. but that's an aside. Whatever the decision there needs to be a business driving it all, and the business as a separate entity needs to be able to survive. Businesses have goals and objectives, and fundamentally a wider range of customers (boards, shareholders, investors, existing customers, suppliers etc). Finding the illusive product market fit for a new product or service takes time and investment and ‘the business’ is in charge. 

Investment in products comes in many different forms but one of the biggest factors involved is the size of the company. A business that is profitable can choose to invest their own profits and might have capital to leverage against, startups have none of this and often require external investment or funding.

Whatever the size of the organisation ‘getting to profit’ or ‘growing profit’ is usually a goal somewhere, there's often a strategy behind how the business plans to achieve this and in larger organisations looking for growth that might mean new markets, products or services. So how can we align product development to business goals?

The paradox of customer research

Steve Jobs probably said it best when he wrote 

“...you've got to start with the customer experience and work backwards for the technology.”

There’s lots of approaches to understanding customers, we need to talk to them and ask the right questions. Many businesses have pivoted in directions they probably never considered when they began after listening to feedback. YouTube started in 2005 as a dating site, Instagram was a location based gaming app, Coca-cola was a cure for morphine addiction, bubble wrap was a wallpaper, the slinky was a stabilising device for ships the list goes on and the list of ones that never made it is even longer. 

It’s important to be customer focused, but what if you don’t have any customers? - This is a paradox faced by many startups - There’s lots of options, and loads of books to help, competitor research, behaviour analysis, focus groups, market research, concept testing, pretotyping, lean startup etc etc established orgs have customers in droves, they often know their market and usually start there, (that can be limiting too), startups don’t and need to find them first. Tackling these needs different approaches.

Small Organisations and Startups: Prioritising for Survival and Growth

Consider a startup with a sprinkling of seed funding and a goal to develop a disruptive SaaS product. The business objective is clear: achieve product-market fit quickly to secure Series A funding and extend the runway. The challenge is to align this objective with customer needs, deadlines are tight, appetite for risk is usually high (depending on the industry), teams are tight and focused; the ride is wild.

Practical Application:

In such a scenario, a common technique is to prioritise developing a Minimum Viable Product (MVP) that solves a core customer problem. For instance, if the SaaS product is aimed at automating invoice processing for small businesses, the MVP might include only the essential features needed to validate the concept, such as scanning invoices and basic integration with accounting software. The focus is on quickly getting the product into the hands of early adopters, gathering feedback, and iterating based on real customer needs.

Impact of Funding:

Funding directly impacts the startup’s runway—the time they have to achieve key milestones before needing additional capital. With limited runway, the startup must focus on features that are most likely to attract early customers and generate initial revenue. This tight focus on customer needs and quick iteration is critical to aligning with the overarching business goal of securing further investment.

Actionable Tip:

For startups, prioritise cost effective research approaches, create hypotheses around your core solutions and test them with potential customers. If you’re taking the MVP approach, focus on features that validate your value proposition with customers, try doing it offline first, technology is great at automating things but it’s expensive to build and maintain - use no-code/low-code/third party solutions, run things cheaply and measure them! Take risks and use metrics like, conversion rate, retention rate, referral rate, churn rate, customer acquisition cost (CAC) and customer lifetime value (CLTV) to guide decision-making and ensure that your product development efforts are aligned with the need to extend runway and secure future funding.

Large Organisations: Aligning Across Multiple Teams and Objectives

Example:

Consider a large enterprise like a multinational tech company developing a new product line within its existing ecosystem. The business usually has more objectives and multiple teams tackling them, they also have a viable income stream and are configured to protect this. One example objective might be to increase market share in a specific region and to cross-sell products to existing customers. The challenge here is aligning these broad business objectives with customer needs across different markets, multiple teams, departments and current operations.

Practical Application:

In a large organisation, strategic alignment often involves detailed market research and customer segmentation. For instance, if the objective is to increase market share in Europe, the product development team might collaborate with regional marketing teams to identify specific customer pain points in that market. The product might then include features like multi-language support, region-specific compliance (e.g., GDPR), and localised customer support. Testing the market is still key, research is still important.

Impact of Funding:

In large organisations, funding for product development is usually more stable, but there are still budget constraints and expectations for return on investment (ROI). This means that while there may be more resources available, there is also greater scrutiny on how these resources are allocated. Funding impacts the ability to take risks — larger organisations can be more cautious, focusing on incremental innovations, less inclined to be disruptive. It's sometimes harder to pivot outside the core market too, disposable pens doesn’t naturally translate to disposable pants (I’m looking at you Bic!) aligning with proven customer needs and business goals, rather than pursuing untested and disruptive ideas.

Actionable Tip:

For large organisations, ensure that strategic alignment is maintained through cross-functional collaboration. Regularly review how each feature or product line contributes to broader business objectives, using detailed customer insights and market analysis to guide decisions.

One of the key values that larger organisations have is their people. They have access to a diverse range of skills and capabilities. tapping into the culture of the organisation and gaining insight from a wide range of teams can provide a significant value add, it’s also challenging. In most cases those teams have hierarchical management structures and objectives to deliver, part of their job is not doing risky things that might impact the core business. it can take a significant amount of time to get those people into a place where they are willing to take time away from their current objectives to help. The payback is huge though. In my experience it's quite human  to help each other and if leaders can get buy-in, giving people the opportunity to contribute gives a human return that often carries an unmeasured positive result on culture!

Key Takeaways:

For Startups: Focus on achieving product-market fit quickly by aligning product features with the most pressing customer needs. Use funding strategically to extend your runway and build momentum for future investment rounds. Maybe reconsider splashing the cash on a pro shuffleboard.

For Large Organisations: Leverage your resources to align with broader business objectives, using cross-functional teams to ensure that customer needs are met in ways that drive business growth. Be super mindful of the objectives of other teams, in particular the risks they are responsible for managing, go the extra mile to show you understand and are playing ‘fast and loose’!

Funding and Product-Market Fit: In both contexts, funding and product-market fit are critical. Startups must be laser-focused on securing early traction, while large organisations need to demonstrate not just clear ROI to justify continued investment, but how it might complement the core business and how the risks are being managed. 

By understanding how to align business objectives with customer needs across different organisational contexts and considering the impact of funding, you can drive product success that meets expectations and business goals.