Product strategy is an intriguing and popular topic among digital product leaders. It’s crucial for product managers, tech leads, and design leads to master, but starting out can be challenging because there’s no universal template for creating a perfect strategy. In the first part of this series, we discussed why starting with a product strategy is difficult and how to get productive with it. Now, let’s dive into the five steps to engage with product strategy.
Step One: Understanding Business Strategy
Product strategy depends on various factors like the company’s stage, scale, existing business strategy, and objectives, as well as its management model and business environment. This complexity makes it hard to devise a one-size-fits-all strategy template. The process begins by observing the strategic elements provided from the top levels of the organization, such as business strategy, company values, and objectives, which frequently impact the product. If these elements are not in place, the need for a product strategy becomes more critical, guiding not just the product’s future but the company’s future as well.
The company’s organizational structure also plays a crucial role in shaping the strategy. Factors such as company hierarchy, team autonomy, and management systems like OKRs (Objectives and Key Results) influence how the strategy should be developed to meet company expectations.
Step Two: Establishing the Product Vision
A product strategy is a collection of insights and decisions aimed at achieving the product vision, which provides direction and serves as the North Star for everyone involved with the product. For example, your product vision might be for your time management app to become an essential tool for a million business professionals, helping them save an hour every week. This vision should be inspirational and describe how the product will impact users’ lives in the future, differentiating it from competitors.
The product vision should be a stable reference point, as reaching it may require multiple strategy adjustments over time. While strategies might be updated annually, the vision should remain relatively consistent. Distinguished scholars like Richard Rumelt emphasize separating the vision from the strategy to highlight its importance.
Step Three: Defining Key Ingredients for Product Strategy
Creating a detailed product strategy is a creative process. It starts with identifying problems and challenges that stand in the way of achieving the vision. Insights, both qualitative and quantitative, about the product, users, industry, and technology should inform this process. Understanding these factors allows you to explore different scenarios to address key challenges.
The outcome is a set of strategic objectives or intents to tackle over the next year. These objectives should be memorable for the Head of Product to ensure they stay focused and aligned. They describe success outcomes without detailing specific solutions, unlike traditional roadmaps. While Gibson Biddle recommends using roadmaps to communicate expected outcomes, it’s vital to manage expectations carefully.
Step Four: Mastering the Art of Focusing
To excel in product strategy, focusing is essential. This means saying ‘no’ to many promising ideas to maintain clarity and coordination. Strategic objectives should be chosen based on insights about customer benefits, actionable development paths, competitive landscape, and compatibility with the product vision.
Information availability varies by the company’s stage. Startups might involve everyone easily but have fewer data points, while established companies may have more competition to consider. Competitive analysis is crucial for both, with strategies like feature differentiation serving as valuable tools.
Step Five: Implementing and Assessing the Strategy
Creating a product strategy is just the beginning; it must guide practical product development work. This involves translating strategic objectives into concrete tasks for development teams. A successful strategy provides a common reference frame for everyone involved with the product, even as company-specific objectives emerge from the broader strategy.
While your first product strategy might not be perfect, it’s a valuable learning tool. Strategy, akin to a hypothesis, helps companies test assumptions and refine plans over time. Typically revised annually, a product strategy ensures long-term success by focusing on what’s most important.
Conclusion
Product strategy is about ensuring product success through focused efforts. It’s a high-level aspect of product development, providing a guiding North Star to navigate everyday challenges. Your strategy will evolve, adapting to new insights and circumstances, helping you maintain alignment and achieve your vision.