Product strategy involves making choices that align with a product vision and company objectives. A robust strategy includes a diagnosis, guiding policy, and coherent actions, and it emerges from creativity rather than detailed analysis.
Why is Product Strategy Challenging?
Product strategy is complex and often linked with executive decisions, large bets, and major initiatives, causing it to be elusive. Although many aim to be strategic, understanding and practical application are limited. Most literature on product strategy defines what it is not, offering few real-world examples, making it difficult to visualize and practice.
Core Themes in Product Strategy
Product strategy bridges the gap between vision and roadmaps or plans. A guiding vision informs strategy, which in turn directs planning and roadmaps. Despite this, strategy is frequently confused with objectives, goals, and plans. Generally, product strategy includes company vision, business strategy and objectives, ideal customer profile (where to play), unique value proposition (how to win), and roadmaps or initiatives.
Key Concepts for Product Strategy Development
Response to a Problem:
Strategy starts in context—recognizing and responding to a problem. Without a problem, there is no strategy. Merely deciding to develop a mobile app, for example, without understanding the need, leads to an empty strategy.
Set of Choices and Actions:
Effective product strategy involves decisions linked to opportunities and challenges. Strategic thinking focuses on actions chosen in response to these factors.
Leading to a Future State:
Strategy is about choices based on the current environment or a future vision. Defining the problem or vision is critical for a winning strategy.
Kernel of Strategy:
A sound strategy includes diagnosis, guiding principles, and coherent actions. Diagnosis identifies key problems, guiding policies align future actions, and coherent actions detail the plan to achieve objectives.
Market Power:
Strategy leverages strengths against market weaknesses. This includes understanding unique value propositions, moats, and product capabilities.
Avoiding Bad Strategy:
A strategy with no recognition of a problem is flawed. Goals and objectives without problem context are ineffective. Good strategy involves making clear-cut choices and saying “no” to some options, providing focus.
Where to Play and How to Win:
Deciding on customer types and defining the industry are crucial strategic choices, typically made by executives. A unique value proposition helps focus product efforts toward winning.
Imagination and Strategy
Product strategy requires envisioning a future state for the product and market. This involves imagining possibilities and selecting the most compelling option, even if it cannot be proven by analysis in advance. Great strategies come from creative visions, not just analytical exercises.
Output of Strategy:
Strategy outputs are a set of choices, not just plans. Planning is straightforward and tangible, while strategy involves gaining insights, making difficult decisions, and addressing conflicts.
Testing Strategy:
A good strategy involves making distinct choices to achieve different outcomes in the future. The gap between current and desired future states highlights necessary changes. Strategy must be bold and sometimes uncomfortable, indicating higher risks and potential rewards.
Opposites and Strategy
A valid strategy does not have an equally valid opposite. For instance, customer service and profitability are not strategies, as their opposites lead to failure. A good strategy clearly addresses a problem or opportunity with a defined choice.
Focusing on outputs rather than inputs, strategy aims for desired positions in the marketplace, whereas planning often centers on controllable elements. Effective strategy requires bold, well-defined decisions to achieve meaningful positions in the market.