Rediscover the Forgotten art of Product Strategy [Mind the Product]

A strong product strategy is often neglected because of the absence of any strategic thinking in product teams. What can product managers do to make sure they give their product strategy the attention it warrants? Tanya shares her ideas for nurturing a strong product strategy from this year’s #mtpcon London Product Leadership Forum.

It’s about 20 years since Ben Horowitz wrote his now-famous piece “Good Product Manager/Bad Product Manager”. What he wrote is as relevant today as it was then – just look at the first line: “Good product managers know the market, the product, the product line and the competition extremely well and operate from a strong basis of knowledge and confidence.”

But today many, if not most, product teams fail this very first test. Why? Because product strategy – the foundation of any exceptional product work – is too often neglected.

As a product leader you might get away with not having a strong product strategy for a few weeks or months – maybe even a year or so. But eventually, it will catch up with you. And this means you will only ever be an OK product leader – rather than a great one.

There are two common pitfalls that I see time and time again, and both reveal a lack of strategic thinking in teams. So who causes these common mistakes?

First up, the framework fanatics. This team doesn’t have the confidence to make robust decisions based on strong knowledge and instead make process, rather than outcomes, their north star.

Second it’s the optimisation optimistics. This team is overly-confident in their view of the world (again, without deep knowledge) and ignores the need for a compelling strategy. The result? A constant cycle of optimisation which offers little more than diminishing returns.

Both types of product team didn’t start in this place, but over time, their approach to product management has become warped and common sense has been forsaken. Both spend too much time on how to build software rather than what to build. Both are often surprised and confused when their organisation, their stakeholders, and their former cheerleaders begin to push back and question their work and results.

Let’s dive a little deeper.

The Framework Fanatics

The product discipline is overrun with processes and frameworks. Agile, discovery, experimentation have all become embedded in what we do.

There’s nothing I like more than a great framework to simplify a problem and ease decision making, but product management is not painting by numbers. Frameworks, rituals, and process are a guide – not the solution.

Too many teams today make their role about the execution of the process, rather than the impact of the work. I have even met product teams who define their mission as being “exemplary at agile” in their organisation.

In this model, what we do and how we do it becomes the focus – rather than the why. And why is the most important question.

Agile is not a strategy. It’s a capability, a very valuable one, which has immediate operational benefits, but it cannot permanently affect a firm’s competitive position unless there is a strategy behind it that helps the team take the right decisions at the right time.

The Optimisation Optimists

The optimisation optimists are very similar. Teams can see low-hanging fruit. And of course, it makes sense to improve experiences for the user. But you need to remember that you need to weigh up the opportunity cost for every decision.

Just because an initiative may improve a metric or lead to improvements for the user, doesn’t mean it should automatically be done. A good idea is not the same as a great opportunity.

I have yet to meet a product team that suffers from a shortage of good ideas. But I’ve met many teams who clogged up their roadmap with good ideas that cumulatively have little impact. Saying yes to every good idea, however small, means you are not making time for the great opportunities.

Think about how many high-street retailers currently have teams who spend millions on improving their conversion flow – it’s important work. But I bet many of these teams aren’t thinking at all about the profound shifts in consumer shopping habits or Amazon’s weaknesses.

Tackle Problems like NASA

I once had the honour to talk to former astronaut Ed Lu – he’s been on two space-shuttle flights and spent several months on the International Space Station. He told me that when a NASA team is confronted with a difficult problem they don’t try and make the problem smaller (which is what a lot of optimisation optimist teams do). Instead, they make the problem bigger. This means that the teams can come up with the most imaginative and impactful solutions.

I’ve often heard product leaders say that if you improve things for your users, the value will follow. I don’t disagree, BUT it is the job of a product manager not to just identify ANY opportunities, but to identify those that will create the MOST value for the users and their company.

So how do you know if your teams are suffering from framework fanatics or optimisation optimists?

Do you recognise any of these?

• A team that is talking a lot about discovery principle but who are unable to do this alongside delivery.
• The roadmap is full of optimisation initiatives but there’s little discussion about the opportunity cost or longer-term disruption.
• You are seen as a cost centre. Teams are blissfully unaware of their cost and don’t measure themselves against the value they should be creating.
• Every conversation with stakeholders stresses delivery (because they can’t quite bring themselves to say that you are no longer delivering)

Sound familiar? This is where product strategy fits in.

If you go on a hiking trip, you want a destination, a map, and a compass. That’s why you have to start with vision and strategy, they give you purpose and direction.

Your Product Vision

First, you need a product vision. This paints a picture of what you’re trying to achieve and should be:

• Inspirational
• Emotional
• 3-10 years horizon

This may be the company’s overarching vision. If there isn’t one, you as a product leader should articulate one. And there’s a secret to motivating individuals and teams to do great things. It’s purpose.

Setting out to solve big problems brings purpose and meaning. It gives us a compelling reason to come to work.

The more we organise around an inspiring product vision, the harder we and our teams will work. The more dedicated we’ll be, the faster we can solve big problems and maybe most importantly, the more fulfilled we’ll feel about the work we do.

Your Product Strategy

What is a product strategy anyway? It’s pretty simple – your product strategy outlines the steps required to reach your vision.

The best strategies are about being different and this means deliberately choosing a path to deliver a hard-to-copy mix of value in your market.

One reason for the lack of impact by product teams is that “new strategies” are often not strategies at all. A real strategy involves a clear set of steps that define what the firm is going to do and what it’s not going to do.

Strategy is not about making a rigid three-year plan and sticking to it. It’s precisely when long-held assumptions in an industry are challenged that strategic product changes are needed. And you’ll need to make those changes very quickly. So, far from only being about what we’ll do in the future, strategy is about what we will do now in order to shape the future to our advantage.

We live in a world of S curves which are constantly evolving. What you build at the start of an S curve is very different as the S curve matures. Take the S curve for mobile. At the beginning, the most innovative products used well-known functionality such as weather and news. But as the S curve matured, new products could offer radically different capabilities, causing yet new waves of disruption.

So, if you build a product in the early days of an S curve, you need to ensure you think strategically as the market and tech capabilities change. It is unlikely that your product can stay the same. If you’re at the top of an S curve today, you need to think about the next S curve.

What’s Next?

Great product leaders obsess about the next inflection point in their market.

Just think about the great product teams you know. It’s very likely they are teams that have built a robust product that allowed a business to survive, if not thrive, significant various industry inflection points. For example:

• Guardian – digital, to social, to global, to donations
• Netflix – DVD rental, to streaming, to interactive formats
• Amazon – books, to general retail, to cloud, to voice

And there are many examples of companies that failed – Yahoo for example. Yahoo never really thrived beyond first-generation search.

So, if you’re about to start work on a product strategy, what do you need?

You need to have considered these six components:

1. The market – what competitors are doing, how it is changing, where is the innovation at the edges
2. Technology changes – what is possible today or tomorrow that was not possible before
3. Consumer behaviours – how expectations and needs are shifting
4. Your company’s strengths – where does it have competitive advantage
5. Your three to five priority steps for the future – and how will competitors find these difficult to copy. These will become the strategic pillars for your product prioritisation
6. How does this strategy change the trajectory for the business (aka how product really drives value in the business)

A few Words of Warning

Firstly, be careful, as many so-called strategies are in fact goals. For example: “We want to be the number one or number two in all the markets in which we operate.” This doesn’t tell you what you’re going to do. All it does is tell you what you hope the outcome will be. You’ll still need a strategy to achieve it.

Secondly, if you manage multiple teams, you need to have an overarching product strategy where each team can see how it adds value and how it contributes to the overarching vision.

You also need to ensure that the product strategy is both bottom-up, top-down and side-to-side. Product strategy needs to nest with company strategy, and it needs to be driven by you – as a product leader, by your product managers while involving the other parts of the business.

And finally, you need to think about these two elements:

1. Capturing additional value through optimisation, with low-risk, minor improvements to existing product
2. Creating new value through innovation, consistently delivering new sources of value to our users and customers

In Conclusion

Ideas are the most powerful force in human culture and this means there’s a secret power to a product strategy. Therefore your product strategy and product vision are amazing opportunities to demonstrate and showcase your team’s talents.

Ideas are complex – so the best product strategies have been constructed with a simple narrative about the ideas you are most passionate about and why.

Done well, product strategy has the ability to inspire confidence and can energise an entire organisation. So, as you think about what your teams are going to work on, resist the temptation to dive straight into execution with discovery and delivery. Working smart means:

• allowing yourself the time to think longer term,
• aspiring to give your company competitive advantage and
• articulating a powerful strategy on how to achieve your vision.

There is a lot of talk about the moment about empowered teams. But remember empowerment is earned. It is rarely given automatically, and for that to happen, you need to nurture trust by delivering meaningful results. The best way to do this is not via great execution ahead of strategy but the execution OF great strategy.

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