Part 2: Crafting an Effective Product Strategy
There are many different interpretations of what product strategy can be. In this article, I want to share insights from my own journey, outlining what I’ve settled on and why I believe it to be a crucial element of a successful product team. I’ll also share some tips that I have found useful along the way.
Disclaimer: I am sharing my own experiences and learnings, so always weigh and measure them according to your needs. The product landscape is versatile, and it’s important to find your own style.
In case you missed Part 1, click here to review.
Prerequisite for Product Strategy
Before product leadership can develop a product strategy, it is essential that the company has a clear corporate strategy. A corporate strategy is a high-level plan that sets the company’s vision and key proposition, ensuring alignment and focus across the organization. It includes clear and measurable goals with key metrics, such as revenue or user growth targets by specific dates. Additionally, it outlines growth strategies, guiding resource allocation and efforts towards achieving a competitive advantage and long-term success.
“Product teams are there to solve customers’ problems in a way that benefits the business.”
Product teams must focus on solving customers’ problems, there is no argument against that. However, if the problem we are solving does not benefit the business, then it might not be the right problem for the product team to address. Benefits could mean revenue, reach, or various other metrics, depending on the corporate strategy. This is where having a corporate strategy that sets a vision of what the company wants to achieve helps guide the product strategy.
Corporate Strategy in Place: Now What?
OK, you have a corporate strategy. Now, how do we create a product strategy that can contribute to this corporate strategy? Let’s start with who should own the product strategy!
The responsibility of developing and owning the product strategy lies with product leadership rather than individual Product Managers (PMs). This ensures that the product strategy is done holistically across all product teams. Most likely, you will have more than one team, and often this means that one stream of work complements another. Roadmaps need to sequence holistically with the broader company plans.
Essentially, the product strategy needs to deliver a vision of what we want to achieve and, importantly, why (rather than how). Because of this, product leadership needs to set this. Leave this in the hands of individual PMs, and you might find that they do not have the right context to set such a vision. It can mean that you end up having multiple strategies that compete with each other rather than contribute to each other.
One of Netflix’s mantras is “lead with context, not control,” meaning that while the product strategy provides the necessary context, PMs should have the autonomy to adjust and adapt based on new discoveries during execution.
When PMs work without a product strategy, it leads to a lack of direction and alignment with corporate goals, resulting in fragmented efforts and inefficient resource use. This can cause inconsistencies in products, missed market opportunities, and poor coordination with other departments. Consequently, these issues hinder overall company success by creating inefficiencies and reducing the effectiveness of product initiatives.
Without a product strategy, it’s like placing someone in the middle of nowhere and expecting them to find their own path. Some might succeed, but many will not. You’ll need superhero PMs, and such talent is rare. Instead, if product leadership sets a strong product strategy with a clear vision for each product team, the chances of success drastically improve.
So what could a product strategy look like?
Building a product strategy is inherently subjective. However, as long as your strategy provides clear direction for product teams and ensures transparency for the rest of the organization to understand how the product team will contribute to the corporate strategy, then you are on the right track.
I will share what worked for me when drafting my first product strategy in the hopes that it can help you. I have also created a sample use case for a fictitious company to provide a tangible example of what a product strategy could look like. Feel free to download it from the link below. — —
To start with, I prefer drafting the product strategy in one document. Having a document helps the reader go through the strategy all at once, so it’s important to include the necessary context. Assume that the reader will not have read the corporate strategy, so extract key objectives and relevant sections to set the context for your product strategy.
I like to structure the document as follows:
- Proposition and Vision: Create one proposition per product team so that each team can own their proposition end-to-end. This ensures the product team remains focused on their proposition without context switching, allowing them to continuously discover and deliver on that proposition.
- Strategy Chapters: Split each proposition into strategy chapters. Chapters help group objectives together and simplify storytelling. I recommend having a maximum of four chapters per proposition. This way, if I need to explain a proposition at a high level, I can summarize it with four key points. These chapters represent high-level strategic themes or focus areas that guide the overall direction of the product strategy.
- Key Outcomes: For each chapter, define a set of key outcomes aligned with and directly responsive to the corporate strategy outcomes. These are specific, measurable results that the business aims to achieve within each chapter.
- Roadmap Items to be Validated: For each chapter, outline the detailed initiatives or projects that need to undergo discovery. Don’t worry too much about these roadmap items details; they can and likely will change as you start discovery and validation. However, it’s important to have an initial view from where to start. Remember, just because a roadmap item is listed doesn’t mean it will be developed. It simply provides direction for the product team on what to explore and validate.
Ok, so we have a set of propositions, each with chapters that include key outcomes and roadmap items to be validated. All of this information sits in a document. This is excellent and already sets a good direction for your team. However, there is another crucial element to a product strategy: an artifact that consolidates everything onto one page — the Outcome Roadmap.
You will need an outcome roadmap for each proposition. The outcome roadmap is a key artifact, but it is equally important to maintain a regular cadence for updating it. As we run discovery and learn new things, this roadmap can quickly become outdated if not consistently reviewed and revised.
Let’s explore this in more detail.
Importance of a Product Outcome Roadmap and Structured Update Cadence
A product outcome roadmap is an essential artifact in the product strategy. It provides guidance not only to the product team but to the entire company. The product roadmap should be drafted in collaboration with the product team and is an artifact owned by the Product Manager. Sharing this roadmap with the entire organization is crucial. It serves as a one-page strategy for a proposition, offering transparency on how the product will contribute to the corporate strategy, including timelines and milestones. This transparency can inspire others outside of the product team to contribute ideas or find ways to assist, making it a powerful collaboration enabler. If you share this roadmap, it is important to clarify that it is not a feature roadmap or a project plan and that it will be updated as we run discovery and learn new things.
Here’s why it’s critical:
- Guidance and Focus: The roadmap gives a clear direction on the strategic path the product is taking, aligning the team’s efforts with the overarching goals.
- Transparency and Collaboration: By sharing the roadmap across the organization, it offers transparency into what the product team is working on. This openness allows everyone to see the planned outcomes and provides an opportunity for contributions from different parts of the organization.
- Alignment with Objectives: It helps ensure that all product propositions are strategically aligned with corporate objectives, facilitating a cohesive approach towards achieving desired outcomes.
- Prioritization of Opportunities: During discovery, new opportunities may arise. The roadmap helps prioritize these by allowing you to see all opportunities in sequence. This way, you can assess whether a new opportunity is more important than existing ones and decide the best place on the roadmap to place the new opportunity. The roadmap keeps all opportunities in perspective, ensuring that the most impactful initiatives are prioritized.
- Continuous Learning and Adaptation: The roadmap should be updated every time we learn something new from customer insights through discovery. This ensures that the roadmap remains relevant and reflects the latest information, allowing the team to adapt to new insights and opportunities as they arise.
Given that the roadmap will be updated as we run discovery, it is imperative to have a good cadence for these updates. As we update the roadmap, clear and effective communication is essential to share the changes with the rest of the organization. This way, change is not perceived as a negative but as evidence that we are indeed learning new things from customer insights.
What I’m currently doing with my Product Team
In my product team, we have implemented a structured cadence for updating our product outcome roadmap, which has proven highly effective. Every month, we hold an Investment Committee meeting where we present new opportunities identified through our continuous discovery process. These monthly meetings are crucial for our strategic planning and roadmap management.
During these sessions, our product manager, who owns the roadmap, presents the latest findings and insights, bringing new opportunities to the table with well-thought-out recommendations. They explain the rationale behind each proposed change, detailing how these adjustments align with our strategic goals and respond to new customer insights.
The Investment Committee, comprising key stakeholders from across the organization, critically reviews these proposals to ensure they align with our corporate objectives and offer the strategic value needed to prioritize over existing initiatives. This process sparks meaningful strategic discussions and ensures our roadmap remains a living document, flexible and adaptable to change.
The benefits of this approach are manifold: it keeps us agile, allows us to respond swiftly to new opportunities and insights, and maintains our focus on achieving strategic outcomes rather than just completing tasks. After the Investment Committee agrees to the changes, all updates to the roadmap are communicated to the entire organization, ensuring transparency and alignment with our overarching goals.
Conclusion
I hope this article has been insightful. Below, you’ll find a sample strategy document and a product roadmap I prepared to illustrate what a product strategy could look like. Remember, having a solid strategy is just the first step. You’ll also need a robust product process and a reliable method to measure your progress. For more on this, check out my article on product processes. In future articles, I will delve into the execution and measurement aspects of product strategy.