BEYOND THE BUILD

Product Strategy Done Right — Part 2: Getting the Foundations in Place

Crafting a winning product strategy requires a multifaceted approach that spans from vision to execution. It begins with developing a transformative product vision — one that is inspiring, shared, ethical, concise, ambitious, and enduring. This visionary foundation then needs to be tightly connected to the company’s overarching business plan, ensuring strategic alignment. However, product strategy is not a static exercise; it involves carefully balancing different types of innovation initiatives to drive strategic growth. As the product progresses through its lifecycle, continuous refinement of the strategy is essential to maximize success. Underpinning it all is the critical role of effective stakeholder engagement, as product leaders must secure buy-in and leverage the collective expertise of key stakeholders. By addressing these foundational elements, product teams can craft winning strategies that deliver lasting impact for their organizations.

Nima Torabi
Beyond the Build
Published in
37 min readApr 13, 2024

--

Table of Contents

The Foundational Elements of a Winning Product Strategy

From Inspiration to Execution: Crafting a Transformative Product Vision

Bridging the Gap: Connecting Your Product Strategy to the Company’s Overarching Business Plan

From Scattered Initiatives to Strategic Growth: Balancing Product Innovation

Continuous Strategy Refinement: Maximizing Product Success Across the Product Lifecycle

Stakeholder Engagement: Key to Product Strategy Success

Welcome!

If you found this article helpful, be sure to follow me on Medium to stay updated on and explore my publications..

Photo by GR Stocks on Unsplash

The Foundational Elements of a Winning Product Strategy

Have you ever wondered what separates the products that captivate us from the ones that fade into obscurity? The answer lies in the strategic vision that guides their development — the product strategy blueprint or plan. This comprehensive plan is the driving force behind the products that seamlessly integrate into our daily lives, from the intuitive Google search to the effortless Uber ride.

The Core Elements of Product Strategy

At its core, a product strategy blueprint is a high-level plan that outlines your vision for success. It’s the roadmap that answers the crucial questions:

  • Who is your target audience?
  • What needs does your product fulfill?
  • What features set it apart?
  • And most importantly, how will it benefit your business?
The four elements of a Product Strategy Blueprint or Plan — Target Market, Business Objectives, Differentiating Features, and Value Proposition
The four elements of a Product Strategy Blueprint or Plan — Target Market, Business Objectives, Differentiating Features, and Value Proposition

In other words, the product blueprint encompasses four key elements:

  1. Target Market: Identify the specific users and customers your product is designed for, and understand their unique needs and pain points.
  2. Value Proposition: Define the core value your product offers, the problems it solves, and the benefits it provides to your target audience.
  3. Differentiating Features: Pinpoint the 3–5 key features that make your product stand out from the competition and drive customer adoption.
  4. Business Objectives: Articulate the strategic goals your product aims to achieve, whether it’s generating revenue, boosting brand equity, or supporting the sale of other products and services.

Developing a Product Strategy Based on Your PLC

Developing a product blueprint is not a one-size-fits-all process. The approach varies depending on the stage of your product’s lifecycle (PLC):

  1. New Product Launch: For a new product, the focus is on initial research to establish a solid foundation. This includes observing target users, interviewing potential customers, and analyzing the competitive landscape. The strategy outlines the target market, value proposition, differentiating features, and business objectives for the new product.
  2. Major Product Overhaul: When planning a significant change to an existing product, the strategy starts by capturing the current product strategy. It then determines the necessary adjustments to the target market, value proposition, differentiating features, and business objectives to support the desired transformation.
  3. Incremental Product Enhancements: For a stable product undergoing gradual improvements, the strategy reviews the existing market, needs, features, and business goals. It assesses whether the current plan will help maximize the product’s future value, rather than making major changes to the core elements.

The main distinction is that:

  • New products require more foundational research to establish a baseline strategy
  • While major overhauls involve rethinking the core elements, and
  • Incremental enhancements focus on optimizing the existing strategy.

The depth and scope of analysis for each element varies based on the product lifecycle stage.

The Power of Stakeholder Collaboration in Product Strategy

Crafting a winning product strategy is a multifaceted endeavor and one that requires the collective expertise and buy-in of key stakeholders across the organization.

Regardless of whether you’re launching a brand-new offering or refining an existing product, involving stakeholders in the strategic planning process is a crucial step that can make all the difference in the success of your product game plan.

  • Leveraging Diverse Perspectives: Stakeholders and development team members possess a wealth of knowledge and diverse viewpoints that can significantly enhance the product strategy. By tapping into their expertise, product managers can make more informed, well-rounded decisions that consider various angles and considerations. This cross-pollination of ideas helps identify blind spots, uncover new opportunities, and ultimately, craft a more robust and impactful product strategy.
  • Fostering Alignment and Shared Understanding: When stakeholders are actively engaged in the strategic planning process, it fosters a shared understanding of the product vision, goals, and key initiatives. This alignment across the organization is essential for ensuring successful implementation and execution. By aligning key stakeholders around the product strategy, product managers can harness the collective energy and commitment needed to bring the product to life.
  • Securing Buy-in and Support: Stakeholder involvement doesn’t just inform the product strategy — it also secures the buy-in and support needed to make it a reality. When stakeholders feel their perspectives have been heard and incorporated, they are more likely to champion the product strategy and lend their full support to its implementation. This increased ownership and commitment from key stakeholders is a crucial ingredient for driving successful product outcomes.

Adapting to Product Evolution

Your product strategy must also adapt as the product and market landscape evolves to ensure the strategy remains relevant and responsive. Here are some key points for adapting the product strategy:

  • Continuous Market Analysis: Regularly review and update the product strategy based on ongoing market research and stakeholder input. Monitor changing customer needs, competitor actions, and industry trends to identify necessary adjustments to the target market, value proposition, differentiating features, and business objectives.
  • Agile Methodology: Embrace agile development practices that allow for quick iterations and adaptations to the product strategy. This enables the product team to rapidly respond to shifting market conditions and incorporate customer feedback.
  • Cross-Functional Collaboration: Involve stakeholders across the organization, including sales, marketing, and development, in the product strategy review process. This collaborative approach ensures the strategy aligns with the company’s evolving goals and capabilities.
  • Flexibility and Experimentation: Build flexibility into the product strategy to accommodate unforeseen circumstances, such as regulatory changes or global events. Encourage a culture of learning and experimentation to test assumptions and validate new strategic directions.

By continuously adapting the product strategy, product leaders can keep the product aligned with changing customer needs and market dynamics, positioning the business for long-term success.

The Foundational Elements of a Winning Product Strategy — The approach to developing the product strategy blueprint varies based on the product’s lifecycle stage:
The Foundational Elements of a Winning Product Strategy — The approach to developing the product strategy blueprint varies based on the product’s lifecycle stage: New Product Launch: Focuses on initial research to establish a solid foundation, including user observation, customer interviews, and competitive analysis. Major Product Overhaul: Starts by capturing the current product strategy and determines necessary adjustments to the core elements. Incremental Product Enhancements: Review the existing market, needs, features, and business goals to optimize the current strategy. Crafting a winning product strategy requires the collective expertise and buy-in of key stakeholders across the organization. This collaborative approach leverages diverse perspectives, fosters alignment, and secures the support needed for successful implementation and execution. To ensure the product strategy remains relevant and responsive, it must be continuously adapted based on ongoing market analysis, agile development practices, cross-functional collaboration, and a culture of flexibility and experimentation.
Photo by Greg Rakozy on Unsplash

From Inspiration to Execution: Crafting a Transformative Product Vision

As product managers, we often find ourselves immersed in the intricate details of features, user flows, and technical specifications. But amidst the day-to-day grind, it’s easy to lose sight of the bigger picture — the driving force that gives our products purpose and direction. That’s where the product vision comes into play.

The product vision is the ultimate reason for creating a product — an inspirational goal that describes the positive change it should bring about.

It’s the North Star that:

  • Guides the team
  • Aligns stakeholders
  • Captivates customers

But crafting an effective product vision is not easy. It requires a delicate balance of qualities that elevate it from a mere slogan to a transformative force.

The Hallmarks of a Powerful Product Vision

A compelling product vision is the foundation for building successful, impactful products. The key hallmarks of a powerful product vision include being inspiring, shared, ethical, concise, ambitious, and enduring. Understanding these essential qualities can help product teams craft a vision that aligns stakeholders, drives innovation, and positions the product for long-term success.

The Essential Qualities of a Powerful Product Vision — The key hallmarks of an effective product vision that can help align stakeholders, drive innovation, and position a product for long-term success: Inspiring, Shared, Ethical, Concise, Ambitious, and Enduring.
The Essential Qualities of a Powerful Product Vision — The key hallmarks of an effective product vision that can help align stakeholders, drive innovation, and position a product for long-term success: Inspiring, Shared, Ethical, Concise, Ambitious, and Enduring.
  • Inspiring: The product vision should ignite a sense of purpose and motivation in everyone involved in the product’s development, from product managers to the engineering team. An inspiring vision helps people understand how their work contributes to a larger, meaningful goal, and how their efforts can create positive change. An inspiring vision also helps the product leader stay committed and passionate about the product, especially during challenging times.
  • Shared: A truly shared vision unites the team and key stakeholders around a common goal. When the vision is shared, it fosters collaboration and alignment, as everyone is working towards the same overarching objective. Achieving a shared vision requires a collaborative process of crafting the vision together, ensuring everyone’s perspectives are heard and incorporated.
  • Ethical: An ethical product vision ensures the product is designed to benefit its users and the world, rather than prioritizing self-interest or profit. The vision should reflect a genuine intention to create positive change and improve people’s lives, not just maximize business outcomes. Upholding ethical principles in the vision helps guide the product team to make decisions that are in the best interest of customers and society.
  • Concise: While the vision should be ambitious and far-reaching, it must also be distilled into a clear, memorable, and easily communicable statement. A concise vision statement makes it easier for the team to rally around the product’s purpose and convey it to stakeholders and customers. Crafting a concise vision requires discipline and the ability to prioritize the most essential elements of the product’s long-term aspirations.
  • Ambitious: The product vision should be a “big, hairy, audacious goal” — a lofty, inspirational target that pushes the team to achieve extraordinary outcomes. An ambitious vision increases the chances of providing a continuous sense of purpose and direction, even as the product and market evolve. Ambitious visions are not necessarily measurable, but they serve as a guiding light that transcends specific solutions or products.
  • Enduring: The product vision should not be tied to a particular product or solution, but rather focused on the positive change it aims to create. This allows the vision to remain stable and relevant even as the product strategy and roadmap adapt to changing market conditions and customer needs. An enduring vision provides a consistent North Star that can guide the product’s evolution over an extended period, often 10 years or more.

Crafting the Vision Collaboratively

Developing the product vision is not a solo endeavor. It requires the collective input and buy-in of key stakeholders and the development team.

By engaging these diverse perspectives, product leaders can craft a vision that truly resonates, leverages the team’s expertise, and fosters a shared understanding of the product’s purpose.

This collaborative approach is essential, as it prevents the vision from being dominated by the most powerful voice or reduced to the smallest common denominator. Instead, the team must take the time to create an inclusive, inspiring vision that aligns everyone around a common North Star.

Applying the Vision Across Products

While every product should have a clear vision, not every product requires its unique vision.

In the case of related product suites, like Microsoft Office, a single overarching vision can guide the individual offerings, ensuring they work in harmony towards a shared goal.

This approach helps maintain consistency and alignment, while still allowing for the necessary flexibility to adapt each product to its specific market and customer needs.

The vision serves as the unifying thread, providing direction and purpose across the entire product ecosystem.

In the end, the product vision is not just a lofty statement — it’s a transformative force that can propel your products to greatness.

By crafting a compelling vision that inspires, aligns, and guides your team, you can unlock the true potential of your offerings and deliver lasting value to your customers.

Aligning Your Product Vision With Corporate Strategies

Your product vision should be tightly aligned with your company’s overarching business strategy.

The hierarchy of corporate mission, vision, business goals and strategies, and product vision, strategy, and team topologies. [Source]
The hierarchy of corporate mission, vision, business goals and strategies, and product vision, strategy, and team topologies. [Source]

While the business strategy defines the big-picture objectives, the product vision articulates how a specific offering will contribute to those goals.

Crucially, your product vision must support and reinforce your company’s broader vision and strategic direction.

When the product vision is in sync with business strategy, it ensures that your team’s efforts are laser-focused on delivering value that drives the organization forward.

By aligning your product vision with your company’s mission, vision, and business strategy, you unlock a powerful synergy that can propel your offerings to new heights. This alignment:

  • Ensures your product development efforts are strategically relevant and impactful
  • Fosters a shared understanding and commitment across the organization
  • Enables you to make more informed, data-driven decisions about your product
  • Increases the likelihood of successful execution and long-term success

So, as you embark on crafting or refining your product vision, be sure to keep a keen eye on the bigger corporate picture.

By aligning your product’s purpose with your company’s strategic direction, you can create offerings that truly move the needle and deliver lasting value to your customers.

Photo by Gerrie van der Walt on Unsplash

Bridging the Gap: Connecting Your Product Strategy to the Company’s Overarching Business Plan

In today’s fast-paced business landscape, successful products are not built in a vacuum. They are the result of a well-crafted strategic plan that guides the entire organization toward a common goal.

As product managers, it is essential to understand how your product vision and strategy align with the company’s overarching business strategy — the high-level roadmap that defines “the path” to success.

By closely coupling these two critical elements, you can ensure your product development efforts are strategically relevant, customer-centric, and positioned to drive the overall success of the business.

Business Strategy Provides the Foundation For Product Strategy

An effective business strategy is the foundation upon which successful products are built. It answers the key questions that define your company’s path to success:

  1. Winning Aspiration: This is the company’s overarching vision and purpose — the high-level, inspirational goal that guides the entire organization. It should answer the question: What is the company’s ultimate aim and the positive change it wants to create in the world? Examples could include Tesla’s goal “to accelerate the world’s transition to sustainable energy” or Microsoft’s vision “to empower every person and every organization on the planet to achieve more.” The winning aspiration provides a clear, motivating North Star that aligns and energizes the workforce.
  2. Target Markets: This element defines the specific customer segments, industries, and geographies the company will focus on. It involves identifying the most promising and valuable markets to compete in, based on factors like growth potential, fit with the company’s capabilities, and competitive landscape. Defining the target markets helps the company allocate resources effectively and develop tailored products and services.
  3. Competitive Advantage: This aspect outlines how the company will differentiate itself and win in the chosen markets. It involves identifying the unique capabilities, assets, and value propositions that set the company apart from competitors. Examples could include cost leadership, product innovation, superior customer service, or specialized industry expertise. Establishing a clear competitive advantage is crucial for long-term success and sustainable growth.
  4. Required Capabilities: This element examines the new products, services, and enhancements the company needs to develop to support its strategic objectives. It involves assessing the current product portfolio and identifying gaps or areas for improvement. This analysis informs the product roadmap and investment decisions to build the necessary capabilities.
  5. Enabling Systems: This component addresses the processes, structures, and management approaches that will empower the organization to execute the strategy effectively. It could include changes to the organizational structure, adoption of agile methodologies, investment in digital transformation, or the implementation of new performance management systems. Ensuring the right enabling systems are in place is critical for translating the strategic vision into tangible results.

By answering these critical questions, you can craft a business strategy that provides a clear roadmap for your company’s success.

An effective business strategy, with its clearly defined objectives and resource allocation, provides the foundational framework that guide the development of individual product strategies.

Alignment between Business and Product Strategies

The product vision and strategy must be tightly coupled with the company’s broader business strategy and objectives.

There should be a clear line of sight between the product-level plans and the organization’s overarching goals.

The product strategy should articulate how a specific product or offering will contribute to the achievement of the company’s strategic priorities, whether that’s driving revenue growth, expanding into new markets, or strengthening the brand.

This alignment ensures that the product development efforts are strategically relevant and impactful for the organization.

The products being built should be directly supporting the company’s path to success. When the product strategy is misaligned with the business strategy, it can result in products that fail to deliver meaningful value or that are not well-positioned to capitalize on the company’s core strengths.

Product Strategy Supports Business Execution

While the business strategy sets the high-level direction, the product strategy and product execution outline the specific plans, initiatives, roadmaps, and backlogs to deliver on that strategy.

Your product strategy defines how the product will create value for the customers and business, and in effect translate the company’s strategic vision into actionable and measurable steps.

An effective product strategy enables the organization to execute its broader business objectives by guiding the development of targeted, customer-centric products and services.

In other words, the product strategy serves as the critical link between the company’s aspirations and the tangible solutions it brings to market.

It ensures the organization’s resources are allocated towards initiatives that will have the greatest impact.

Iterative Refinement

As the business landscape evolves, the company’s strategic priorities may shift over time in response to changing market conditions, competitive dynamics, or customer needs.

When the business strategy undergoes updates or revisions, the product strategy must also be regularly reviewed and adapted to maintain alignment.

Changes in the company’s vision, target markets, or competitive positioning should be reflected in updates to the product strategy, ensuring it remains relevant and continues to support the overarching business goals.

This iterative process of aligning the product strategy with the evolving business strategy is crucial for keeping the organization’s product portfolio strategically sound and responsive to market demands.

Aligning Product Strategy with Business Strategy — The product strategy serves as the critical link between the company’s business strategy and the tangible solutions it brings to market. By closely aligning the product vision, strategy, and execution with the overarching business strategy, organizations can ensure their product development efforts are strategically relevant, customer-centric, and positioned to drive the overall success of the business.
Aligning Product Strategy with Business Strategy — The product strategy serves as the critical link between the company’s business strategy and the tangible solutions it brings to market. By closely aligning the product vision, strategy, and execution with the overarching business strategy, organizations can ensure their product development efforts are strategically relevant, customer-centric, and positioned to drive the overall success of the business. As the business landscape evolves, the company’s strategic priorities may shift over time. The product strategy must be regularly reviewed and adapted to maintain alignment with the updated business strategy, ensuring the product portfolio remains relevant and responsive to market demands.

Fellow Product Enthusiast!

I’d love to hear your thoughts!

Share your insights and feedback in the comments below and let’s continue this discussion.

Photo by Skye Studios on Unsplash

From Scattered Initiatives to Strategic Growth: Balancing Product Innovation

Product leaders are tasked with the exciting challenge of bringing new value to the world. However, not all innovations are created equal — each type of product innovation requires a unique strategic approach and organizational mindset to succeed. Understanding the innovation ambition of your offering is the key to unlocking its true growth potential.

Furthermore, in today’s fast-paced, hyper-competitive business landscape, innovation is the lifeblood of growth and survival. But for many companies, their innovation efforts feel more like a scattered collection of ad hoc initiatives rather than a cohesive, strategic portfolio. This disjointed approach often leads to underwhelming returns and a constant struggle to stay ahead of the curve.

Classifying Your Innovation Ambition

The Innovation Ambition Matrix provides a helpful framework for categorizing product innovations based on two key dimensions: the newness of the product and the newness of the target market.

The Innovation Ambition Matrix — The innovation ambition matrix is a strategic framework that helps businesses and product teams categorize and evaluate their innovation efforts across different levels of ambition and impact. It maps innovations along two dimensions — target markets/customers and product/business model changes — to provide a holistic view of the innovation portfolio. [Source]
The Innovation Ambition Matrix — The innovation ambition matrix is a strategic framework that helps businesses and product teams categorize and evaluate their innovation efforts across different levels of ambition and impact. It maps innovations along two dimensions — target markets/customers and product/business model changes — to provide a holistic view of the innovation portfolio. [Source]
  1. Core Innovations: These are optimizations and incremental improvements to existing products for established markets. They leverage your company’s existing skills and assets, generating reliable revenue streams with low risk. The focus here should be on operational excellence and protecting your core business.
  2. Adjacent Innovations: These involve taking your existing capabilities into new market spaces — either by offering your current products to different customer segments or by creating new products for your existing markets. While they offer growth opportunities, adjacent innovations require fresh insights and a higher tolerance for risk.
  3. Disruptive/Transformational Innovations: The holy grail of product innovation, disruptive offerings create entirely new markets by solving customer problems in better, more convenient, or more affordable ways. These innovations often leverage breakthrough technologies, but the real disruption comes from redefining the boundaries of the industry. Established companies, however, often struggle to effectively harness the power of disruptive innovation.
The Innovation Ambition Spectrum — The three main types of product innovation that companies can pursue — core, adjacent, and disruptive/transformational. Each category represents a different level of ambition and impact, requiring varying degrees of risk, resources, and strategic focus.
The Innovation Ambition Spectrum — The three main types of product innovation that companies can pursue — core, adjacent, and disruptive/transformational. Each category represents a different level of ambition and impact, requiring varying degrees of risk, resources, and strategic focus.

Aligning Your Product Strategy to the Innovation Type

The type of innovation your product represents has profound implications for your strategic planning, organizational structure, and execution mindset.

  • Core innovations thrive in a conservative, risk-averse environment focused on operational efficiency.
  • Adjacent innovations demand a more inquisitive, experimental approach, with the willingness to take informed risks.
  • Disruptive innovations require a truly entrepreneurial spirit — one that’s comfortable with uncertainty, open to failure, and dedicated to reinventing the status quo.

Recognizing the innovation ambition of your product and organization is the first step in crafting a strategy that sets it up for success.

Striking the Right Product Innovation Portfolio Balance and Enabling Effective Execution

Research has shown that high-performing companies typically allocate their innovation resources in a 70–20–10 ratio across core, adjacent, and transformational initiatives, respectively. This “golden ratio” reflects the inverse relationship between the level of innovation ambition and the potential returns.

While this allocation may serve as a useful starting point, the ideal balance will vary based on factors like your industry, competitive position, and stage of development.

The key is to thoughtfully assess your unique circumstances and craft an innovation portfolio that aligns with your strategic objectives.

Achieving the right innovation portfolio balance is only half the battle.

To truly unlock the power of your innovation efforts, you must also ensure your organization is equipped to execute effectively at all three levels of ambition.

This requires carefully addressing critical areas like talent management, organizational structure, funding mechanisms, performance metrics, and leadership communication.

The Innovation Ambition Spectrum — The three main types of innovations that companies can pursue — core, adjacent, and disruptive/transformational. Each category represents a different level of ambition and impact, requiring varying degrees of risk, resources, and strategic focus.
The Innovation Ambition Spectrum — The three main types of innovations that companies can pursue — core, adjacent, and disruptive/transformational. Each category represents a different level of ambition and impact, requiring varying degrees of risk, resources, and strategic focus.

Each of the critical areas that companies must address to enable the successful execution of their innovation portfolio across the different levels of the Innovation Ambition Matrix requires the following organizational capabilities:

  • Talent Management: Core and Adjacent Innovations: Require analytical skills to interpret market and customer data, translate insights into offering enhancements, and identify promising adjacencies. Disruptive/Transformational Innovations: Demand a different skillset, including entrepreneurial mindset, creativity, and comfort with ambiguity and failure. Companies need to attract, develop, and retain the right talent for each innovation ambition level.
  • Organizational Structure: Core and Adjacent Innovations: Can be managed within the existing organizational structure, with clear processes and governance. Disruptive/Transformational Innovations: Require more autonomy, separation from the core business, and flexible, agile ways of working. Dedicated innovation teams, incubators, or skunkworks can provide the necessary space and freedom for transformational efforts.
  • Funding Mechanisms: Core and Adjacent Innovations: Can be funded through the regular P&L and budgeting processes. Disruptive/ Transformational Innovations: These may require separate, dedicated funding structures (e.g., venture capital-style funds) that are decoupled from the core business. This allows for a longer-term, more experimental approach, without the pressure of short-term financial metrics.
  • Performance Metrics: Core and Adjacent Innovations: Can be evaluated using traditional financial metrics like ROI, NPV, and stage-gate processes. Disruptive/Transformational Innovations: Require a different set of metrics, focusing on learning, exploration, and internal milestones rather than external financial projections. Noneconomic and internal metrics can help nurture and develop transformational ideas before they are ready for the market.
  • Leadership and Communication: Across all innovation ambition levels: Requires clear, consistent messaging from leadership on the company’s innovation strategy, priorities, and desired outcomes. Fostering a culture that embraces innovation, celebrates failures as learning opportunities, and aligns the entire organization around the innovation portfolio is crucial. Leaders must role-model the appropriate mindset and behaviors for each innovation type, from operational excellence for core to entrepreneurial risk-taking for transformational.

By carefully addressing these five critical areas, product leaders can create the necessary organizational capabilities, processes, and mindsets to execute effectively across the full spectrum of the Innovation Ambition Matrix. This holistic approach is essential for unlocking the true power of innovation and driving sustainable growth.

Transformational innovations, in particular, demand a fundamentally different approach — one that embraces an entrepreneurial mindset, accepts failure as a learning opportunity and focuses on the potential for long-term impact over short-term predictability.

Mastering Product Innovation

Mastering product innovation is not about pursuing the latest fads or chasing shiny new technologies. It’s about:

  • Striking the right innovation balance
  • Aligning your efforts with your strategic priorities, and
  • Building an organization that can thrive across the full spectrum of innovation ambition

By

  • Navigating the Innovation Ambition Matrix
  • Calibrating your portfolio, and
  • Enabling execution excellence

You can transform your innovation efforts from a scattered collection of initiatives into a reliable driver of growth and competitive advantage.

The path to innovation mastery may not be easy, but the rewards for those who get it right are truly game-changing.

Product Innovation Strategy Comparison — This table compares three levels of innovation — Core, Adjacent, and Disruptive — across various dimensions such as product focus, risk, organizational structure, technology, effort required for discovery and validation, and the feasibility of creating reliable financial forecasts. It provides insights into the differing approaches, attitudes, and challenges associated with each level of innovation.
Product Innovation Strategy Comparison — There are three levels of innovation — Core, Adjacent, and Disruptive — across various dimensions such as product focus, risk, organizational structure, technology, effort required for discovery and validation, and the feasibility of creating reliable financial forecasts. It provides insights into the differing approaches, attitudes, and challenges associated with each level of innovation.
Photo by Suzanne D. Williams on Unsplash

Continuous Strategy Refinement: Maximizing Product Success Across the Product Lifecycle

Product teams are tasked with guiding their offerings through an evolving journey — from initial development to eventual decline. Understanding the product lifecycle is the key to making strategic decisions that maximize a product’s success and longevity.

The Stages of the Product Lifecycle

The product lifecycle model describes the five distinct stages a product goes through over time:

  • Phase 1: Development
  • Phase 2: Introduction
  • Phase 3: Growth
  • Phase 4: Maturity
  • Phase 5: Decline

Interspersed within these stages are critical milestones, such as the product launch and the achievement of product-market fit (PMF).

The Product Lifecycle — [Source]

The growth and maturity stages are the most attractive, as they provide the highest profits and business benefits. During these phases, the focus should be on sustaining and optimizing the product to maintain its market dominance.

Applying the Lifecycle Model

While the product lifecycle model follows a rough bell-shaped curve, the actual trajectory of a product can vary significantly.

This is why the model is best used as a sense-making tool, rather than a predictive one.

It’s important to note that the product lifecycle model is not a perfect predictive tool.

The actual trajectory of a product can deviate significantly from the idealized bell-shaped curve, depending on a variety of market, competitive, and technological factors.

Additionally,

The model serves as a framework for reflection, rather than a prescriptive guide.

The key is to use it as a lens through which to view your product’s performance and make informed strategic choices to maximize its success throughout its lifespan.

To leverage the lifecycle model effectively, you must:

  • First, define the value your product creates

And then

  • Carefully track its performance over time

This allows you to make informed strategic decisions that align with the product’s current stage of development.

Lessons from the iPod

When Apple launched the original iPod in 2001, it quickly gained significant market share and entered a high-growth phase. This was fueled by the introduction of the iTunes music platform and the release of new iPod variants like the Mini, Nano, and Touch.

The iPod’s sales trajectory resembled a classic bell curve, which aligns with the product lifecycle (PLC) model:

  1. Introduction Stage: The original iPod was Apple’s first consumer music device, introducing a revolutionary new way for people to carry and listen to their entire music libraries on the go.
  2. Growth Stage: With the integration of iTunes and the release of new iPod models, the product experienced rapid growth in sales and market penetration, becoming a cultural phenomenon.
  3. Maturity Stage: The iPod reached its peak sales during the maturity stage, as it became the dominant portable music player on the market.
  4. Decline Stage: As the market shifted towards smartphones and other digital media players, the iPod’s sales began to decline. This ultimately led Apple to discontinue the original iPod in favor of the iPhone, which could better meet the evolving needs of customers.

The iPod’s journey through the product lifecycle offers several valuable lessons:

  1. Adapt to Market Shifts: The iPod’s decline was driven by the market’s transition towards smartphones, which could provide music playback capabilities in addition to other functionalities. Successful products must be able to adapt to changing customer needs and market dynamics.
  2. Leverage Complementary Offerings: The iPod’s growth was significantly boosted by the introduction of iTunes, which provided a seamless content ecosystem and enabled users to easily manage and access their music libraries. Integrating complementary products and services can be a powerful strategy.
  3. Innovate Across the Lifecycle: Apple continued to innovate and introduce new iPod variants, such as the Mini, Nano, and Touch, to maintain the product’s relevance and appeal throughout its lifecycle. Ongoing innovation is crucial for sustaining a product’s competitiveness.
  4. Know When to Transition: Ultimately, Apple recognized that the iPod had reached the end of its lifecycle and made the strategic decision to discontinue it in favor of the iPhone, which could better meet the evolving needs of customers. Successful companies understand when to transition to a new product or service to stay ahead of the curve.

Mastering the Product Lifecycle

Navigating the product lifecycle is a crucial skill for product leaders to develop. Understanding the different stages, key milestones, and strategic implications of each phase allows them to craft a strategic roadmap that keeps their product offering relevant, competitive, and positioned for long-term success.

To master the product lifecycle, product leaders must:

  • Understand the Unique Challenges and Opportunities: Each stage of the lifecycle presents distinct challenges and opportunities that require tailored strategies. For example, during the introduction stage, the focus should be on building awareness and acquiring early adopters, while the maturity stage may call for differentiation and cost optimization.
  • Align Product Strategy with Lifecycle Stage: The product strategy must evolve in tandem with the lifecycle stage. This may involve adjusting the target market, value proposition, pricing, marketing approach, and feature roadmap to remain competitive and responsive to changing market dynamics.
  • Leverage Data and Customer Insights: Continuous market research, user feedback, and data analysis are crucial for informing strategic decisions throughout the lifecycle. This helps product leaders anticipate and adapt to shifting customer needs, competitive threats, and technological advancements.
  • Foster Cross-Functional Collaboration: Effective product lifecycle management requires close collaboration between various teams, including product, engineering, marketing, sales, and customer support. This ensures alignment, shared understanding, and the ability to quickly respond to changing market conditions.
  • Embrace Agility and Iteration: In today’s fast-paced business environment, product leaders must adopt an agile mindset, continuously experimenting, gathering feedback, and iterating on their offerings to stay ahead of the curve.

Phase 1 — The Product Development Phase: From Idea to MVP

Product managers are often tempted to strive for perfection before launching our offerings to the world. But the reality is that no product has been truly flawless from day one. The key is to embrace an iterative, customer-centric approach that allows us to quickly validate ideas and get a “good enough” version into the hands of early adopters.

  • Defining a Viable Product Strategy: Before we even think about launching a new product, our primary goal should be to find a viable strategy that is beneficial (desirable), feasible, usable, economically viable, and ethical. This involves conducting thorough product discovery and strategy validation work, which may require us to pivot to a different approach if our initial idea proves unviable. Read more on Fix Strategy
  • Launching the Minimum Viable Product (MVP): Rather than aiming for perfection, the objective should be to launch a “minimum viable product” (MVP) — a good enough initial version of the offering that can be quickly tested with early adopters. This allows product leaders to gather valuable feedback and insights to guide the continuous enhancement of our product.
  • Aligning the MVP with Innovation Type: The required quality and features of our initial MVP will depend on the type of innovation we’re pursuing. For disruptive products, a relatively basic version can be sufficient, as we saw with the first iPhone. However, for adjacent innovations that compete in established markets, we’ll need to ensure our MVP is differentiated and meets higher customer expectations.
  • The Evolution of the MVP Concept: It’s important to note that the original definition of an MVP was a throwaway prototype used to test strategic assumptions. Over time, the common understanding has shifted to viewing the MVP as the actual initial product release — the version we bring to market.
  • Embracing an Iterative Mindset: The key throughout the product development phase of the PLC is to maintain an iterative, customer-centric mindset. By launching a “good enough” MVP and continuously adapting our offering based on user feedback and market changes, we can ensure our products remain relevant, competitive, and poised for long-term success.

So, when embarking on our next new product development adventure, let’s resist the temptation of perfection and instead focus on quickly validating ideas, launching an MVP, and embark on an ongoing process of refinement and enhancement. It’s this agile, customer-driven approach that sets products up for sustained success.

Phase 2 — Navigating Introduction toward Sustainable Growth

The launch of product offering is just the beginning of an exciting, yet often unpredictable journey and the primary objective after that initial release is to quickly achieve product-market fit and experience sustained growth. But the path to get there can vary greatly depending on the type of innovation we’re pursuing.

  • Disruptive vs. Adjacent Innovations: For disruptive products, the focus in the introduction stage is on discovering how customers use the offering and allowing that to guide its progression. Think of how Twitter evolved from a simple status update tool to an information network — the founders had to adapt the product based on real-world usage patterns. Adjacent innovations, on the other hand, tend to require a shorter introduction period, as they’re addressing an existing market. This allows us to gather more insights about customer needs upfront and tailor the product accordingly from the start.
  • Monitoring Performance and Adapting: Regardless of the innovation type, it’s crucial that we closely monitor the performance and value creation curve of our newly launched product. If we see the curve stagnating or rising too slowly, we need to investigate the root causes and be willing to make adaptations. Sometimes, enhancing features or optimizing the user experience is enough. But in other cases, a more drastic pivot may be necessary, as we’ve seen with companies like Flickr and YouTube pivoting their original products.
Source
  • Navigating the “Chasm”: One of the biggest challenges in the introduction stage is bridging the gap between early adopters and the mainstream market. This “chasm” often requires significant product adaptations, such as improving the user experience, adding new capabilities, refining the underlying architecture, and adjusting the business model. The evolution of the Apple Watch is a prime example — Apple had to reposition the smartwatch from a lifestyle accessory to a dedicated health and fitness device to achieve broader market acceptance.
  • Embracing an Iterative Mindset: Throughout the introduction and growth stages, it’s important to maintain a flexible, iterative mindset. The product strategy is likely to be volatile, requiring frequent updates and enhancements to keep pace with customer needs and market dynamics. By closely i) monitoring performance, ii) being willing to adapt or pivot as needed, and iii) navigating the challenges of transitioning to the mainstream, we can increase the chances of our products achieving sustainable growth and long-term success.

Phase 3 — Navigating Product Growth: Sustaining Momentum and Fending Off Competitors

Once a product starts experiencing significant growth, it has achieved that elusive product-market fit and entered the coveted growth stage. But maintaining that momentum and fending off competitors will not be easy.

  • Achieving Product-Market Fit: When a product reaches the growth stage, it has effectively served the needs of mainstream users and customers and is now providing the desired business benefits. This is the point where the product has broken even and is generating positive cash flow.
  • Sustaining Growth: The product strategy during this phase must focus on sustaining that growth, penetrating the market further, and differentiating the offering from the competition. This often involves finding innovative ways to attract more users and customers, while ensuring the product remains distinct from copycat offerings.
  • Addressing Growth Challenges: As the user base expands and the product becomes increasingly feature-rich, managing the growth brings its own set of challenges. Dealing with a larger, more diverse audience and coordinating the efforts of an expanding development team requires a thoughtful organizational approach.
  • Techniques for Sustained Growth: To help sustain growth, companies may choose to unbundle the product, spinning off certain features into standalone offerings. Alternatively, they can create specialized product variants tailored to specific market segments, as we’ve seen with YouTube Kids.
  • Organizing the Product Team: It’s often helpful to have a single person in charge of the overall product, working collaboratively with additional product owners responsible for managing specific features or components. This structure is well-suited for the growth stage, where the product strategy continues to evolve, though not as dramatically as in the earlier phases.
  • Timing the Organizational Approach: Don’t wait until product-market fit is achieved to determine the right organizational structure. Start this process in the introduction stage, as the product’s value curve begins to rise steadily. This will ensure you have the right team in place to effectively navigate the growth challenges ahead.

The path to sustained growth is not without its obstacles, but by effectively managing the challenges, maintaining product differentiation, and organizing the team to support the evolving strategy, you can keep your offering on a trajectory of continued success. It’s a delicate balance, but one that separates the true market leaders from the also-rans.

Phase 4 — Maturity Phase: Strategizing for Extending the Product Lifecycle

Product managers often find themselves at a critical juncture when their offerings reach the maturity stage. Growth starts to stagnate, and they’re faced with a pivotal decision — do we extend the product’s lifecycle or transition it into a cash cow? This strategic inflection point requires a careful evaluation of the options and their implications.

Source
  • Revitalizing Mature Products: One approach is to breathe new life into the product and move it back into the growth stage. This can be achieved through a variety of techniques: 1) Enhancing Capabilities: Adding new features, improving performance, or expanding functionality can reinvigorate a mature product and make it appealing to customers once again. 2) Decluttering and Simplifying: Conversely, sometimes the best path forward is to remove unnecessary complexity and streamline the offering, making it easier and more intuitive to use. 3) Targeting New Markets: Introducing the product to previously untapped market segments or geographies can unlock fresh growth opportunities. 4) Bundling with Complementary Offerings: Combining the mature product with other solutions can increase its overall value proposition.
Source
  • Factors to Consider for Lifecycle Extension: However, a lifecycle extension is not always the right strategic choice. Several key factors must be weighed carefully: 1) Continued Category Attractiveness: If the product’s core market has lost its appeal, revitalization efforts may prove futile. 2) Avoiding the Cash Cow Trap: Extending the lifecycle only makes sense if the company doesn’t need to transition the product into a low-investment “cash cow.” 3) Availability of Resources: Breathing new life into a mature offering can be resource-intensive, requiring significant time and financial investment.
Source
  • Embracing the Cash Cow Approach: When a lifecycle extension is not viable, the alternative is to let the product mature and leverage it as a “cash cow” — a reliable source of business benefits that requires minimal investment. This strategy is particularly suitable when the company has other products in the pipeline or the ability to acquire new offerings. As a cash cow, the product becomes a core innovation, requiring a more conservative, defensive approach focused on protecting its market position. While the overall strategy may be stable, the company must still monitor market developments, track performance, and invest judiciously to maintain the product’s value for users.

Whether you choose to extend the lifecycle or transition the product into a cash cow, the key is to remain vigilant, adaptable, and focused on maximizing the value of your mature offerings.

Phase 5 — Strategies for Managing the Decline Phase

When the value a mature product generates starts to wane, we’re left with a critical decision: do we accept this as the final chapter or explore ways to resurrect the asset?

  • Accepting Decline as the Endpoint: One option is to simply acknowledge the decline as the natural conclusion of the product’s journey. This may be particularly prudent for B2B offerings sold with service contracts, where the end of sales and end of life can differ. In these cases, the focus shifts to retiring the product with minimal investment, while still honoring existing agreements. This could involve outsourcing or offshoring maintenance work, for example. Additionally, the company can proactively encourage customers to upgrade to a newer solution, perhaps by offering special discounts or incentives.

The key is to manage the decline in a controlled, strategic manner.

  • Resurrecting the Product as a Niche Offering: Alternatively, the company may see an opportunity to “resurrect” the declining product by repositioning it as a niche offering. By identifying a passionate, underserved customer base and tailoring the product to meet their specific needs, companies can sometimes breathe new life into a declining asset. This requires a keen understanding of the market and a willingness to embrace a more focused, specialized approach.

Ultimately, every product will reach the decline stage, and product leaders must be prepared to either gracefully retire the offering or explore opportunities to reposition it for a niche audience.

The key is to have a clear strategy for managing this final chapter, whether that involves a controlled wind-down process or an attempt to revive the product’s fortunes.

By approaching the decline stage with the same level of strategic rigor as the earlier phases of the lifecycle, product leaders can ensure they maximize the value of their mature offerings and position themselves for continued success.

Continuous and Adaptive Strategy Refinement: The Key to Sustaining Digital Product Success

Strategies Across the Product Life Cycle — The key strategic considerations for product managers at each stage of the product lifecycle
Strategies Across the Product Life Cycle — The key strategic considerations for product managers at each stage of the product lifecycle

Your product strategy should evolve throughout the entire lifecycle of a digital product, from introduction to eventual retirement. While the strategy tends to become less volatile as the product matures, it will continue to change and adapt over time.

Product teams must maintain a flexible, responsive approach to product strategy, regularly assessing the performance of their offerings and making adjustments as needed. This is crucial, as the strategy and execution for digital products are inextricably linked — they are two sides of the same coin.

The strategic work does not end once a product is launched. Rather, it is an ongoing, iterative process that must adapt to the changing circumstances and performance of the product throughout its entire lifespan. Product leaders cannot simply set a strategy at the outset and expect it to remain static.

As the product progresses through the introduction, growth, maturity, and decline stages, the focus of the strategy will shift. However, the need to continuously monitor, evaluate, and refine the strategy remains constant. Product leaders must be willing to make changes, whether that involves enhancing features, pivoting the target market, or even discontinuing the product altogether.

This flexibility and responsiveness are particularly crucial for digital products, which often operate in fast-paced, highly competitive markets. The ability to quickly adapt the strategy in alignment with evolving customer needs, market dynamics, and technological developments can mean the difference between a product’s success or failure.

Finding this article useful?

For more insights like this, be sure to follow me on Medium and subscribe to get my updates in your email.

Photo by krakenimages on Unsplash

Stakeholder Engagement: Key to Product Strategy Success

Product managers often find themselves caught in a delicate balancing act — navigating the needs and expectations of their stakeholders while also driving the product vision forward.

The reality is, that even the most brilliant product strategy is destined to fail if it doesn’t have the full support and buy-in of those who will be responsible for its execution.

Identifying Key Stakeholders

The first critical step is to clearly define who the key stakeholders are for your product. This involves conducting a thorough stakeholder analysis to map out all the relevant individuals and groups that have a vested interest or influence.

For commercial products, the key stakeholders typically include representatives from:

  • Marketing — Responsible for product positioning, branding, and go-to-market strategy
  • Sales — Engage directly with customers and understand their needs
  • Customer support — Interact with users and gather feedback on product performance
  • Legal, finance, HR — Ensure the product aligns with organizational policies and requirements

For internal, in-house offerings, the key stakeholders may come from:

  • Affected business units — The teams and departments that will use or be impacted by the product
  • Operations — Responsible for the day-to-day running and maintenance of the product
  • Line management — Provide oversight and strategic direction for the product

The goal is to identify all the key decision-makers, influencers, and subject matter experts whose buy-in and support are critical to the product’s success.

Analyzing Stakeholder Power and Interest

Once the key stakeholders have been identified, the next step is to understand their level of power and interest in the product. This can be done using a tool like the Power-Interest Grid, which categorizes stakeholders into four groups:

The Power-Interest Grid — By categorizing stakeholders using the Power-Interest Grid, product managers can develop tailored communication and engagement strategies for each group, ensuring effective stakeholder management and increasing the chances of project success.
The Power-Interest GridBy categorizing stakeholders using the Power-Interest Grid, product managers can develop tailored communication and engagement strategies for each group, ensuring effective stakeholder management and increasing the chances of project success. (more)
  1. Players — High power, high interest. These are the key decision-makers and influencers whose full engagement and support are essential.
  2. Subjects — High interest, low power. These stakeholders may have valuable insights and perspectives, but limited direct influence.
  3. Context Setters — High power, low interest. These are stakeholders whose support or opposition can significantly impact the product, even if they are not directly involved.
  4. The Crowd — Low power, low interest. These stakeholders have minimal influence and involvement in the product.

By understanding where each stakeholder falls on this grid, product teams can tailor their engagement and communication strategies accordingly. For example, players require deep collaboration and alignment, while context setters may only need periodic updates and management.

Engaging Stakeholders Effectively

Effective stakeholder engagement is critical to ensuring the product’s success. This involves:

  • Establishing clear communication channels and feedback loops
  • Regularly sharing updates, progress, and soliciting input
  • Addressing concerns and aligning on key decisions
  • Empowering stakeholders to contribute their expertise
  • Maintaining transparency and building trust

By proactively engaging stakeholders throughout the product lifecycle, product teams can ensure alignment, secure buy-in, and leverage the collective knowledge and resources of the organization.

The Power of Collaborative Workshops

Running collaborative workshops is a highly effective way to develop a shared product strategy, whether for a new offering or a significant product evolution. These interactive sessions offer several key benefits:

  1. Better Decision-Making: By leveraging the collective expertise, experience, and creativity of attendees, collaborative workshops lead to more informed, well-rounded decisions that consider multiple perspectives.
  2. Alignment and Shared Understanding: When stakeholders actively participate in the strategy-building process, it fosters a shared understanding of the product’s vision, goals, and key initiatives. This alignment is essential for successful execution.
  3. Stronger Buy-In: Stakeholders who feel their input has been heard and incorporated are more likely to champion the product strategy and lend their full support to its implementation.

Best Practices for Collaborative Workshops

To ensure these strategy workshops are a resounding success, it’s important to follow these best practices:

  1. Involve the Right People: Identify and invite the key stakeholders whose expertise, decision-making power, and buy-in are critical to the product’s success. This typically includes representatives from product, engineering, design, marketing, sales, and other relevant functions.
  2. Employ a Dedicated Facilitator: Assign an experienced facilitator to guide the workshop, keep discussions on track, and ensure everyone’s voice is heard. The facilitator should remain neutral and objective, allowing the participants to drive the conversation.
  3. Foster a Collaborative Mindset: Encourage an open, inclusive, and creative atmosphere where participants feel safe to share ideas, challenge assumptions, and engage in constructive debate. Discourage domination by the most vocal or powerful individuals.
  4. Base Decisions on Evidence: Ground the strategy-building process in empirical data, user research, and market insights, rather than relying solely on gut feelings or political agendas. This helps ensure the product strategy is rooted in customer needs and market realities.
  5. Document and Socialize Outcomes: Capture the key decisions, action items, and next steps from the workshop, and socialize them widely with the broader team and organization. This reinforces the shared understanding and commitment to the product strategy.

By following these best practices, product teams can leverage collaborative workshops to craft a product strategy that is truly aligned with the organization’s goals, customer needs, and market opportunities.

Overcoming Stakeholder Engagement Challenges

Stakeholder engagement can be a complex and challenging endeavor, as stakeholders may be hesitant to participate for various reasons. By proactively identifying and addressing these concerns, product teams can create an environment where stakeholders feel empowered to contribute effectively.

Overcoming Common Stakeholder Engagement Challenges — By proactively identifying and mitigating these obstacles, product teams can foster a collaborative environment where stakeholders feel empowered to contribute to the success of the product.
Overcoming Common Stakeholder Engagement Challenges — By proactively identifying and mitigating these obstacles, product teams can foster a collaborative environment where stakeholders feel empowered to contribute to the success of the product.

Some common stakeholder engagement challenges include:

  • Lack of Understanding about their Role: Stakeholders may not fully comprehend the importance of their involvement or how their input can shape the product strategy and development. This can lead to a lack of engagement or a perception that their participation is not valued. Solution: The product team should clearly explain the purpose of stakeholder workshops and meetings, as well as the specific ways in which stakeholder feedback will be incorporated. Emphasizing the collaborative nature of the process and the value of diverse perspectives can help stakeholders understand their critical role.
  • Past Negative Experiences: If stakeholders have been involved in previous initiatives where their input was ignored or their concerns were dismissed, they may be hesitant to engage again. This can breed distrust and a reluctance to participate. Solution: Addressing this challenge requires acknowledging past issues, committing to a more transparent and inclusive process, and demonstrating how stakeholder feedback will directly influence decision-making. Building trust through consistent, open communication is key.
  • Resistance to Change: Some stakeholders may be resistant to the changes or new directions proposed for the product, especially if it challenges existing power structures or requires them to adapt their processes and workflows. Solution: To mitigate this resistance, the product team should focus on highlighting the benefits of the proposed changes, both for the stakeholders and the broader organization. Providing a clear vision and rationale for the changes, as well as opportunities for stakeholders to provide input, can help overcome resistance.
  • Competing Priorities and Time Constraints: Stakeholders often have demanding schedules and multiple responsibilities, which can make it challenging to dedicate time and attention to product-related activities. Solution: To address this, the product team should be mindful of stakeholders’ time and make participation as convenient and efficient as possible. This may involve scheduling meetings at optimal times, providing clear agendas and action items, and leveraging remote collaboration tools to accommodate schedules.

By proactively identifying and addressing these common stakeholder engagement challenges, product teams can create an environment where stakeholders feel heard, valued, and empowered to contribute to the product’s success.

At the end of the day, the most meticulously crafted product strategy is worthless if it doesn’t have the full support and commitment of those responsible for bringing it to life.

By closely collaborating with our stakeholders and development teams, we can create a shared vision, secure buy-in, and unlock the true potential of our offerings.

It’s a delicate dance, to be sure, but one that separates the truly effective product leaders.

Thanks for reading!

To stay connected and get more insights like this, be sure to follow me on Medium.

As a fellow product enthusiast, be sure to connect with me on LinkedIn to continue this discussion, network, and access my professional network.

--

--

Nima Torabi
Beyond the Build

Product Leader | Strategist | Tech Enthusiast | INSEADer --> Let's connect: https://www.linkedin.com/in/ntorab/