Applying Strategy in Product
How different strategies can help our Products deliver value
Our friend John Doe has been very busy lately. ProductNation’s leadership is willing to fund a promising idea if he builds a strong business case. Stakeholders have been approaching him with several product ideas, business opportunities, and guidance on market analysis. Management is supportive of his newly acquired business development opportunities and is promoting The Scrum Team’s success across the organization.
The developers are looking forward to collaborating more closely with the company’s core business and stakeholders. The idea of forging a new product excites them the most. Everybody is eager to start analyzing requirements and begin development.
John is working with more people than ever. His interactions with different processes and tools have sky-rocketed. He knows that it will be complicated to elicit requirements for a large project with higher reach, scope, and potential value.
He asks himself
- How can I leverage my current experience with a project at this scale?
- Could there be other tools and frameworks more suitable for this scenario?
- What strategies can I use to deliver value to our customers, stakeholders, and organization?
John touched on an important subject, what strategies can he use to meet his goals? What tactics could that strategy employ? Well, let’s look for that old strategy guide, search for our pointing stick, and on we go to the chalkboard!
Strategies and tactics
Merrian-Webster defines strategy as:
A careful plan or method: a clever stratagem.
The art of devising or employing plans or stratagems toward a goal.
John notices that a strategy is just a planned approach used to accomplish a specific objective. Therefore, an item becomes strategic when it’s a fundamental part of the plan used to meet its goal.
Merrian-Webster’s strategy definition mentions stratagems, which defines as:
A cleverly contrived trick or scheme for gaining an end.
Skill in ruses or trickery.
Trick meaning a quick way of getting a result. For example, knowing the trick to throwing fastballs (baseball pitching grip) or playing the piano fast and accurately (piano technique). It makes sense that strategy guides are full of tricks that make it easy to accomplish the predefined objective.
John remembered his childhood and how he used to read strategy guides to beat video games. Without them, levels were more challenging, as he didn’t know their tricks. He also remembered being at a significant disadvantage to friends that knew them.
John understands how strategies can help him achieve his goals, but what about tactics? He often hears that strategic objectives are met with the correct tactical approach. Merrian-Webster defines tactic as:
A device for accomplishing an end.
Tactics are the operations or methods used to carry out strategies. That is why we call military equipment “tactical gear”; It’s also why the Product Owner focuses on the tactical approach while leadership on strategy.
ProductNation’s leadership defines the company vision, mission, and business strategies. The Scrum Team implements the strategic plan by taking a tactical approach via its product development.
Business Strategies
Business strategies intend to achieve specific objectives or generate certain outcomes. Different business strategies can lead to the expected results, allowing us to choose the best fit within our context. Suppose John’s goal is to increase MRR (Monthly Recurrent Revenue) by 20%. He could implement any of the following strategies to achieve his goal:
Innovate the product
John can investigate his customer’s pain points and analyze the feasibility and viability of innovating a feature, service, or option that would attract more customers, thus generating 20% more MRR.
Customer insights are crucial as they are the main driver for this strategy. Not taking the VOC (Voice of the Customer) into account could cause him not to meet the intended outcome.
Promote product differentiation
ProductNation’s competitors will try their best to gain more market share. John will need to analyze their products and services, as well as their business strategies. That way, he will get valuable insights for developing the best business strategy to meet his objectives.
Focusing on his product’s look & feel, ergonomics, or niches would make it stand out from his competitors, especially if customer feedback is incorporated. By delighting customers with a unique experience, John can retain and attract more customers; Helping him to achieve his 20% MRR increase.
Improve customer service
Product Management is not just about launching great products. It’s about delivering a great user experience that addresses a particular customer need in a feasible and viable way. John understands that customers are the main reason his product exists, and customer service is part of his customer’s journey.
ProductNation’s customer service will play a crucial role in this strategy as they are a vital communication line that can help retain and attract more customers. John can refine all customer service links in his product, making its access intuitive.
Target a specific customer demographic
John’s Product generates different information, including its customer’s location, age, interests, etc. Analyzing this information can produce valuable insights, especially when market information is available to discover and compare trends.
By uncovering market trends and devising what drives them, John can segment his customer’s demographics and target a specific group. For example, during the lock-down, more people ages 40–55 are consuming digital services. They value a clear and consistent User Interface that removes unnecessary information.
John can adapt the User Interface to meet the group’s needs and ask ProductNation’s marketing department to promote its enhanced inclusiveness.
Develop a pricing strategy
There are seasons when customers naturally consume more products and services, for example, the holidays. Competition is high during these times, and different marketing strategies can help customers decide on a product over another.
John can work with his stakeholders to determine which pricing strategy would be ideal for attracting and retaining customers. Promotions, bundles, and limited-time offers are some of the most common practices.
Military Strategy
There have been many military treatises discussing strategy and leadership; Among the most famous The Art of War by Sun Tzu, The Book of Five Rings by Miyamoto Musashi, The Prince by Niccolo Machiavelli, and On War by General Carl Von Clausewitz. The parallels between facing your enemy in a battle versus facing your competitors in the business world are noteworthy, making military strategies and tactics applicable to both scenarios.
It’s common to see military strategies used in different environments such as business, sports, personal growth, etc. The Art of war, in particular, has been studied and applied in several industries. For example, dealing with business competitors:
Sun Tzu said: There are five dangerous faults which may affect a general:
* Recklessness, which leads to destruction.
* Cowardice, which leads to capture.
* A hasty temper, which can be provoked by insults.
* A delicacy of honor that is sensitive to shame.
* Over-solicitude for his men, which exposes him to worry and trouble.
These are the five besetting sins of a general, ruinous of the conduct of war.
Netflix’s case is a clear example here. In 2000 Netflix approached Blockbuster with a merger proposal. Blockbuster declined as it saw no value in its offer and minimal to no risk competing against its business model. Ten years later, Blockbuster filed for bankruptcy.
Achieving business agility is strategically significant for companies who wish to prevail in today’s modern competitive landscape. The Art of War provides a relatable passage in Chapter 7: Maneuvering:
Sun Tzu said: In war, practice dissimulation, and you will succeed.
Whether to concentrate or to divide your troops, must be decided by circumstances.
Let your rapidity be that of the wind, your compactness that of the forest.
In raiding and plundering be like fire, in immovability like a mountain.
Another recent book is The 33 Strategies of War by Robert Green, where we can find surprising similarities with today’s business practices. For example:
Segment Your Forces: The Controlled-Chaos Strategy
* Speed and adaptability are critical elements in war, and come from flexible organization.
* Decentralize your army, segment into teams, and let go a little to gain mobility.
* Give your different corps clear missions that lift your strategic goals, then let them accomplish them as they see fit.
Hierarchical structures, extensive planning, rigorous training, and unit specialization are commonly associated with traditional military strategies. But as we just saw, modern techniques can also be traced back to classics military treatises. For example, the fundamentals for Agile frameworks, Lean practices, and self-managing teams are all mentioned. They have even been proven key in achieving victory in a military context.
In the end, it all boils down to leadership (military, business, or otherwise) applying the best practices needed to achieve their objectives. Value takes the stage, as it guides the organization towards meeting its ultimate goal.
Final thoughts
John is excited to learn how his work can contribute to ProductNation’s growth while taking on new challenges as a Product Owner. He continues to sharpen his skills with every step he takes toward building the business case for a new Product.
He is confident that his experience will lead him on the correct path towards customer satisfaction. This same path converges with his stakeholder’s expectations, as new business opportunities will benefit everybody in the organization.
Way to go John! We wish you good luck with your expanded responsibilities. Next time we’ll talk about our good friend Mary Jane and how she uses strategy as a Product Manager at WeAreProducts.
