The Startup
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Rocking at Product Strategy: 3 steps and 10 tools to succeed where most companies fail

1. Not setting a (real) strategy at all

  • Focusing on quarterly targets prevents creating a long term strategy
  • “The world changes too fast; by the time we created the strategy, it will no longer be valid”.
  • Top-level management would say they already have a strategy but it is not formulated anywhere
  • Supposedly not required: “the product is too small”, “we are only doing optimization”, “we are in the discovery phase, so we don’t have a strategy yet”.

2. Insight-less strategy

3. Setting the right “flight level”

  • If it is too high level, it gives us no clarity nor alignment among teams on where to focus our efforts. With “Increase conversion 2x”, you will undoubtedly see teams making efforts, but the lack of alignment will result in a lot of small increments that do not add up to your desired goal.
  • If it is a list of activities, it focuses on the solution rather than the problems to tackle. This goes against the idea of empowered product teams, and it will likely reduce the impact you expected and the level of innovation achieved.
  • The product listing team will personalize the products sort order considering past user behavior
  • The product description team will include similar options that were purchased by others that match the current user’s profile
  • The product reviews team will highlight reviews of social friends (considering social login)
  • The product checkout will remember payments and shipment preferences

Why is Product Strategy important

  • Make a serious choice of what problems you will tackle (and share that with stakeholders).
  • Clearly say what you will not work on
  • Align teams (not only product teams) towards the same goal

Is strategy just for top leadership?

How to create a great Product Strategy

0. Gather information

A proposed way to distribute information responsibility.
No excuses, there is plenty of market information available

1. Generate insights

  • Tool1: Core value proposition + Blue Ocean ERRC
  • Tool 2: Opportunity Solution Tree (first part)
  • Tool 3: 3 Horizons of Growth — McKinsey
  • Tool 4: Lego’s innovation Matrix
  • Good old brainstorm

2. Select

  • Tool 5: DHM (Delight, Hard to copy, Margin Enhancing) by Gibson Biddle
  • Tool 6: Google’s 70/20/10 rule
  • Tool 7: GLEe model by Gibson Biddle
  • “Get Big on” is an excellent follow up for thinking about your core value and how to increase it.
  • “Lead” helps you select opportunities that are new and growing and that if missed, it may kill your business (as in the infamous Kodak example).
  • “Expand” is similar to the 20% of the 70/20/10 or the second time horizon in the McKinsey model.
  • Tool 8: Strengthen the core

3. Synthesize

  • All previous diagrams
  • Tool 9: The “drivers” model
You can include a supporting principle. For example, last year, we used “Data tracking” as a supporting principle, as we were trying to build new data analysis capabilities for all our products.
  • Tool 10: Kernel model
  • “Strategy is choice. Strategy means saying no to certain kinds of things” — Michael Porter.

Summary

In the next article, I will be talking about communication and feedback. Subscribe or Follow me to be the first one to read it :)

Resources

  • I’m writing a book to describe the process to successfully create and link the Product Strategy, Roadmaps, and OKRs.
  • Product Strategy Template: this is a short document that captures the essence of the process described.
  • Part II and III are now available — follow up with the last 2 steps of the process
  • A previous (short) article about Strategy synthesis and communication:

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Nacho Bassino

Working on online products, currently as Director of Product at XING. Passionate about technology and amazing web/mobile products.