The Product Manager vs. The Strategist
Your life is curated.
The coffee you’re drinking, the videos you’re streaming, and that pair of Converses you’re wearing — all your choices were driven by what was available and desirable. But who put those options there? Who decided that Nestle should create an espresso machine? Who made Youtube a household name? Who told Nike to purchase Converse?
Product managers (PMs) and strategists drive such decisions, and thus shape your world. Both choose which problems to solve and which goals to go after. Both turn grand visions into tangible goods and market realities.
At the moment, their worlds are disparate. PMs and strategists see things through different lens and maintain often-opposing priorities. But they’re actually two halves of a functional whole: to address the range of challenges modern markets present, both perspectives are necessary to win and keep winning.
Most companies value one or the other, and keep the two worlds separate. In such a system, PMs and strategists provide competing perspectives, rather than empower one another to create exponential wins for both customers and the business.
To understand how the two can collaborate, we must first understand how the product manager and the strategist think.
How do product and strategy relate?
Product connects customer needs with business goals, to produce goods and services that people use and buy, enabling the company to compete. As a field, it has become significantly more important to effective competition within the past few decades, particularly as the tech industry has risen. The direction can come from the top (PMs execute on executives’ visions) or from the bottom (PMs weave features into marketable stories).
Strategy considers the external and internal landscape to identify market gaps and opportunities, enabling the company to compete. As a field, it’s often held close to the executive team. The role is mature, but the nature of strategic work has changed significantly in past decades: competitive advantage has shifted from being the best in the world at a particular thing to being the most adaptable to evolving markets and customer needs.
When the two come together, companies often find breakthrough successes. Perhaps one of the clearest recent examples of this is the Nespresso system: the product addressed a strong (mostly unmet) need for high-quality but also high-convenience espresso, while the strategy enabled Nestle to sustain growth through subscription sales and hardware licensing.
To put it simply, both product and strategy aim to fulfill a company’s why.
Product begins with the what.
Strategy begins with the how.
So how does each role tend to think at each stage?
Note the following is simplified for clarity; there are many exceptions. The definitions of both product management and strategy are fuzzy and ever-evolving, so consider this a starting point to enable better collaboration, rather than a set of hard-line distinctions.
Breaking in to the market:
- Product managers find gaps of unmet needs using customer research. They identify problems with the strongest market impact by prioritising the list by highest pain or widest reach. For example, Youtube allowed customers to share and consume large video files by simultaneously downloading and watching them (aka streaming), rather than having to wait for the entire file to download first — a particularly important need given the speed of the 2005 Internet. Product managers pursue solutions to impactful customer problems, which then produce value for the business through direct or indirect sales.
- Strategists find gaps in the market via competitive analysis. They identify the biggest opportunities by a) considering what highly successful competitors are doing which they could do better, or b) what areas competitors might have missed which they could easily address. For example, Trader Joe’s realised that rather than selling as a cheaper alternative, they could reframe products of their own label to be a marker of quality and relevance to the interests of their customers. Strategists determine which opportunities can produce maximum new customer and/or business value.
Breaking through to the top of the market:
- Product managers win by a) addressing important unmet needs, or b) addressing met needs better than all their competitors, to the point that they drive customers to switch products. Correspondingly, their company’s business model is designed to win through sales (direct or indirect) that correlate with the success of the product. For example, the iPod, while not the first digital music player, introduced the Shuffle feature and was the first to display names of songs instead of filenames, creating a superior music listening experience. Product managers focus on a clever what.
- Strategists win by capturing opportunities in unique ways. They have figured out a) how to sell the same things cheaper (e.g. through strategic partnerships or complementary revenue streams) or b) how to create new value from what they’ve already got (e.g. by addressing new markets). For example, Uber accomplished both of these simultaneously by realising they could provide cheaper taxi services by turning their customers into suppliers, via UberX. Strategists focus on a clever how.
- Product managers scale their solution by meeting the needs of wider audiences. As their products are adopted by more diverse customers, they adapt their products to these new customers, who have different needs. This is known as the Technology (or Product) Adoption Curve:
- Strategists scale their solution by improving their business model to undercut competitors and create new value. They might forge new partnerships to cut costs, identify new marketing channels by which to reach customers, or find new revenue streams for the same opportunities. A useful tool for identifying these opportunities is the Business Model Canvas:
Maintaining a competitive advantage at the top of the market:
- Product managers continue to create new or complementary features and products to to address evolving customer needs. Once they’ve solved one customer problem, they might unlock related or adjacent customer problems. For example, as Google became a dominant email provider with Gmail, the offer of a matching calendar, and eventually a suite of productivity apps, was a natural progression of user needs.
As competitors catch up and markets reshape and customer expectations change, PMs evolve their products, continuously searching for today’s most relevant needs. To advance, adaptability is key.
- Strategists continue to find new ways to create value for the business and for customers as competitors, markets, and customers change. For instance, once they’ve created a set of strategic partnerships for one product, they might realise they could leverage this network to easily create another one. Amazon did this, for example, by turning their internal virtual server system — which was created to increase Amazon’s retail efficiency — into an external product that acts as its own revenue stream, Amazon Web Services.
As new competitors enter and markets grow or shrink and customer expectations change, strategists continuously search for new ways to gain the edge. To advance, flexibility is key.
Reconciling product and strategy
Some companies, particularly within tech, have figured out how to leverage the best of both worlds.
Facebook, for example, is widely believed to have originally won the market by creating exclusivity around social networks, a strategic decision rather than one that directly solved a need. But this exclusivity was created around real-life networks, a decision which (knowingly or not) addressed a customer need by enabling people to use their real identities and create an online life that complemented, rather than adjuncted, their real lives. Fast forward a decade and Facebook is building drones to bring Internet access to remote areas (a strong customer need), addressing the strategic problem that they’ve saturated their accessible markets. Facebook has arguably mastered the balance of product and strategy, crafting solutions that empower their business by solving problems for their customers.
Amazon is (perhaps controversially) another elegant example of this balance — its commitment to passing profits back to customers in the form of low prices gives it a strategic advantage almost impossible to crack (even when competitors attempt to temporarily take on losses), and this business model only remains sustainable as long as it is a market leader. So Amazon has created a cycle in which: 1) it takes the lowest profits, so 2) it has the lowest prices, so 3) it has the most customers, which 4) keeps it alive despite having lowest profits. Customers needs are met in the best way possible through a strategy that is incredibly difficult to replicate.
These examples and the interplay between product and strategy that we see today is only the tip of the iceberg. Most modern companies still prefer or excel at one or the other, and the roles rarely speak, often lacking understanding or awareness of the other.
Imagine how much more value we could create, to businesses and customers alike, if we changed that. More on how we got here at this post, and how product and strategy should play together in the next coming post.