What is Good Product Strategy?

strategy-dilbert

“What is your Product Strategy? YOU NEED A STRATEGY.”

When I replay this scene in my head, I can hear the CTO very audibly yelling (slash pleading) with our product team. He was on edge. We had been experimenting towards a very concrete goal for two months, and had made a lot of progress. We had learned so much about what was preventing users from signing up on the site, and it was a lot clearer which direction in which we should be going. BUT we still had to test our ideas.

This didn’t sit well with the CTO because in reality he didn’t want a strategy, he wanted a plan. He wanted a list of what we were going to build, and when we were going to build it. He wanted to feel certain about what we were doing when we all came in tomorrow, so he could measure our progress based on how much we built. It’s not his fault though. This is the way we were taught to think about Product Strategy.

Most companies fall into the trap of thinking about Product Strategy as a plan to build certain features and capabilities. We often say our Product Strategy are things like:

  • “To create a platform that allows music producers to upload and share their music.”
  • “To create a backend system that will allow the sales team to manage their leads.”
  • “To create a front of the funnel website that markets to our target users and converts them.”

This isn’t a strategy, this is a plan. The problem is that when we treat a product strategy like a plan, it will almost always fail. Plans do not account for uncertainty or change. They give us a false sense of security. “If we just follow the plan, we’ll succeed!” Unfortunately, there is no guarantee of success here. (I wish there was, our jobs would be SO much easier!)

These product initiatives aren’t bad, they are just communicated at the wrong time and with the wrong intentions. When we lock ourselves into planning to build a set of features (ehem, Roadmaps), we rarely stop to question if those features are the right things to build to reach our goals. We stop focusing on the outcomes, and judge success of teams by outputs.

We need to have a plan but the plan shouldn’t be “build feature x.” Our plan should be to reach our business goals. We need to switch from thinking about Product Strategy as something that is dictated from top to bottom, and instead something that is uncovered as we learn what will help us achieve our objectives.

Product Strategy is a system of achievable goals and visions that work together to align the team around desirable outcomes for both the business and your customers.

Product Strategy emerges from experimentation towards a goal. Initiatives around features, products, and platforms are proven this way. Those KPIs, OKRs, and other metrics you are setting for your teams are part of the Product Strategy. But, they cannot create a successful strategy on their own.

We need a few core things for our Product Strategy to be successful:

Vision: The vision is your high level, ultimate view of where the company or business line is going. In large corporations, you want to narrow this to the business line or customer journey. In smaller companies, this will be your company and product’s overall vision. Think long term here, and keep it qualitative. This is a good chance to talk about competitors, how customers will see you, and ambitions for expansion.

Challenge: The challenge is the first business goal you have to achieve on the way to your longer term vision. Which area of your customer journey or funnel needs to be optimized first? It’s communicated as a strategic objective that helps align and focus your team around a certain aspect of product development. This can be qualitative or quantitative. Try to keep these still in broad, high level terms. This one is the hardest for me to personally wrap my head around, but check out the example below for some clarity.

Target Condition: The target condition helps break down the Challenge. Challenges are made up of smaller problems you need to tackle along the way. These are set in terms of achievable, measurable metrics. When you set a Target Condition, your team shouldn’t know exactly how to reach it tomorrow. They should have a good idea of where to start looking through.

Current State: This is what the current reality is compared to the Target Condition. It should be measured and quantified before the work starts to achieve the first target condition.

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