FUNDAMENTALS OF PRODUCT LEADERSHIP: THE PRODUCT STRATEGY
A product leader’s guide: 5 principles of a product strategy that empowers teams
Product strategy requires critical thinking and careful decision-making that brings focus built on valid insights, and acute execution to deliver any meaningful impact while remaining open and humble to pivots and change
A product leader’s role is to build empowered product teams and give them the space to solve meaningfully challenging problems. If such conditions are met, we can expect ordinary people to create extraordinary products as they will have focus and the opportunity to leverage their skills and talent.
To create this environment, product teams require a sound Product Strategy otherwise:
- A significant portion of efforts will go to waste
- Teams will lack focus and alignment of brainpower to solve high-priority business problems
By definition, strategy refers to the approach and its rationale for attaining a business goal. Strategy can be thought of as: “We have four paths to get to our goal/vision and we are thoughtfully choosing option 3”. The details of how we will move along our strategy are referred to as ‘tactics’.
In the realm of product management, Product Strategy is the answer to the question: “How do we realize the product vision while meeting the needs of the business?”, and the tactics are outlined in the product roadmap and through product discovery efforts.
In action:
- Product strategy helps teams decide which problems to solve
- Product discovery helps teams uncover tactics that solve problems
- Product delivery builds the solution
- Product marketing brings the solution to the market
Defining and implementing product strategy is difficult because it is challenging to:
- Choose what to focus on and why
- Generate, identify, validate, and utilize meaningful insights
- Move from insights to actions
- Execute proactively without resorting to micromanagement
- Adapt to new conditions and changes in market dynamics
Building focus, generating insights, having an impetus for action, and executive effectiveness are the foundations of a successful product strategy. In other words:
Product strategy requires critical thinking and careful decision-making that brings focus built on valid insights, and acute execution to deliver any meaningful impact, while remaining open and humble to pivots and change
1. Product strategy must bring focus
The most important aspect of building a winning product strategy is when the product leadership understands what to focus on and why.
Don’t just curve out work to be done
Product teams that are constructed to serve the business by opening up roadmaps to the requests and whims of various internal departments, will move away from understanding customer needs and create little value. This generally happens when the product lacks leadership and the CEO and other senior stakeholders generate work for product teams. Such situations will be referred to as when product teams have priorities but lack focus with limited to no results.
What it means to have focus — it’s easy to generate work, but it’s difficult to get the right thing done that will have an impact and ensure success
For example, every few years, the entire code base of a software product can be rewritten and renewed; however, the rework will create zero value for the end user/customer. But work has gotten done! Therefore it’s quite easy to generate work, but difficult to deliver impact and that’s the ultimate true worth of a successful product leader.
Trim priorities to a maximum of 2–3 projects
Every product team and organization should choose its battles wisely and focus on a few things that will truly make an impact. And this means 2–3 key projects and problems to work on. When a product team has 20 or more priorities to work on, it’s an indication that the team will likely deliver little to no value; but an indication that the leadership has aimed to diversify its bets to minimize risks, which shows they haven’t performed well in identifying what users/customers expect and how to answer it.
Benefits of focus
There are three major benefits to choosing only a small number of priorities to focus on:
- Product teams are not overwhelmed and do not have to continuously switch across many “high-priority” projects
- The leadership can focus on developing the longer-term priorities of the product organization while helping the team manage the current high-impact project that will be delivering the largest return per economic unit invested (i.e. resource time)
- The product organization as a whole manages to deliver work and accomplish tasks that are critical to motivation and team durability
2. Product strategy must be built on valid insights
Great (product) strategy is not uncovered from a consulting management tool, matrix, chart, triangle, or presentation. Instead, successful strategic (product) leaders identify the one or two critical projects that can produce the biggest ROI and then concentrate actions, efforts, and resources on them.
However, to pick those winning projects, product leaders and teams require preparation and critical thinking that considers the organization’s strategic context of the internal environment — which entails the corporate objectives and product vision— while understanding the dynamics of the external environment that includes the enabling technologies, customer needs, and trends from immediate and adjacent industries.
To prepare and think critically for an effective product strategy, product leaders require insight to build upon and there are five sources for it:
- Product data
- User/Customer Research
- Technology advancements
- Industry trends
- Internal learning and know-how
Product data: quantitative insights
Successful product strategies are built on the analysis of product data related to the product’s business model which includes the acquisitions funnel metrics, customer retention and recommendation factors, sales data, user consumption habits and behaviors, and other indicators that can vary depending on the state and conditions of the organization.
These data points and indicators can be collected either by running one-time experiments or by continuously collecting live data. And need to be configured and implemented from the early days of the product launch.
While after a period most of the data will indicate repetitive patterns that lack meaningful insights, it’s crucial to continuously observe and run tests to stay on top of trend changes and leverage them towards impactful action.
User/Customer Research: qualitative insights
While user/customer research does not carry statistical significance, it can deliver profound qualitative insights that can shape the product strategy. There are two forms of qualitative insight:
- Evaluative insight: these are collected when we know the problem we are solving, have prototypes of solutions in mind, and are therefore looking for evaluative feedback
- Generative insights: these are collected during any interaction with users/customers when (net) new learning is uncovered that can lead to better and larger opportunities
Therefore it is critical for a successful product strategy that product teams have continuous and ongoing interactions with users/customers to stay on top of their insights. In product management, this mainly happens during product and customer discovery.
Technological advancements are product strategy insights
Technology as an enabler of solving human-centered problems is constantly changing and occasionally offering new and better possibilities and opportunities. Therefore every product leader must monitor and understand its technology landscape and its impact on its product strategy.
The only challenge that may arise is when new technological progress arrives at your doorstep and feels a bit like a black box. If so, then the technical leads will need to take a proactive role in communicating the impact of the progress and building prototypes for the larger organization to accept and work with.
Industry trend insights
Your immediate industry and those adjacent can be a massive beacon to guide product leaders in developing and thinking of new possibilities and solutions. To ease this process, it’s important to follow the several analysts, reporting agencies, and consulting firms that cover your industry and those adjacent to you.
- Consulting firms’ insights: while consulting firms such as McKinsey and BCG can bring in focus and experience from the industry to help build strategy, most often, their input is recommended at the corporate or business strategy level over product strategy and the typical duration of their engagement is rarely enough to garner the level of depth and relevance required for actionable product strategy.
- However, depending on the size of the organization, it’s important to have an internal strategy team (e.g. Samsung Global Strategy Group) that is consistently working on and assisting senior leaders including the product leaders to build their strategies.
Internal learning and know-how as insight
Often, product teams learn immense insights during product discovery. But most often those insights remain inside those teams and rarely get communicated across the organization. The best way to overcome this issue is for the product leadership to connect the dots between the teams, discover opportunities through weekly 1:1 with the product managers, and pass them along through monthly group-level all-hands meetings.
This sharing and communication process helps:
- Smoothen the information-sharing process
- Build and align the right mindset across teams and their members
- Not just the immediate product teams, but the broader organization (e.g., marketing, sales, legal, engineering, etc.) openly share and discuss insights
- Build upon each other’s insights and discover new ones
3. Product strategy needs to act toward a mission
Once the product team has its insights in place, it’s time to act on them. And there are two approaches to taking action:
- Building a team of mercenaries: this is when the product leadership thinks it knows what features need to be built and what projects to be worked on and fills up the product roadmap for the product team to deliver on. Under these circumstances, the product teams lack the sight of a problem to solve and the ownership and accountability associated with feeling empowered
- Building a team of missionaries: this is when the product teams are provided with a meaningful problem to solve and are empowered and given the space to discover customers and products and be held accountable for results. Consequently, as product teams are provided the strategic context and the problems space they will be solving for, the only thing left for the leadership is to measure progress through formalized objective tracking techniques such as OKRs that truly measure what matters to progress
4. Product strategy needs to be actively managed
Once the product team is focused, has its insights in place, and has action-oriented objectives locked down, it’s time for the product leadership to actively manage efforts as rarely does a product strategy survive an initial encounter with the real world.
All product strategies require active management and assistance with the removal of obstacles and bottlenecks which may include the following:
- Dependencies on other internal teams including engineering, marketing, content, revenue, support, legal, etc.
- Lack of access to specific technologies or know-how that was not previously planned for
- A major customer issue arises while teams are taking action that needs immediate attention
- A serious business concern that impacts key business objectives arises that requires product pivot or change in action
Product leaders need to have active engagement with teams to identify, track, and resolve such obstacles and impediments and the main source of this process will be the weekly 1:1 with the product managers.
The weekly 1:1 will also serve as a coaching session for the leaders to coach the product managers on how to best solve the issues while connecting them with stakeholders who can assist in problem-solving. This leadership style will be servant leadership that aims to stay away from command and control and empower members toward growth.
5. Product strategy needs to consider pivot(s)
The logical product leadership process is to build a product vision, craft a product strategy upon that vision, and then execute that strategy. To minimize risks, it’s important to realize that the vision needs to be a solid 5–7-year outlook that should rarely change, however, the product strategy, depending on the insights product teams discover, can be more flexible and open to pivoting to new ones, especially when more opportunistic or low-cost procedures are in the making.
With an evergrowing pace of change, strategic pivots are inevitable
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