Product strategy: What to think about when thinking about product strategy
During the past months, I have been thinking quite a while about product strategy and how to use it at its best. One thing that fascinates me is that, despite many articles and books written on the subject, product strategy still seems to be one of the hardest product skills to nail.
What is the root cause of a failed strategy? Is there any common path that seems to be recurring? The answer is, of course, circumstantial but I believe that there is one essential factor that is fundamental for succeeding with a product strategy: its purpose. Being clear on why you have a product strategy, which questions it should answer, and how it aligns with the other elements that guide the company operations (KPIs, OKRs, sprint planning…) is the single most important thing to get right. So what is the purpose of a product strategy then? Simply answering that question will get you a good understanding of where your company stands.
If you ask me, you’ll get one simple answer to that question: the product strategy’s purpose is to describe what is the good we want to bring into our customers’ lives. Which problems will we solve for them or how will we help them by creating new opportunities with our product(s). A product strategy never talks about features but describes the outcomes that we want to drive, the behaviors that we believe will create business value.
Having those outcomes clear and formulated from a customer perspective, is the single most powerful tool that a product organization can have. It will help in prioritizing, making the right decisions every day, and create a sense of commitment and fulfillment.
Product strategy is in my eyes a means to execution, it is the tool we use to make decisions that bring us closer to our product vision.
It might seem really simple, but I come to realize that failing in connecting strategy to execution is the most common pitfall companies fall into. I have seen product strategies used as a theoretical exercise in a slide deck more than a guide and I have seen them yet too many times being a too specific artifact. Besides purpose what should one think about when thinking about product strategy?
How we connect strategy with execution at Hemnet
When recently working on Hemnet’s three-year product strategy I started to list what I think are the most important things to think about when defining a product strategy, to make it fit for its purpose. I cooked it down to four simple principles that I think are the backbone to any good product strategy.
Timeframe
No matter if you are working on a startup or on an established company, before even thinking about naming a product strategy you should think about your timeframe. A product strategy needs to hold, at least for one year, otherwise, it will hurt you more than helping you. The first question to ask yourself: what is the horizon you can commit to? If you can’t commit to at least 12 months, think twice before starting a product strategy.
There is no gain in having a strategy if every couple of months you have to change your direction because you have to chase an investment round. If that is your situation accept that you are not ready for strategy yet and put your focus on the purpose of your company. Your attention should be on defining why your company should exist, validating that the problem you are trying to solve is big enough, understanding if you are solving it in a unique and hard to copy way, and on testing your riskiest assumption. Product strategy is a powerful tool if used at the right time. If you are not there yet, good luck in getting to that stage.
If you can invest in 12 months of focus congrats, you are ready for defining a product strategy!
I think the optimal timeframe for a product strategy is three years, broken down yearly and checked quarterly through OKRs (or a similar goal-setting tool). Three years is a long enough period to get ambitious, yet a not too far away horizon that makes it impossible to scope.
Make it explicit
If you want the product strategy to work, you gotta make it explicit. There is no use of a strategy with fluffy words that every single person in the product organization can interpret in its own way. The strategy should be a tool to be used to make decisions every day, therefore it cannot be ambiguous.
Forget all the vague words, superlatives, and taglines, they are amazing for a catchy sentence but will not do you any good in a product strategy. The best thing you can do with a product strategy is to give a clear indication of exactly what kind of behavior you want to drive. The more specific you can get on the behavior, the better it is. This doesn’t mean that you should define how you get to that behavior, that will be the discovery work done by the product teams, but you should be really clear on the final goal and how that will benefit the business.
Making it explicit also means that everyone working on product should be able to explain the product strategy with their own words, which brings us to the next point...
A product strategy is not a one-woman show
There is no doubt that defining the product strategy is the most important responsibility of a CPO. But I also firmly believe that a product strategy is a collaborative work.
The CPO's responsibility is not only to clearly point at the direction we want to reach but also to encourage and invite the product teams to co-create the strategy so that it can be formulated in a way that is clear and most importantly inspiring for the ones who should work with it.
This means that you should hold the vision but be really flexible on the wording and way of measuring, allowing the teams to have a saying.
It also means that your work with the product strategy is not done until it is completely anchored in the product organization. The strategy should live in every sprint planning and not be buried in a slide deck that you maybe remember to look at once a year. This means constantly explaining it, answering new questions that come along, introducing it to new hires, referring back to it for every decision, create a forum to ask questions about it, and if there is no question, start with asking some yourself to encourage the dialogue around it. It means constantly connecting the strategy to the daily operations and create a network of ambassadors who can have the strategy as their decision backbone.
Give directions, not constraints
The main purpose of the product strategy is to help support execution, therefore it is vital to make it extremely clear how the strategy connects with OKRs or other goal-setting tools that you use in your organization. It is also fundamental to make it clear that the product strategy is a representation of our best bets at that specific time, but it is not a ”never to be changed law”. Quite the contrary, connecting the outcomes we want to reach with the objectives for the years and adding into that circle a quarterly check, creates a feedback loop that helps to check the strategy health-state.
Outcomes should be changed if new evidence arises and that is not a failure, it is learning. The better you are at feeding the company strategy with constant learning, the faster you will be able to validate or pivot it. Just be really careful with the timeframe: a good product strategy is ambitious and requires behavioral changes and every behavioral change takes time.