All things product strategy

Product strategy is important. Everyone knows that. However and shockingly, many teams don’t have a product strategy. At least not one that is written down. Oftentimes, individual product people have a mix of vision, strategy, and roadmap in their head but haven’t defined them clearly. I believe this is because everyone “knows” what product strategy is and that it is important. In reality, though, it’s this vague concept that we don’t truly understand. 

I wrote this article in order to collect and structure my thoughts on the topic and I am still not sure I fully grasp it. Nevertheless, here is my current thinking on the product strategy and its connection to vision, roadmap, and backlog. At the end of this article, I will give a real-world example of a product strategy we defined recently. 

Let’s start here. What is the product strategy?


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The product strategy are major steps en route to achieving the vision

In a nutshell, the product strategy is nothing more than a system of mid to long term problems you need to solve on the way to fulfilling the product vision. It is a high level, overarching plan. Completing each individual step makes the vision a bit more real. 

The product strategy covers the next few months up to a few years. Each step in it includes the business outcomes you want to achieve, the key differentiators of the product, planned initiatives, and measures that define success. But not every step is equally well defined. The near and mid-term steps in the development of the product should be clear. Whereas the steps that follow become increasingly uncertain the more they are in the future.   

As described in the great book Inspired by Marty Cagan, a useful product strategy consists of steps that are centered on solving problems for individual customer groups, personas, or markets. This allows you to focus on the specific needs of those segments one at a time. Thus, you end up building out your product step by step. 

The connection of product vision, product strategy, roadmap, and backlog 

The product strategy is one of the four artifacts that explain the plan for your product. The other three are the product vision, the roadmap, and the backlog. To understand what product strategy is means to understand how it relates to the other three. 

The four artifacts are connected hierarchically covering decreasing time horizons. As such, product vision is the most long term. It informs the product strategy which is the basis for the roadmap which informs the most near term element, the backlog.

The vision describes the target state far in the future you are trying to achieve. It should concisely describe the purpose of the product and which problems it solves for your users in the future. 

The vision forms the basis for the product strategy. These are the big problems you will be solving to achieve your vision. 

The roadmap is the translation of the strategy into a plan for the near term future. It includes the things you will be focusing on in the next months to year. 

The backlog is a structured collection of things to focus on in improving a product in the immediate future. (It is also a great newsletter that you can subscribe to for free. 😉)   

It’s important to note that the transition between strategy and roadmap as well as between roadmap and backlog are not clear cut. They are gradual transitions. Elements of the strategy will be directly on the roadmap. The same is true for roadmap elements that can end up directly in the product backlog. 

In all of these it’s important to remember that we are unable to predict the future. If new facts arise we have to be able to adapt. 

The more an artifact suggests a certainty about the future the more you should actually be willing to change it. Roadmaps are often very concrete and suggest a clear future. Visions can be vague. You should be willing to change the roadmap easily but the vision only in very special circumstances.

Why is the strategy needed?

Three reasons explain the need for a product strategy.

One, it gives purpose to the team’s daily work by connecting what they are doing to the bigger picture. A good product strategy inspires the team and increases motivation. Two, it aligns various stakeholders towards a goal and thus helps in collaboration between different teams and departments. Three, it provides focus for the product team helping in prioritization and resource allocation. It is a good reason to reject feature requests.

How to create a strategy

The process of creating a product strategy by itself is not complicated and very similar to how you create a product vision. Creating a good product strategy is hard, though. 

There is no one size fits all approach. As mentioned above, it makes sense to define the individual steps in the product strategy along the problems of specific user groups, verticals, or markets. You could say that each step along the product strategy means finding the product/market fit for one market segment.

In my experience, the following three principles serve as useful guidelines in creating a good product strategy. Keep them in mind when defining yours.

  • Understanding your customers and business needs
  • Involving others
  • Writing it down

1) Understanding your customers and business needs

The deep understanding of users, customers, and the business forms the basis of any product strategy (and of the vision).

You need to have an understanding of the unfulfilled needs and wishes of possible customers in various markets, what competitor products offer, and how you will differentiate yourself. To build this deep understanding, you need to conduct product discovery. As I have covered extensively, this increases the chances of success for any product development effort and should already be an ongoing activity. If this is not the case, the most impactful thing you can do is simply talking to users regularly and watching them interact with your product.

At the same time the product strategy needs to fit  to the overall company strategy. If the company is focusing heavily on the east Asian markets, it probably doesn’t make sense for the product strategy to be centered around solving issues of South American customers. Therefore, make sure you are always connected to key stakeholders and leaders in order to have a sense of the business direction.

2) Involving others

You will need help from others – sales and marketing come to mind immediately – when implementing the strategy, i.e. when building the product. They need to be convinced of the direction the product is moving. You need their buy-in to the vision and to the strategy.

The same is true for the product team itself. If they don’t believe in the strategy, they won’t be as motivated and less effective. The easiest way to get the buy-in is to involve key stakeholders and the team in the creation of the product strategy. 

The best way to do this in my experience is to NOT have a big brainstorming/strategy creation meeting with all involved. These big meetings are too much influenced by interpersonal dynamics and are rarely productive. 

Instead, I suggest getting input from the most important stakeholders in one on one talks. Then, come up with a first version of the strategy together with the product team. Again, get feedback from the stakeholders one on one and adjust the product strategy if needed together with the team. Do this a few times until you define the final version together with the product team. As a last step, share it in some official decision making committee where all important stakeholders are present and get the official sign off there. 

3) Writing it down

This should be obvious but many product people only have the strategy in their head. You need to write it down. This makes it tangible, official, and real. There is no one format on how to do that, although the Product Strategy Canvas from Melissa Perri and the Product Vision Board from Roman Pichler are both very useful defaults.

Whatever works for your circumstances should be fine. You just need to make sure the product strategy includes the necessary context: the main goals, markets, target customers, product differentiators, accompanying initiatives, possibly the budget, and the measures you will be using to define progress. 

A real world example of defining a product strategy

To make things more tangible, here is how we recently went about creating a strategy for a product. I modified some of the contents to account for confidentiality. This example is certainly not perfect but I hope it may offer some guidance.

The situation

As context, the company I was working with sells smart home devices. The team’s task was helping service agents within the company solve customer support cases. There were three levels of support agents with increasing degrees of expertise. As the team was starting out the service agents were using multiple tools that directly interacted with the control units of the devices, not always in a controlled way.

The overall business goal was decreasing customer support costs and additionally the CTO gave the order to eliminate junior agents directly interacting with the control units because this sometimes and unknowingly made the problems worse.

The product vision

So, we first went about creating a vision. We did several rounds here including some individual brainstorming and big alignment meetings (don’t do them!). We came up with the following vision.

Our support agents have a one stop shop where they are quickly able to view the status of the devices. All cases are solved at the appropriate support level and customer satisfaction increases after interaction with our service agents.

The product strategy

We then defined the strategy. We did this also in several rounds. The approach was always to formulate the strategy within the product team and then get feedback from key stakeholders. We collected that feedback and updated the strategy in the product team. After several rounds of this we presented the strategy in a steering committee where everyone signed off. 

We didn’t use any official templates but formulated the strategy as a series of goals. With each goal we defined the things we would focus on, key measures, and cross team initiatives.

Goal 1: All service agents in Europe exclusively use our product for case work on the top 5 products until mid 2024 

  • Our main focus: usability and onboarding
  • Our measure of progress: decrease the percentage of European service agents that use other tools than the one we built to 0%
  • Cross team initiatives: rework tech infrastructure 

Goal 2: All service agents worldwide exclusively use our product for case work on the top 5 products until the end of 2024

  • Our main focus: communication, onboarding, region specific needs
  • Our measure of progress: decrease the percentage of worldwide service agents that use other tools than the one we built to 0%

Goal 3: Reduce the amount of time until a case is solved until mid 2025 for the top 5 sold products

  • Our main focus: identifying and highlighting issues with the systems
  • Our measure of progress: decrease the amount of time a case is open by 75%
  • Initiatives: understanding, documenting, and communicating system behavior

Goal 4: Support all products until the end of 2025

  • Main focus, UI/UX to support multiple products for one customer
  • Our measure of progress: increase the percentage of products in the field supported by the new tool to 100%
  • Initiatives: enabling access to all products 

Conclusion

There you have it. That was our strategy. First, focusing on the problems of European agents. Then, creating something useful that works worldwide for a limited subset of products. After that, providing advanced support to our users. Finally, supporting all of the companies products. (We also had a longer list of additional potential strategic focus points for after that. Due to them being so far in the future we didn’t define them further.)

It isn’t overly complicated but so important. It gave our team purpose, helped us focus on the things that were most important, and finally improved collaboration with other departments. I hope this article – although I have been told it may come across as too academic – may help you achieve the same.