post

B2B product management

Artificial Intelligence (AI) & Machine Learning (ML)

Building Product Teams

Business Strategy

Data Driven Product Management

Digital Transformation

Diversity and Inclusion

Minimum Viable Product

OKRs

Prioritisation

Product Design

Product Research

Product Development Process

Product Ethics

Product Discovery

Product Leadership

Product Management Career

Product Strategy

Stakeholder Management

🌎 <a href="https://www.mindtheproduct.com/world-product-day/" style="color:#FFFFFF;text-decoration:underline;">Happy World Product Day!</a> Be sure to celebrate product, yourself, and your peers today! 🎉

Can product operations and innovation be friends?

Why can’t we get accessibility right? Claire Bauden (SVP Global Product Design, Global Payments Inc.)

Ditch the PRD template and embrace the PRD checklist

How to price your subscription product: insights and examples

International strategy with a 360 view by Chris Butler

Footer About

Footer Contribute

Footer Get Involved

Footer Links

Mind the Product

Sunday Rewind: The good, bad, and ugly of OKRs by Jenny Herald

Product Management

Lassi Liikkanen

<div>
<p>Product strategy is both a fascinating and fashionable subject among digital product leaders. It is an important topic to master for product managers as well as technology and design leads. However, it is not a simple thing to get started with as there is no one-size-fits-all template to prepare your first strategy perfectly.</p>
<p>In this article, you will learn about a process to get you productive with product strategy and to understand why starting is difficult.</p>
<p>This story offers the basic ingredients that will help you to get going.  You will understand how to account for the unique situation of your product and your organization in creating your special strategy mix.</p>
<h2>Life without a product strategy</h2>
</div>
<p>Anyone who has been involved in product work for a bit longer has noticed what the presence or absence strategy means. Life without a product strategy is possible as long as everything around the product stays small and changes slowly. When things scale up, the audience grows larger, the product evolves more complex, or serious competition emerges—it becomes hard to repeatedly make good, quick product decisions without a strategy. Product strategy is a tool that helps autonomously operating product teams and their leaders to make decisions that together move the company in the desired direction. It also helps avoid a reactive mode in which limited resources are thrown into whatever new opportunity or threat seems important this week, forgetting about the need for sustainable, long-term development.</p>
<p>Although a promising topic, product strategy is not simple to get into. The Web is full of well-written platitudes that circulate vague explanations of what product strategy is and how to apply it. Currently, there’s clearly more tacit knowledge in mature companies than explicit product strategy literature. This article is written to help those that feel curious or uncertain about product strategy to get the rudimentary bearings to get hands-on with product strategy work.</p>
<p>This story does not come from thin air. I am building on approaches that are practical and grounded in real-world experience, and that helped me to get a grip of product strategy myself during my product manager days. The opinions I have found credible and usable come from <span style="font-weight: bold;">Marty Cagan, Melissa Perri,  Gibson Biddle, Ben Foster, Justin Bauer,</span> and<span style="font-weight: bold;"> Rob Hayes</span>. While I warmly recommend learning each of their ideas first hand, I also found that the way these authors present their thoughts is not easy to fit in together. This is why I am presenting this unified guide that suggests a common language.</p>
<p style="text-align: center;"><a href="https://www.mindtheproduct.com/product-is-hard-by-marty-cagan/" target="_blank" rel="noopener">Watch this ProductTank talk by Marty Cagan: Product is Hard. </a></p>
<hr />
<p>The five-step model to generate a product strategy is illustrated below. The key lesson is that the product strategy as presented here is not a main course you can skip into, you need to check the requirements from the prior steps too. Before I describe the steps, I will provide some background in terms of how product strategy fits the bigger picture of other company management tools, who needs it most, and when.</p>
<p><span style="font-style: italic;">Figure 1: Five step model to creating a product strategy and benefiting from it </span></p>
<table>
<tbody>
<tr>
<td>Step</td>
<td>1: Check out if you already have these items</td>
<td>2: Create this first</td>
<td>3: Preparing the main stake</td>
<td>4: Finding focus</td>
<td>5: Putting it in practice</td>
</tr>
<tr>
<td>Building blocks</td>
<td>Company strategy: Vision, Mission, Objectives, Values…)</td>
<td>Product vision</td>
<td>Customer  insights, all internal insight,   competitor analysis</td>
<td>Strategic objectives</td>
<td>Team objectives and key results</td>
</tr>
</tbody>
</table>
<h2>We’ve got a roadmap, why do we need a product strategy?</h2>
<p>Product strategy is foremost a tool for product management. Product management always happens, whether you have a strategy or not: decisions are made and future plans communicated. Conventional management models for the <span style="text-decoration: underline;"><a href="https://www.sciencedirect.com/science/article/pii/S0040162519305062" target="_blank" rel="noopener">past 30 years of software engineering</a></span> have strongly relied on <span style="font-weight: bold;">product roadmaps</span>.</p>
<p>Roadmaps have been lucrative as they offer a simple solution for predicting the future. This helps not only the product team but especially other stakeholders: sales, marketing, customer support, and finance who can plan their own actions based on the expected availability of new products and features.</p>
<p>The problem with software product roadmaps is that they don’t fit well with modern Agile software development process. This has been shown time and time again. The core reason is that it is impossible to predict the future for a long stretch into tomorrow. What will be built and when just cannot be determined a year in advance.</p>
<p style="text-align: center;">Listen to this podcast on <a href="https://www.mindtheproduct.com/podcast-roadmaps-okrs-vision-prioritisation-with-bruce-mccarthy/" target="_blank" rel="noopener">Roadmaps, OKRs, Vision and Prioritisation with Bruce McCarthy</a>.</p>
<p>This is especially true for fast-moving, consumer-facing parts of the product. There is too much uncertainty and too many environmental variables at play. That is why Agile organizations and autonomous teams, turn into more flexible and dynamic management solutions such as product strategy.</p>
<p>The intention is not to say that roadmaps are useless, as they do serve an important communication function and may play a part in communicating a strategy. They are just insufficient for fast-moving teams with any autonomy. At best roadmaps can help to approximate the likelihood of being able to complete on specific initiatives in a given timeframe with the known resources. For instance, is there capacity to run long-term development projects such as switching to a different content management system? But that’s not enough.</p>
<h2>Who can best take advantage of product strategy?</h2>
<p>All people whose opinion counts in product decisions should understand the basics of product strategy. This includes developers, designers, and managers. The ideal context is an Agile organization and preferably that of <span style="text-decoration: underline;"><a href="https://svpg.com/empowered-product-teams/" target="_blank" rel="noopener">“empowered” teams</a></span> as advocated by Marty Cagan. The important difference to other management models is that strategy favours high-level clarity over detailed specification, focusing on “why” and a bit of “what” instead of “what exactly” and “how.” The latter parts should be left for the teams to work out the best way they can.</p>
<p>Who should participate in the product strategy process? As we will learn in step three, product strategy requires a comprehensive understanding of the product (design, technology), customer (customer support), and the business around it (sales, marketing). This means we need representatives of several functions to participate in the strategy work.</p>
<h2>When does a company need a product strategy?</h2>
<p>You might question if a company needs a separate product strategy from its company (business, corporate) strategy. The answer is that not necessarily. If your company is small and only has a single product, has a solid business strategy, or doesn’t yet have a product-market fit (fixed value proposition), then there probably is no need for a product strategy.</p>
<p>On the other hand, large companies that have totally distinct products will have unique product strategies for each of their independent products. To leverage corporate synergies, there may be some commonalities, but as independent businesses, they need novel guidance.</p>
<p>The organization size matters on the role product strategy play. For instance, in the book Empowered Cagan describes a medium-sized company (10-20 teams) which already has a business strategy and annual company objectives. These objectives are input for the product strategy, but in a smaller or different company, they could be just a part of the company strategy.</p>
<h2>Prelude: Why may product strategy feel difficult to get into?</h2>
<p>Product strategy is a plan to make the product vision happen, says <span style="text-decoration: underline;"><a href="https://svpg.com/product-strategy-overview/" target="_blank" rel="noopener">Marty Cagan</a></span> in his book Empowered. I like this definition because it is very simple, even if calling strategy a plan is oversimplifying. Also there is no “unified definition” of product strategy within the context of digital product development. If you explore different suggestions, you will realize that <span style="font-weight: bold;">product strategy seems to mean different things for different people</span>, although all formulations may seem convincing in their own sense.  Why is that?</p>
<p>It is because the <span style="font-weight: bold;">details of product strategy depend on the specific organizational context</span> in which it is being used. Not only the content of the product strategy changes from place to place, but the whole structure changes too! This happens naturally because there are so many different types of companies and product organizations out there. Keep this in mind when you analyze examples of strategy.</p>
<p>With this insight, you are ready for a walk through the five steps of getting engaged with product strategy which will be presented in the <a href="https://www.mindtheproduct.com/product-strategy-for-beginners-part-2/" target="_blank" rel="noopener">second part of this article</a>.</p>
<p><em>I would like to acknowledge the help of <a href="https://www.linkedin.com/in/lasselumiaho/?originalSubdomain=fi" target="_blank" rel="noopener">Lasse Lumiaho, </a>Product Manager, Vaisala, for commenting on the article draft.</em></p>
<h2>Read Part 2</h2>
<p>Read <a href="https://www.mindtheproduct.com/product-strategy-for-beginners-part-2/" target="_blank" rel="noopener">Product strategy for beginners: Part 2. </a><a href="https://www.mindtheproduct.com/category/product-strategy/" target="_blank" rel="noopener">Discover more content on Product Strategy. </a></p>
<h2></h2>
<div></div>
<div class="g g-21"><div class="g-single a-170"><a class="gofollow" data-track="MTcwLDIxLDEsNjA=" href="https://www.pendo.io/pendomonium/"><img decoding="async" src="https://www.mindtheproduct.com/wp-content/uploads/2024/06/MTP-Footer_ad.png" /></a></div></div>

Product strategy for beginners: Part 1

Lassi Liikkanen

Comments

Read next