The term “product strategy,” much like the entire role of product management, doesn’t have a standard definition. It means different things at different companies. Some companies don’t have a product strategy at all.
However, as product management functions continue to increase startups and companies, it’s increasingly important for leaders to develop an effective product strategy. Doing so requires product leaders to step away from their (many) day-to-day responsibilities to think about the big picture.
The product strategy shows you who your customers are and how your product fits into the current market. Moreover, it gives you a vision of how it will achieve business goals. The Strategy helps your team focus on what will have the most significant impact on your customers and the business.
This guide covers how to fit strategy development into your other planning activities. It includes the four critical components of an effective product strategy, and how to build your Strategy development interactions.
Product strategy converts your vision into a roadmap
Product managers take part in many strategic planning activities. Every company has different planning practices. I have noticed some commonalities amongst the good doing companies in the digital business segment. These companies have an audacious vision, a roadmap that defines what products and features to build to achieve that vision, and a product strategy that describes how product development fits into the business strategy and company vision.
(Vision + Strategy) + Customers+Macro+Competitors+Business) = Roadmap
The company vision is typically set by the Chief Executive Officer, potentially with help from a Chief Product Officer or other c-level executives. The vision describes the ultimate impact the company will have in the world.
In our episode, “Crafting a Vision is Product Management,” Blade Kotelly, Leader of the Advanced Concept Lab at Sonos, said that the vision should be at the bounds of what’s imaginable while still speaking to customer needs. “The best vision always speaks to enduring human needs,” he said. He elaborated, saying that if the vision is too fantastical, it’s not actionable. But if it’s too specific, there isn’t room to iterate based on customer feedback.
IKEA’s vision is to “create a better everyday life for the many people.” This vision is not specific to the product they offer today (furniture) and is not something that can be definitively defined as achieved shortly. It’s a north-star that inspires employees and customers.
The Head of the Product typically sets the product strategy. The product strategy describes how product management will help the company achieve the company vision and business goals.
Steven Haines, Author of the Product Manager’s Survival Guide and former Senior Director of Product Management at Oracle, he described how developing a product strategy fits into a product manager’s role:
“It is vital that people who are in product roles be able to look at what’s going on with the business, identify what that future state ought to be, and create a pathway to get there.”
The product strategy describes your target market and your method for achieving business goals. The process may entail building a single product, managing a portfolio of products to conquer a category, as Michel Feaster described in “Conquering a Category is Product Management,” or building a platform via an API, as Jeremy Glassenberg described in “Building APIs is Product Management.”
The product roadmap is typically set by the Head of Product, with input from product managers who are closer to customers and engineers. The product roadmap describes what products and features will be built to realize the Strategy and vision, who is responsible for developing those product features, and, sometimes, an estimate of when those products and features will be released.