What Is Product Strategy Exactly? And Why It Matters
Product strategy is a creative act, to “do something new,” approaching an opportunity from a different angle. — Self Attributed
I sat daydreaming in the nondescript cafeteria of a Fortune 500 company, unprepared for what was about to hit me. The intoxicating aroma of fresh ground coffee filled the air. I was drifting in and out of thought, not paying attention to my coffee partner, when they broke my spell with a question.
“So what exactly is product strategy? Why is it important if I have a solid product management team?”
I snapped out of la la land. Questions were my business as a consultant. However, for some reason, I felt surprised and a bit offended by this particular one. Maybe it was the seemingly accusatory tone of the question. Yet, as it turned out, it was a turning point.
How I defined product strategy would define my professional career. It would make all the difference. A thousand thoughts raced through my head. Then the smell of coffee again wafted in my direction, and I started to drift, thinking about the answer.
“Hey, are you listening?” snipped my coffee partner.
“Uh, yes. How about I draw it up on a slide, and we discuss it tomorrow?” using my best-consulting delay tactic.
“I guess that would be okay, although not sure why you can’t just tell me.” My coffee partner wasn’t wrong. I should have an answer at the ready. With my brain whirring a hundred miles an hour, what would I do? Twenty-four hours wasn’t enough time.
As I thought long and hard about the answer back in the lobby of my hotel, I realized something important. If you look at most traditional product lifecycles, they start with market development and end with decline/end of life. The agile product life cycle started with ideation/discovery. Others start with innovation. Minimal discussion and representation of the role or need for product strategy existed.
I had a new crusade to take up. So, energized, I got to work.
Product strategy is the opening act
“The essence of strategy is choosing what not to do.” — Michael Porter
In a product-led organization, product strategy maps company strategy, goals, objectives, and desired outcomes down to a strategic plan for product teams. Therefore it should be the first step in the product lifecycle.
For a moment, imagine a play without an opening act, an opening scene, a venue, or props. Instead, the play goes from the Title to Act II with only voice and no visuals. That’s the equivalent of going right from your company’s goals and objectives into the product lifecycle without a strategy.
The product strategy is the opening act, the visuals, the backdrop, and the venue. Like a play lacking these essential elements, a product built without a strategy can feel sub-par and abrupt.
To build a successful product strategy, you must be willing to make tough choices that have a lasting impact and represent big moves. This requires open-mindedness, curiosity, creativity, and careful consideration of each option. That said, you must make a choice.
No choices = no product strategy.
The series of choices following a framework = the product strategy.
The End Game of Product Strategy
A product strategy synthesizes the choices made and packages them into a document. A document with one primary goal — creating clarity around the path forward. Clarity around the product vision, market opportunity, value to the user, how to win in the market, metrics, objectives, assumptions, dependencies, constraints, and how the product delivers results for the organization.
Clarity enables the team to translate the choices into a functional product that creates value. So as you make choices, package the strategy into a document, and share it with the product team, keep four words in mind — a clear path forward.
Product strategy vs. product management
Product strategy is a creative act to “do something new,” approaching an opportunity from a different angle. It includes the north star, the market opportunity, how the buyer and user will obtain value, how you will win in the market, key outcomes metrics, objectives, assumptions, dependencies, constraints, and how the product will deliver on the company's goals/objectives. It represents an activity skewed heavily toward ambiguity, creative thinking, research, and framing.
As a product strategist, you are writing the outline for the play, framing the opening act, setting the first scene, creating the props, and selecting the location. You are not directing and delivering the play to an audience.
On the flip side, product management is about creative execution. It’s about marshaling resources to deliver a functional product over multiple releases. Product management is the process of planning, developing, launching, and managing a product or service.
Product management includes the post-strategy lifecycle of a product, from ideation to development and go-to-market. As a product manager, you are the director and plan out the play, fitting it to the actor pool and rehearsing, all leading to opening night — your launch event. Once launched, you manage as it continues, through ebbs and flows, until the audience is tired, and its time to retire the screenplay.
And between product strategy and product management, the roadmap acts as a bridge, laying out a plan to execute the strategy in a way that rallies the team.
So what exactly is a product strategist?
Product strategists deliver translation and clarity through the product strategy and path forward. Product managers then leverage the strategy and map to set the roadmap to guide engineering. The same strategy is also used by marketing and sales to build their key messages. Product strategists guide the organization from strategy to execution.
In smaller organizations, responsibility for product strategy falls to product managers who pull double duty. However, as a company and its product grow, product strategy moves into a specialized role separate from product management. Regardless of size or maturity when the split occurs, the roles still must remain tightly aligned.
What are the core responsibilities of a product strategist?
Rather than a job spec, I prefer to focus on the key questions they answer. Questions that set the direction for the product and the team. Questions that create clarity and form the base of the strategy, map, and framework to execute. While I recognize that the questions can vary based on industry, company, the company’s strategy, and objectives there is a core set I find repeated:
- How do I map company strategy and objectives into a vision and strategic themes for our product teams?
- How do we reach the end state of the company strategy through our products?
- What problems will the product solve for the buyer/user?
- How can our products contribute to and deliver value to our company?
- How do we tell the story of the product and how it meets the strategic objectives of our company strategy?
- What targets should be set for each product?
- What needs to change with each of our products and its strategy?
- What’s going on in the market and with our competitors?
- How do the market dynamics impact the specific strategy and targets for each product?
- What’s the optimal go-to-market approach? Customers, value, pricing, distribution, etc.
- How do I drive focus and eliminate distractions, intentionally deciding what not to do?
- Where do we start?
Successful product strategists need to fall in love with the art of answering these questions (and many others) while also imagining a story that helps the team follow the right path forward. A good product strategist can clearly articulate answers to these and other questions in a way that motivates the team. A great product strategist tells them a story setting a clear path the succeed.
Using Google Maps as an analogy, the questions and their answers represent context about the destination. Where is it, how far away is it, what’s the destination, etc.? The path or A → B plan represents the step-by-step directions that show you how to get from where you are to your final destination and all the local hot spots along the way.
For more: Seven Characteristics That Make A Product Strategist Great
Key characteristics of a successful product strategist
A product strategist is a specialized role. In a large company, there may be many. In contrast, a small company’s product strategy comes from the C suite or the product leader. If and when you create a product strategy discipline, team, or single role, there are seven characteristics you must recruit for, including:
- Superb Story Teller. Stories bring teams together and provide a clear common purpose. To be an influential product strategist, you must share the why, how, what, who, and when in a way that will capture attention and lead to understanding.
- Motivator. A great story has no value in business if it doesn’t lead to action and change. While the story sells the path forward, a product strategist must be able to motivate the team to action.
- Expert Communicator. This rounds out the trifecta. To sell a story and motivate others, you must be an expert communicator.
- Loves Ambiguity. Product strategists live in a world of uncertainty and grey areas. They cannot expect clarity; it’s their job to create it. As a result, product strategists must love ambiguity, embrace it and turn amorphous into product art.
- Bridge Builder. While you can argue this is critical in any role, product strategists serve as the bridge between the company’s ambitions and product execution. They often also serve as a bridge between key leaders and product teams.
- Data Synthesizer. Data must support every part of the product strategy. No gut feels allowed. Data must funnel down from the company’s strategy and up from the product, marketing, sales, etc., to inform and guide the product strategy. A product strategist must synthesize it.
- Sky Diver. A big-picture thinker able to dive from the clouds to the ground. Company strategy and goals live at the 10,000 ft level, as many like to say. The product strategist needs to see the big picture and turn it into a precision map as they dive toward their specific coordinates.
For more: Seven Characteristics That Make A Product Strategist Great
Core Elements of Product Strategy
In my twenty years in various corporate, digital, and product strategy capacities, I have boiled product strategy down to eight core elements. These core elements, I find, when properly explored and written down, enable the development of a product that wins in the market. There is, of course, a lot more that can be said about each of these, given this is a brief overview.
- Vision and the north star — A clear, crisp statement providing a point, a coordinate, unwavering, and trustworthy. For more: How To Design A North Star
- The market opportunity — In which market will your product compete? Is the market big enough to be interesting?
- User-Centered Value Story — User value represents how the product will make the user’s life better reflected in a narrative that explains the value the user wants and how they get it from your product
- How to win — The deliberate choices you must make to win in the market and create revenue and sustainable profit.
- Objectives — Objectives in the form of OKRs (objectives and key results)
- Value Metrics — Value metrics come in two parts — value to the user (and buyer) and value to your organization
- Assumptions, Constraints, Dependencies
- How to deliver results to your organization — Given that the product strategy is the bridge to the company’s strategy, it’s essential to tie the two together
For more: Eight Core Elements Of A Winning Product Strategy
In conclusion
In our caffeinated exchanges in boardrooms or over coffee, the importance of not just having a product strategy but executing against one cannot be overstated. A product strategy is a distillation of choices — it’s clarity and commitment, a pledge to the future, setting a clear path forward. It bridges the company’s overarching vision with actionable, product-level plans, ensuring that the product contributes to the company's success.
The difference between product strategy and product management is also important to acknowledge. One outlines the grand vision, the broad strokes of the masterpiece, while the other breathes life into this vision, ensuring it reaches its users in the best form possible.
Ultimately, the role of a product strategist is to weave the fabric of this narrative, ensuring that it aligns with the company’s goals and resonates with the market, buyers, and users. They are the master storytellers, bridge builders, and synthesizers of data. They thrive in ambiguity, crafting a clear path through the dense fog.
So, as we sip our espresso and reflect on our products, let’s remember that product strategy isn’t just an initial step but a continuous compass, a guide ensuring we don’t just create products but craft experiences that matter.
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