Virtually every B2B software company has a product management function. Product managers typically act as the voice of the customer: they generate roadmaps, prioritize features, and align teams. And somewhere among this list of duties falls creating a product strategy.
In its simplest form, a product strategy identifies solutions to the product’s three penultimate challenges. A well crafted strategy is a product manager’s best friend: if it’s done right, it makes every other aspect of a product manager’s job easier. And without a strategy a PM’s job is not only harder, but the odds of success are much longer.
Since almost all of a software company’s revenue comes from selling products and services, you would think that a product strategy would be carefully crafted, closely scrutinized by the executive team, and aligned to the overarching corporate strategy. But product strategies are seldom developed this way. The deeper I get into my career, the more obvious it becomes that product managers often mistake many things as business strategy. They spend months or years spinning their wheels and making little progress towards their goals, all the while thinking that they’re working strategically.
Don’t waste your time with a strategy that’s not a strategy. Here are four common examples of what product managers often mistake as strategies but instead represent ineffective decision-making:
“Vague Management Gobbledygook” Strategies
Let’s cut right to the chase with an obvious example of shudder-worthy management gobbledygook strategy:
Our strategy is to be the partner of choice for our customers by offering solutions that address their most critical needs.
I don’t mean to call anyone out if this is your current strategy. But I do want to encourage you to evaluate what this statement means. Is your strategy really just to sell your product to customers? That’s not a strategy, that’s a plan to stay in business.
Close cousins this kind of management gobbledygook include Rah! Rah! managers full of mythical Vince Lombardi quotes and organizations that are fond of saying that “Having a backup plan means you’re planning to fail.” This kind of management gobbledygook is simply too vague to be a real strategy. What does that strategy tell you about the customer? What does that strategy tell you about how they differentiate themselves from their competitors? Beware such strategies and managers; they lead good people to bad outcomes.
“Financial Plan” Strategies
I once met with the CFO of a company that generates about $400 Million in annual revenue. When I asked him to describe his firm’s strategy, he slid their three-year forecast across the table and said, “Here’s our strategy. This is what we have to achieve.”
Unfortunately, financial forecasts make for very poor business strategies. By their very nature, forecasts reduce millions of interactions and decisions to a single number. This is like saying, “We want to win our next football game by the score of 40-7,” and calling it a strategy. At best, it is an educated prediction.
Real strategies tell you what action to take and where your priorities lie, and they have real obstacles with real outcomes. Identifying and agreeing on these obstacles is hard work, but doing so allows you to formulate a plan, allocate resources, and address each obstacle with a realistic, measurable outcome.
“Masquerading” Strategies
“Masquerading” strategies, also known as “After the Offsite Retreat Strategies” typically pop up among the 10 or 20 goals that a management team can brainstorm during leadership meetings. These so-called strategies are usually insightful pearls such as “Growth,” “Achieve best-in-class operational processes,” and “Become the customer’s partner of choice.”
You have to squint to see these kinds of strategies because they are hiding all over the place; they masquerade as a business’s vision or mission statement, long-term goals, or company values, and they provide no insight into how to make decisions.
“Expansion” Strategies
Companies that hire truly talented people end up with a lot of competitive peers jockeying for resources and control. That’s good for the organization because the team will generate a lot of good investment ideas; each business unit’s expansion plan is sound, so are all their product extensions, and so is that IT revitalization project that needs to be done.
Yeah, right.
“Every investment is a priority,” cannot be your strategy because there is only enough capital and time to undertake a few initiatives. Leadership needs to be able to tell high-performing senior executives “Not now,” or “No” without the fear of blowing up internal conflicts between competing projects.
“Empty” Strategies
Strategies must stand for something — anything — or they simply are not strategies. To have depth, meaning, and viability, a strategy must have a complete and utter opposite strategy. In this case, an “empty” strategy is one that doesn’t have an opposite strategy. You must ask yourself whether or not the negative of your strategy holds true… and if there is no negative, you can be sure that you don’t have a strategy at all.
For example, many companies pretend that an empty phrase like “Our product is customer centric,” is a strategy. But there’s no opposite to this strategy because being customer centric is a simple business principle. On the other hand, “We will sell our product through indirect channels,” does have an opposite: direct to customers. Therefore, it passes the test as a real strategy that a business can work through.
Crafting a good product strategy is as important as prioritizing features or meeting with customers. You can’t write off your product’s strategy as something as simple as made-up, vague, or ineffective language and hope to be successful. Instead, evaluate your strategy according to these four non-strategies and see how you can improve your strategy to improve your bottom line.