Product management has evolved significantly since the widespread move away from Waterfall methodologies: Agile teams are working more collaboratively and iteratively, allowing for increased speed of delivery and adaptability. Yet many teams still struggle with a key part of product management: Product strategy.
Why does product strategy remain such a persistent challenge today? To find out, we talked with product management expert, author, and speaker Roman Pichler. Â
Drawn from over 15 years of experience in product management advising and teaching product leaders and owners how to improve their product strategy, Pichler shared insights on how to define and communicate an effective product strategy, avoid common mistakes, and secure strong stakeholder buy-in.
Letâs start with the basics. What is a product strategy and why do companies need one?
A product strategy is a high-level plan that helps product managers realize and share their vision, and states how they intend to achieve product success. A good product strategy explains:
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- Who the product is for, and why people would want to use and buy itÂ
- What the product is, and what makes it stand outÂ
- What the productâs business goals areÂ
In other words, an effective product strategy captures the market, the needs, the key features or differentiators, and the business goals.Â
Without a product strategy, it is difficult for companies to understand what value a product will create and if it should be created in the first placeâand once a product is launched, if it is delivering the desired value and how it should be progressed. To put it differently, a product strategy helps companies make smart investment decisions and to effectively manage their product portfolios.
Agile has given teams many techniques to improve product delivery, but it doesnât provide guidance on product strategy. Can you elaborate on this point?
An Agile framework like Scrum silently assumes that the Scrum teamâproduct owner, developers, and Scrum Masterâknow who their users and customers are, why these individuals will want to interact with and pay for the product, and why itâs worthwhile for the company to spend money on developing the product. Without this knowledge, it would be impossible to effectively stock the product backlog and write the right user stories.
Scrum, however, does not offer any guidance on how to determine the right target group and needs. It also does not offer any help on selecting the right business goals and ensuring that they are realistic. In other words, Scrum wants to help teams develop complex products, but itâs not a product management framework.
If Agile teams arenât aware that thereâs an area of work not covered by Scrum and neglect product discovery and strategy work, they tend to focus almost exclusively on execution and delivery. In the worst case, a team may end up doing a great job at building a product that people donât want and need or that doesnât generate enough value for the business.
What are the biggest mistakes youâve seen companies make with regards to product strategy?
There are six common product strategy mistakes I see companies make:
1. Â Â No product strategy. Without a product strategy, itâs unclear who the users and customers of a product are, what value it should create for them, what differentiates the product from competing offerings, and what benefits it should deliver to the business.Â
2.    The product strategy contains wrong information. This is often due to mixing up business strategy and product strategy. The former should state the approach chosen to make or keep the company successful. The latter should describe how you intend to make the product successful.
3. Â Â The product strategy has not been validated. An unvalidated product strategy contains assumptions that have not been tested and risks that have not been addressed. In the worst case, it is built on wishful thinking rather than data. As a consequence, the target group may be wrong, the value proposition may not be strong enough, or the business goal may be unrealistic.
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4. Â Â The product strategy is disconnected from tactical product decisions. In these situations, the strategy does not direct the product backlog, and the data gathered from developing product increments and releasing new product versions is not used to evolve the strategy.Â
5. Â Â The product strategy is not supported by the key stakeholders and development teams. A lack of stakeholder support renders the best strategy useless. A great way to secure strong buy-in is to invite the key stakeholders and development team members to create and update the plan.
6. Â Â Product strategy is not kept up-to-date. In these instances, a product strategy is seen as a fixed plan that needs to be executed. But as the product grows and evolves and markets change, the strategy must be adapted. To ensure that the strategy stays useful, review it once every three months, as a rule of thumb.Â
You mention stakeholder support as a critical part of product strategy. How can a product manager communicate their strategy to relevant stakeholders?
The best way to communicate a product strategy is to involve some of the individualsâthe key stakeholdersâin creating, validating, and updating the plan, preferably in the form of a collaborative workshop.Â
The key stakeholders are the individuals whose active support you need to offer the product. For a commercial product, this might include a marketer, sales rep, support rep, and finance expert. I find that this approach leverages the expertise of the individuals, creates clarity and alignment, and increases the chances of securing strong support.
