Setting Strategy

The product context defines a strategy that offers a high level plan of how to combine technology and design to solve real customer problems in a way that meets the needs of the business.

Capture Outlook

By this point, the Leadership team should have emerged, often as a triad of a product manager, design lead, and engineering lead that share the responsibilities and decision authority for the product. The extended leadership team will include various stakeholders, but the accountability for strategic decisions falls on the product leadership team, or triad.

The product leader receives a Budget from the business, sometimes during annual planning, to drive its responsibilities to both maintain and change the product. This is the budget that is deemed sufficient to enable the product to support the related business capabilities, given where it is in its product lifecycle. For example, a new product building an MVP needs less budget than a growing product winning in its market. And a product reaching the “sunset” of its lifecycle will receive less budget from the business than it did in its “high growth” stage.

The product leader begins the process of strategy development by working with their stakeholders to capture Beliefs about applicable personas, customer needs, technologies, and trends. Then they capture beliefs about the current state of the product, using the KPIs, to assess the needs for change.

Belief Challenging

Belief challenging is a tool for challenging existing, often implicit, beliefs and arrive at better pivot/persevere decisions when evaluating existing product investments (projects, features, etc…)

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Product leaders should also capture their current positions on classic Tradeoffs. While tradeoffs are product-specific, some general examples for technology products include:

• Time-to-market vs. Product Quality (i.e. technical debt)
• Feature completeness vs. Simplicity
• Cost vs. Innovation
• User Feedback vs. Visionary Direction
• Platform Scalability vs. Cost/Time
• Security vs. Usability
• Customization vs. Standardization

"Even Over" Statements

Leaders delegate decision making by creating boundaries of authority. Decision rights enables the speed and effectiveness of decentralized decision making.

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Imagine Future(s)

Product leaders seek to understand customers’ needs even better than their customers do. Product leaders take their active beliefs (and positions on trade-offs) and imagine some possible future Scenarios of an evolving product/market fit that establishes a strong business capability, that is, one that helps the business “win” where they choose to “play”.

Ask: “What is known?” (and “What is unknown?”) with respect to their beliefs and these possible futures. Establish a set of mutually exclusive scenarios that outline different futures (and different directions for the product).

Use Prompts from industry experts and thought leaders to spark the exploration of scenarios.

For example, here is a prompt taken from “Strategize” by Roman Pichler:

• What innovation strategy will fuel the product vision? (core, adjacent, disruptive)
• Where in the product life cycle does your product currently stand?
• How can the product life cycle drive your product strategy for the next year?
• What business model will complement your product strategy? (e.g. subscription, freemium, advertising, bait and hook)
• What problem does the product solve, or what pain or discomfort does it remove?
• What is the main value or main benefit your product provides?
• How does your product stand out from the competition?
• How will you remove barriers in the overall customer experience?

Or this prompt taken from Marty Cagan’s “Inspired”:

• What is the future we are trying to create?
• What are some meaningful and relevant trends that should influence our vision?
• Do our customers have a problem-worth-solving (that we love thinking about)?
• Do others think this is a worthwhile pursuit?
• What will inspire others to want to make this vision a reality?

Collect open Questions like this to explore the amount of uncertainty across the product leadership team and stakeholders. Then solicit answers and refine the distinct scenarios into specific Possibilities, that point to possible futures. Finally, drive a dialog through the possibilities by asking, “What would it take for this Possibility to be true?” and assessing the likelihood of these enabling conditions.

Nominal Group Collaboration

Nominal group collaboration is a method of group decision making that involves structured, anonymous input from all members to generate a representative group viewpoint.

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With the possibilities evaluated for each scenario, choose one and use it to update the product Vision. If there is debate over which future is preferred, drive a deliberative Decision to weigh the choices with a set of stakeholders.

Lastly, once a preferred scenario is selected as the vision, the extended team can articulate the Risks of this preferred, ideal future, to drive discovery efforts. For example, the product leaders can look at the customer problems articulated in the vision and consider (for either extensions to an existing product, or a new product):

• Value Risk: Will the customer buy this, or choose to use it?
• Feasibility Risk: Can we build it?
• Usability Risk: Can the user figure out how to use it?
• Business Viability Risk: Does this solution work for our business?

Set Direction

With a vision of the preferred, ideal future in hand, product leaders can document the active set of Assumptions about their customers, about the product’s value proposition and product/market fit that they will carry (or are currently carrying) into the strategy definition that follows. These assumptions should make the leaders’ probabilistic views or predictions (around the uncertainty that surfaced during the dialogs to craft the vision) transparent, to spark dialog.

Next, translate the vision into concrete objectives or Goals to pursue over the next year or so. Review the KPIs that measure the product’s performance against the context’s capabilities and aim to move the needle with Desired Results. Simplify the message by finding a North Star metric, or One-Metric-That-Matters, to help focus the strategic decision making. Emphasize the use of leading indicators that can support experimentation.

With clear goals in hand, the next challenge is to strike the right balance between discovery and delivery. Review the assumptions and identify areas where discovery efforts can validate a path to the goals. Check the performance goals and identify areas where delivery can be improved. Review the current state of the user experience and identify areas where design and development can change user perceptions enough to impact the goals. These areas are called Levers (as in “levers to pull”) and this exercise seeks to explore the levers as broad opportunities, seeking leverage.

Levers should refine the “where-to-play” and “how-to-win” choices from the parent context, to clarify them for the target market of the product, in terms of personas, key use cases, and market/user segments. For product leaders, the levers could reference solving for different high-level customer pain points within the problem space, for example. Levers are then mapped with the goals, to propose how pulling the levers can yield results that, in turn, might achieve the goals. These causal relationships are loaded with uncertainty, so the purpose here is to create transparency in the logic, and drive clear dialog across the extended leadership team.

Visual representations of these causal relationships can be created with tools like the Causal Decision Diagram, Opportunity Trees, or Outcome Trees. The intent is to streamline the dialog to make choices on the best path(s) to prioritize for ideation (for delivery) and experimentation (for discovery).

Causal Decision Diagrams (CDD)

Causal Decision Diagrams help decision-makers visually capture the causal relationships between desired goals, the different choices of levers to pull, and any intermediate results that connect them.

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Outcome Tree

Leaders delegate decision making by creating boundaries of authority. Decision rights enables the speed and effectiveness of decentralized decision making.

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As a product leader, levers can represent problems-worth-solving to support the product/market fit. When multiple, viable paths surface (i.e. levers that chase the same goal that cannot all be pursued this year), product leaders can facilitate nominal collaborative groups to make Decisions.

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