Section I— What is Product Strategic Thinking?
Product teams' skillset is like a puzzle, composed of many vital skills that complement each other.
One of the fundamental pieces, especially as we grow in seniority and climb the career ladder, is thinking strategically. But what exactly does that mean?
I feel this is still too vague, and we can customize it further for product development purposes, as 4 particular abilities:
- Synthesis and communication
Let’s review each of them:
1. The ability to diagnose your situation: We are usually good at understanding our product's metrics and measuring how we improve the numbers with each release. But diagnosis requires looking at the bigger picture. How is the overall company doing? What inputs are we getting from customers either as research or through satisfaction surveys? How is the overall industry doing, and what tendencies should we keep an eye on? Having this broad perspective is critical to creating well-founded strategic plans.
2. The ability to understand the critical challenges and opportunities that your company/team can act upon to generate a difference: Being good at diagnosis is not enough. Good strategic thinkers translate findings into insights, the best opportunities we can leverage to improve our results drastically.
3. The ability to create a mid or long-term high-level plan to realistically address those challenges and opportunities: Good insights are not enough either. Hopefully, we identified many options. But true strategy is about selecting and focusing on the very few that transform our value proposition and create strategic advantages. Furthermore, we need to understand the order in which we must pursue these opportunities and develop our strengths over time. Tesla’s master plan is a good example of how to correctly sequence milestones to achieve your vision:
The master plan is:
1. Build sports car
2. Use that money to build an affordable car
3. Use that money to build an even more affordable car
4. While doing above, also provide zero emission electric power generation options
Don’t tell anyone.
4. The ability to sum up all your thinking and reflections in a single and memorable artifact: You guessed it, selecting the right insights is not enough either. An unknown strategy is as bad as a non-existing one. The final skill is about crafting a memorable message, inspire the organization with your storytelling, and sum it up in a single diagram that can be presented over and over again to keep it fresh. All this effort pays off when the entire organization starts making execution decisions aligned to your plans and goals.
Who does it, and why is it important?
Undoubtedly all product leaders should be developing and applying these skills. But I would argue that also all Product Managers should be using this sort of thinking. In fact, when thinking about goals or roadmaps, without strategic thinking, you are simply pursuing the latest shiny object.
Applying this mindset would focus product people at any level on solving the right problems. No matter how small your product scope is in a large organization, you should start applying strategic thinking to your plans, and that practice is the first step to develop it.
Section II — How to develop it
I want to call out that this is not some sort of black art that only a few can perform, nor it requires proprietary training and frameworks from big consulting firms.
As said, practice is the best tool, but I would describe 3 actions you can start applying tomorrow:
- Deepen context analyses.
- Use new tools and frameworks to expand your thinking.
- Read analysis or strategies of other companies.
Let’s review each of them:
- Expand your knowledge about your context: as said in the first strategic thinking skill, diagnosis, we are usually good with some inputs like strategic metrics, but we often fail to consider the broader context.
The following table, part of the Product Direction book’s free section, describe 9 inputs to product strategy that we must fully comprehend:
By considering more inputs, we improve our diagnosis and expand our horizons, letting us develop better insights.
2. Tools, frameworks, and practices to capture and select better insights: now comes the good part. Even when you fully understand the context, you may still lack the insights or the ability to craft a winning plan. Thankfully, lots of tools have been created to expand our perspective and find the right opportunities. Once you practice with them enough, you will incorporate them as part of your natural way of exploring options.
The articles below explore around 12 tools you can leverage for strategic thinking:
- Rocking at Product Strategy: 3 steps and 10 tools to succeed where most companies fail
- A Framework for Strategic Insights
3. Read other’s resulting strategy: to be clear, in this case, I’m not talking about reading strategy theory like Mintzberg’s or Porter’s work (which I also recommend). Now, I’m referring to the work of other companies or industry analysts talking about moves and strategies for their companies or a sector of the economy. Dissecting their reasoning and decisions is an excellent way to borrow knowledge from other strategists' practice and complement and contrast your own practice.
The following article contains 10 resources, including 3 newsletters of known tech industry analysts.
Part III — How to evaluate it
Let’s close with the fun part. How can you evaluate if you are improving your skills? How can you evaluate others in interviews or for career advancement?
Once more, we will divide it into three aspects:
- Strategy definition process
- Resulting perceived quality
- Feedback loops
Let’s review each of them:
- The definition process: while formulating strategy is not a rigid nor dogmatic activity, there are two critical “steps” to consider:
- Ensure there was a diagnosis of the situation, and the plan doesn’t merely follow the latest idea or first shiny data point.
- Ensure there were insights and selection, asking how you (or the interviewee) decide on those problems/opportunities.
2. The resulting strategy's perceived quality: there is no standardized way of formulating strategies, and similarly, there is no way to grade them. Luckily, some authors gave us a few considerations to evaluate the quality we can perceive on the strategy's resulting formulation.
a. Richard Rumelt: in his great book Good Strategy / Bad Strategy, he proposed 4 attributes that characterize well-crafted strategies: Consistency, Consonance, Feasibility, and Advantage. I use an 18-questions template to evaluate different aspects of the 4 dimensions. You can apply it to your definitions or use it to evaluate other’s work.
b. Value proposition and business model questions: in Strategzyer books, they provide 10 questions to evaluate your value proposition and 7 for your business model. For example: “Does your value proposition differentiate from competition in a meaningful way?”
While they seem tool-specific, in reality, those can be used to evaluate your resulting strategy. Both questionnaires can be found on Strategyzer’s site.
3. Feedback loops: finally, your strategy would be based on assumptions and hypotheses. We would have waited 12 to 18 months in an old waterfall world to see the results of your decisions. Today we know better, and we should start experimenting quickly on our riskiest assumptions and pivot if required. Note that experimenting and changing direction is by no means a strategic thinking failure. On the contrary, failing to experiment and realizing of wanted efforts later would be the failure. Similarly, failed experiments will give you great learnings that you can use to improve your future strategic decisions.
This content was adapted from Product Direction, my upcoming book, describing at length, with examples and templates, the process to successfully create and link Product Strategy, Roadmaps, and OKRs.
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