Product Strategy Depends on Company Strategy

Expanding on a recent post (Revenue Goals are Not Company Strategies), I’ve been seeing lots of maker teams (product, engineering, design) struggling to form product strategies without a company strategy to hang them on. This is a recipe for failure: there are no generic product strategies or corporate strategies, and IMHO therefore no context-free prioritization models, metrics, or product goals. If these strategies don’t hang together, we each hang separately.

OK, What’s A Company Strategy?

There are lots of books/sources with deep dives into corporate strategy that I won’t duplicate here. See Porter or Collins or Doerr or your own favorite strategist. We can reduce them down to:

Clear choices for company-level growth/objectives that help each functional group make more granular, aligned strategic decisions. Do Sales, Marketing, Finance, HR, Engineering, and Product know/have what they need to support the plan? Did they have sufficient input?
Chosen from lots of plausible/reasonable/possible alternatives, which we agree we’re not pursuing. Did the C-Suite seriously consider other options before picking this one?
Short-enough time frame (e.g. 12 months) that choices are meaningful and actionable
Lends itself to OKRs or metrics
Not just an airy 5-year vision with all things for all people. (“We’ll dominate the market for X with industry-best profitability, winning products, highest NPS, 100%+ net renewals, and top employee satisfaction.”)

BTW, once-a-year CEO fiat or a surprise unveiling from the top-secret strategy committee doesn’t usually qualify. Strategy should be an all-year-round effort with lots of participation and (politely) heated arguments.

Why is this so critical to Product Management and the larger maker organization? Because we can’t generically prioritize work, validate potential improvements with all audiences, or assume that every customer segments will value benefits similarly. IMHO, sorting backlogs and setting roadmaps based only on multi-column spreadsheets or cost of delay or WSJF is fundamentally flawed. Product management malpractice. Specific markets and customer segments provide essential context that shapes the math.

Let’s expand my December scenario: A mid-tier enterprise software company wants to grow 25%+ next year. After a strategic brainstorming session, execs have floated a handful of exciting but unvetted ideas:

Major expansion into new Latin America and Oceania
10x better data insights for customers via LLMs and neural networks, which will generate AI buzz and lots of upsell revenue
Going up-market to even larger enterprises ($1B+)
Going down-market with a freemium offer for very small businesses (< 15 employees)
Heavy spending on TikTok campaigns to boost awareness with Gen Alpha
Dramatically reducing time-to-value (TTV) by packaging dozens of formerly-one-off application integrations into a connector kit
Outsourcing/offshoring most of Engineering to reduce costs and increase staff

A typical output from an unfacilitated one-time end-of-year exec strategy session. Any one of these might be a winning strategy, but there’s a ton of work to sort out which. And choosing 3 or more would be a fiasco.

From the product side, we’re stuck. Stymied. If we’re going down-market, usability and simplicity and self-onboarding and immediate gratification are top priority. If up-market, then customization and security certifications and F100 success stories and dozens of integrations are top priority. If into new International markets, then language/currency support and local legal restrictions and a support staff responding during local business hours might be top priority. Etc. We can’t build a sensible product strategy in a vacuum.
Said another way, product management will utterly fail without a well-articulated, financially sound, thoughtfully validated, agreed-up company strategy that we stick with for a few quarters. There are no generic product strategies.

Who’s Responsible for Corporate Strategy?

Some organizations have a formal Corporate Strategy Officer, and the incumbent may be brilliant at C-level strategy and at blending lots of fragmentary collaborative inputs with hard-nosed analytics. And a great tactician. And politically sensitive about gently sidelining previously rejected suggestions.
If you’re lucky enough to have this excellent person on staff, thank them profusely and offer whatever help they need. (Usage metrics? Product-level segmentation? Interview/validation summaries? Service revenue vs product revenue breakouts?) Be their champion, volunteer, office helpmate. Buy them drinks, make them feel appreciated.

But I rarely see the right person in the right position, empowered by the CEO, politically astute, experienced in multiple functions, and with enough gravitas to keep everyone playing along. I typically get empty stares when asking who has primary responsibility.

And most VP Product / CPO job descriptions don’t say “drive whole company’s strategic process.” Our scope typically doesn’t cover all of Sales, Marketing, Finance, HR, Bus Dev, and Engineering. We usually have the fewest employees of any C-level function. And “strategy” is something that everyone wants to be in charge of, but is often confused with “having a brainstorm on the way into the office.”

But without an overarching company strategy, everyone who works for Product is set up to fail. (Along with the rest of the company, eventually.) So it’s hard to recommend the arms-crossed, passive/aggressive, not-my-job approach of letting other functional leaders sort it out. Someone has to drive – officially or unofficially, within their formal scope or not.

So What Might We Do?

I think of this first as an organizational and company culture question, not first as a Porter-meets-slideware-meets-research exercise. IMO, most strategy processes ignore the fascinating personalities and mixed incentives around our exec tables. And ignore the tendency for each of us to focus on how a strategy impacts our own functional group.

So as a bravely foolish product leader, I try to step in and help things along – which is heavily dependent on the company/context. Some exec teams are collegial, intellectually welcoming, excited by deep-dive analysis and 80-slide strategy decks. Some are status-driven, hierarchical, and eager to take credit for each other's good ideas. Maybe yours is uninterested in strategy, ADHD, mostly focused on hiring enough high-quota sales champions to hit our revenue target. Think hard about what works in your setting: how to get peers to welcome a bit of help.

A few possibilities:

One-on-one coaching. Identify your 2-3 most important influential peers (CRO, CMO, CFO?), set up some one-on-one time well in advance of actual strategy meetings, and take them individually through your perception of the challenge. Bring a few dramatically different possible strategies, and talk through what each might mean for the company and their department. (“What do you think Marketing will need to drive leads in Latin America – with different languages, cultures, humor, partnering channels, and price points? If we instead adopt a Freemium model, then lead gen and adoption would mostly fall to Marketing. Do you want to get input from your team ahead of next month’s strategy offsite?”)
You’ve cleverly guessed which few strategies are most likely to come up for discussion, you’ve helped colleagues think through them a bit. They will be more prepared to argue the facts.
Push the right peer forward. Marketing leaders are often broad-based strategic thinkers: maybe your CMO is the right person to steer on this. Or to convince the CEO that we need a different approach. Here’s a chance to push from behind, offer support and insight, or preview/review approaches and materials. Tous pour un, un pour tous.
Run the numbers for the group. With help from Finance or a few very smart analysts, pull together a thumbnail business case for the top few ideas. (No, it's not officially your job.) If you can bring some count-the-digits SWAGs for a few scenarios ("this looks like a $100k/year idea rather than a $1M/year idea or a $100M/year idea"), you can move the discussion from philosophy to semi-quantitative FY24/FY25 results.
“I’m having trouble finding more than $200k-$600k/year in upsell for better insights, even if we have some AI sizzle to boost interest. But if we could cut our time-to-value by 20%, that’s $2M-$5M in reduced costs and would let us sign 20% more new customers.”
Facilitate the strategy sessions as a neutral party (if you can). Keep the best interests of the whole company in mind, not just Product. Even better, identify and introduce an experienced outside strategy facilitator to add structure and reduce ego issues.
Announce a product strategy first, then critique each corporate strategy. In some mass-consumer B2B markets, the product strategy can drive most of the company’s decisions. So Marketing and Support follow. (Sales is tiny at these companies.) It’s a high-risk approach for B2B/enterprise, though, where selling and marketing and partnering are as important as product features.
Ask the CEO to make you the official company strategist. A high-risk approach, especially if it’s your first time at this. Hic sunt dracones.

And so on. Note that we’re stepping out of the narrower Head of Product role because the company needs us to – not for our own ego gratification. We check our departmental agendas at the door. We think about everyone’s eventual success, not just a small group of Product Managers. The needs of the many...

Sound Byte

Product can’t build a thoughtful product strategy without an overall company strategy to hang it on. If that’s missing, someone has to step forward to improve the process. Approaches need to be appropriate to the organization and leadership, rather than about personal aggrandizement or short-term politics.