The Product Strategy Cycle
Despite its importance, product strategy is not always effectively practiced. One of the key issues I encounter in my work is that strategy and execution are not aligned but rather disjointed. To address this issue, I have developed an iterative process called the product strategy cycle. The cycle systematically connects strategy and execution so that the former guides the latter and insights gained from the tactical work help evolve the product strategy. In this article, I explain how you can use the cycle to join up product strategy, product roadmap, KPIs, product backlog, and development work, and I discuss the role stakeholders and development team members play in making effective strategic product decisions.
You can listen to the audio version of the aricle here: https://www.romanpichler.com/romans-podcasts/the-product-strategy-cycle/
Enter the Cycle
Traditionally, strategy and execution are often viewed as separate, sequential pieces of work that are carried out by different people. For example, a product manager might determine the product strategy and one or more development teams might be tasked with executing it. But as long as innovation, change, and risk are present, this approach is ineffective. Instead, strategy and execution have to be closely connected: The former should not only guide execution, but execution should inform strategy changes and help adapt the strategy.
Based on this insight, I have come up with the product strategy cycle shown in the picture below. It’s a model of an iterative process that systematically links the product strategy with the product roadmap, the product backlog, the development work, and the key performance indicators (KPIs).
In the picture above, the process starts at the top of the cycle by creating a new strategy, either for a brand-new product or an existing one. In the latter case, a new strategy might be required to extend the product’s life cycle, for example, by addressing a new market or market segment. An effective product strategy should capture the product’s target group, value proposition, standout features, and business goals.
Before you proceed further, you should validate your new strategy and address key risks and assumptions in order to maximise the chances of achieving product success. For example, the market segment you have chosen might be too big and heterogenous, the value proposition might not be compelling enough, or the business goals might not be feasible. Identifying and addressing the key risks in the product strategy is best done iteratively, as I explain in more detail in my book Strategize. I have therefore placed a small cycle next to “Product Strategy” in the picture above.
Once you’ve addressed the key risks and you are confident that you have chosen the right needs, market, standout features, and business goals, you can take the next step and derive a product roadmap from the strategy. I view the roadmap as a product plan that describes how you intend to implement the strategy and which specific benefits or outcomes the product should provide over the next, say, 12 months, based on the needs and business goals stated in the product strategy. I call these outcomes product goals. Sample product goals are acquiring new users, increasing engagement, removing technical debt to future-proof the product, and generating revenue.
With an actionable product roadmap in place, move on and stock your product backlog. To do so, choose the next product goal stated on the product roadmap, determine the features and functionality required to meet it, and capture them in the backlog. Then create just enough ready product backlog items to be able to start the upcoming sprint and develop the actual product. As an iterative process is usually best suited to create a new product or a major product update, I’ve added another little cycle between “Product Backlog” and “Product” on the picture above.
After development has started, measure the development progress, for instance, by using a release burndown chart. When an initial or new version of the product has been released, use the KPIs to measure the product performance. These should include the metrics required to determine if the product goal chosen has been met and additional indicators that help you assess how your product is doing and if the strategy is working. Examples of the latter are engagement, retention, product quality, team motivation, and in the case of a revenue-generating product, revenue and cost.
Use the KPIs and the development progress data to review the product strategy and the product roadmap, and change them as appropriate. This might involve making smaller, incremental adjustments. But it might also require you to pivot, to significantly change the strategy in order to make the product successful. Take YouTube as a well-known example. The product pivoted from a dating website to a video-sharing platform.
You have now completed the cycle and started another one.
Read On …
To read the rest of this article and access the remaining tips, please head over to my website: https://www.romanpichler.com/blog/the-product-strategy-cycle/
Learn More
You can learn more about product strategy by attending my product strategy and roadmap training course and reading my book Strategize.
Source: https://www.romanpichler.com/blog/the-product-strategy-cycle/
