I’ve been reading and taking notes on strategy for the past year. What does it mean to be strategic? What does a good strategy look like?
I started this process because “strategy” was everywhere. Job postings, leveling frameworks, and feedback sessions—all honed around this squishy attribute.
I even found this search trend on Google, which I found interesting:
Searches for “product strategy example” peak every April and October, presumably when people are going through planning cycles.
Ultimately, I believe strategy is tricky for three primary reasons:
- Good strategy is often only apparent in hindsight. Facebook’s Marketplace or Amazon Prime seem obvious now, but they were risky bets at some point.
- Product strategy is often opaque. Few companies post their strategy docs online for everyone to see (GitLab is an excellent example of one that does!). Strategy, at its core, lends to being guarded and protected.
- It requires reps of trial and error. You’re (probably) not going to get it right the first time. With practice tough, you build a foundation you can fall back on.
With that context in mind, I wanted to share my permanent note about strategy. It distills many books and articles and captures my thoughts. I’ll keep it updated as I add more references.
What is a strategy for?
From Gibson Biddle, a good product strategy answers the question:
How will your product delight customers in hard-to-copy, margin-enhancing ways?
Ibrahim Bashir says that a good strategy is a yes/no machine. Feed it an idea, and it should tell you yes, no, or later. This piece is essential. Strategy is at least as much about what an organization does not do as it is about what it does.
Defining vs. discovering a strategy
I love this line from Pawel in Product Compass:
Strategy isn’t defined in a single workshop. It’s discovered through hypothesis, collecting data, and validating assumptions.
Many think of strategy as a long-standing document developed behind closed doors across many long days. More accurately, a strategy is a series of bets validated or disproved over time. As you experience success, these bets grow in size; your strategy becomes more audacious. From Jeff Bezos:
As a company grows, everything needs to scale, including the size of your failed experiments. If the size of your failures isn’t growing, you’re not going to be inventing at a size that can actually move the needle.
Many companies search endlessly for the correct planning cycle. My rules of thumb for strategic planning:
- Invest in the process sparingly. You’ll change it next year anyway (echoing Lenny Rachitsky).
- Do it whenever a need arises. From Good Strategy, Bad Strategy: “The need for true strategy work is episodic, not necessarily annual.“
Elements of a great strategy
From Good Strategy, Bad Strategy, a good strategy has a structure called the kernel, which includes a diagnosis, a guiding policy, and coherent action.
The diagnosis takes the complexity of the existing landscape and turns it into a simple story, calling attention to crucial aspects and allowing everyone to make sense of the situation. This is an undervalued skill of outstanding leadership—absorbing complexity and translating it into a more straightforward problem that can be solved. This is also where industry expertise becomes valuable. It gives you the context to understand what’s worth paying attention to and ignoring.
Next, the guiding policy defines a method of handling the diagnosis and drills down on one approach, ruling out many others. It’s decisive. Again, it involves saying no to another option. From Julie Zhuo:
Focus is a strategic advantage that lets you move faster on what matters most.
Finally, coherent actions bring the guiding policy to life. You could use a framework like OKRs to organize your coherent actions. The method is irrelevant provided the following are true:
- Actions are coordinated with one another, not competing.
- Actions build momentum over time.
- Directly responsible individuals (DRIs) have the autonomy and resources to accomplish an action.
- Like OKRs, completing the action implements the guiding policy (the whole thing is cohesive).
Diagnosing problems with your strategy
Strategy problems can break in one of several predictable ways:
- It’s not written in clear language that adequately defines the challenge ahead. Echoing Good Strategy, Bad Strategy, bad strategy uses “Sunday words”—big words that cloud meaning to sound intelligent.
- The org isn’t organized around the strategy. This can manifest in pursuing too many strategies or simply not aligning coherent actions amongst teams.
- It’s not sequenced correctly. Again, harkening back to our coherent actions, they must be sequenced to allow for momentum, not fits of starts and stops.
- It’s not affordable – both monetarily and/or psychologically. Monetarily, perhaps we don’t have the funds necessary to prove the hypothesis. Psychologically, if this involves a heavy pivot from our existing strategy, we may be unable to reorient the team effectively.
- Goals are misconstrued as strategy. Goals define our ideal outcome. Strategy is an analysis that takes the existing context, considers our strengths and weaknesses, and defines a path forward.
In a recent podcast, Brian Balfour of Reforge mentioned the power of product visuals:
I think most people would be better served just working in product visuals, saying, “Ooh, how might we want the product or the user to experience the product a year from now?”, and giving that to the team. That is way more meaningful…than a nicely formatted set of OKRs.
This is something I picked up from my time at Ness. Product visuals are powerful in aligning and inspiring teams where text often falls short.