Strategy: The Art of the Product Manager

Most of my life I’ve been a fan of strategy games – Risk®, Age of Empires, even Checkers. These games all demand that the player has a solid strategy, or they will likely be defeated by their opponent. Anyone playing without a strategy is just executing random actions based on feeling or intuition (or luck), without a plan, and more often than not, won’t even see their defeat coming. In my experience, the words “strategy” and “tactics” always lead to a great conversation. In one of my previous places of employment, there was so much pressure to be “strategic” that the words strategy and strategic became overused and meaningless – everything was presented as a strategy because that was the perceived path to promotion. Telling someone that their “strategy” was actually tactical execution would lead to heated debates. I have seen people ask for strategy documents and then criticize them for their lack of specifics (which was code for ‘where are the tactics?’).

Strategy

The word “strategy” is derived from the Greek word strategos, meaning the “art of the general.” Simply put, a strategy is a plan to enable you to achieve a desired result. For a military general this is their plan for how they will deploy troops and resources. Conversely, tactics are the specific actions that will be executed to achieve the plan, such as flanking a building in our example.

In a previous post I explains how a Vision sets the overall direction; it is the compass for an organization (or even an individual). With a defined vision you can define the strategies that will enable the vision to become reality. Only once you have defined one or more strategies can you define the tactics that will be used to achieve the strategy (thereby achieving the vision). Take for example a person with high cholesterol who has a vision of being healthy. Their doctor may recommend several strategies for them to bring their cholesterol down and help them achieve their vision of health. One strategy might be to manage weight and/or drive weight loss. Another strategy might be to create a more healthy lifestyle (Note: these are simplified for the purpose of discussion). Each strategy will be achieved by executing a set of tactics, such as engaging in 30-minutes of cardio exercise 3-days a week by running or swimming, or by reducing the amount of animal fat intake, by having vegetarian meals a couple days a week.

Strategy v. Tactics

The difference between strategy and tactics is the difference between a plan and an action. A strategy is the plan–an adaptable plan–for how you will achieve a goal, and the tactics are the executable actions you will perform to achieve the result outlined by the strategy. In military usage, a distinction is made between strategy and tactics. Strategy is the utilization, during both peace and war, of all of a nation’s forces through large-scale, long-range planning and development, to ensure security or victory. Tactics deals with the use and deployment of troops in actual combat (Dictionary.com Unabridged. Based on the Random House Dictionary).

Strategy and Tactics are the plan and the actions.

Creating a Strategy

Creating a strategy, whether for a business, product or person, begins with the Vision; how can you create a plan without a vision of what you want to be when the plan is achieved? Assuming you have a good, concise and specific vision, then defining the strategy or strategies you will use is an exercise in planning. Start by identifying what has to happen in order to make the vision a reality. In the example of the person with high cholesterol who has a vision of being healthy, what has to change is their cholesterol level.

To identify the strategies available you begin identifying concepts that could change the “system” – where the system is the business, product or person. In our example case, the system is the person – what concepts could change this system from its current unhealthy state to a healthy state by lowering their cholesterol? In this case, a lot is known about how to lower cholesterol, so the strategies become apparent quickly:

Manage weight and/or drive weight loss.
Improve lifestyle health (e.g. eating, habits, etc.).
Introduce cholesterol management medication.

With one or more strategies identified you can begin to evaluate them and decide which ones you want to employ. Our example patient may not want to introduce medication at this time, and will commit to the first two strategies. The strategies offer measurement milestones to determine their effectiveness, such as annual physical examination. The measurement milestone is designed to identify if the strategy is working, or if a new strategy is needed.

Measurement is Key

One of the most critical elements to a strategy is the ability to measure its effectiveness. You don’t want to continue burning resources executing against a strategy that isn’t working. With each strategy you identify you must identify a means to measure its success. For example, when we were preparing the initial beta release of Icenium we wanted to attract net-new customers to the company. One of the strategies we developed was to drive awareness through trade press that targeted audience profiles that were different than the current customer profile at the company. We developed a couple of measuring sticks.

When we created the beta release plan we decided that we would allow new users into the system through an invitation code (so we could control the inflow), and to aide the strategy we negotiated an exclusive announcement of the beta (with a couple thousand beta codes to giveaway) with TechCrunch, a publication that targeted the type of user we were interested in. This tactic was designed to support the higher level strategy of driving awareness to new user profiles. Within our system we created a reporting mechanism that would tell us the number of people responding to the invitation who were using email addresses already in our customer database. While not foolproof (because people have multiple email addresses), this did give us a good indication about the number of net-new customers we were bringing into the system, and since they were tied to their invitation code, we could tell where they came from. As we added more press outlets, and gave out more invitation codes, we could tell if our strategy was working or not by evaluating the percentage of net-new users coming from specific trade press.

In some cases your measurement may not be as easily instrumented. In another example from Icenium, our vision was to be a one-stop-shop for building cross-platform mobile applications and one of our business objectives was, as I said, to grow the company’s user base. To support both the vision and the business objective, we defined a strategy to attract web developers with an all-in-one tool and service stack. Our strategy was to build a development tool that was approachable and intuitive for web developers. We focused our execution (tactics) on building a light-weight code editor that worked similarly to other code editors, and that eliminated the need to manage platform complexities by abstracting them to the cloud. We replicated the web developer’s normal workflow of code-and-refresh by pairing the code editor with a device simulator. This enabled them to work in the same way they had been working with the browser, but with a focus on mobile applications. We built our app model on open source software that supported technologies they were already familiar with (HTML & JavaScript).

In other words, we defined strategies that would help us achieve the vision, and identified specific actions, or tactics, that would help us execute the strategies. The measurement sticks we created were less analytical and slightly more subjective – a review of support issues, overall community tone about the product, and a survey of users after they had used the product. We even ran a survey of users that abandon the product to find out why they left us (was our strategy failing or were they the wrong user profile?).

Here is a visualization of a couple of these examples:

Strategies Focus on Concepts, Tactics on Specifics

As you may have realized from the examples, a good strategy doesn’t have a lot of specifics about the actions. In fact, a good strategy should be adaptable to start or stop using specific actions, or tactics, at any time. A strategy for managing cholesterol doesn’t specify jogging or swimming, it identifies an amount of cardio recommended to achieve the desired result. If the patient executes the strategy with jogging, and either doesn’t like it, or gets injured, the strategy is flexible enough to allow them to introduce an alternative tactic—swimming—that is still in line with the strategy. Strategies are all about what you can do at a conceptual level – a planning level – to achieve your vision, and the tactics are the specific execution – the specific action – you will take to fulfill the strategy.

Summary

All too often we see people executing with no idea of the over arching strategy. This is when motion is confused with progress. Executing tactics without a strategy to drive them is simply motion. It’s business masturbation. You’re very busy, but nothing useful is going to result from all the effort.

I personally put a huge value in companies and organizations that measure result instead of action; those that value what is accomplished instead of how active people are. You can identify these companies by who is getting rewarded and promoted – is it the people who are thoughtfully developing a plan and executing methodically against it, or is it the people who are very busy with projects that look good, but drive no real measurable advancement toward the vision?

As a Product Management professional I feel strongly that my value is in being able to define a product vision and a set of strategies that will make that vision a reality, and then identifying tactics that I, or others, can execute to fulfill the strategy. More often than not, the execution is done by others, by the troops (engineering, marketing, sales, support). For my product I am the general, and the product strategy is my art.

A Vision is Not Enough, and a Poorly Defined Vision is Worse

For any product group or organization to be successful they must know where they are going and how they are going to get there. I’m not talking about the product backlog or the release schedule – I am talking about something more abstract than that. Within the DNA of any product group or organization there needs to be a driving force and a code of conduct. The compass that guides the group. I am talking about a vision and a set of principles that guide a product group, organization, or even a company (from here on out I’ll use ‘organization’ to refer to all of these).

The organizational vision provides direction and informs all constituents – employees, partners and customers – what the organization is trying to achieve. In partnership with the vision, a set of organizational principles provides working guidelines and informs all constituents how the organization will operate.

Defining a Vision

A vision statement is something that needs to be taken very seriously, with time and effort put into it. The vision statement becomes the North Star for the organization. It defines WHAT the organization is attempting to do or become. Pithy, jargon-filled vision statements provide no value; they provide no direction. As a member of an organization how can I make decisions about my work and how I use organizational resources if the vision doesn’t provide me any guidance or direction? If the vision statement says something as trite as “We strive to build great products” how am I armed to make good decisions on a day to day basis, or even in strategic planning? Conversely, complicated, all-encompassing vision statements provide equally little or no direction.

A vision statement should succinctly define the future you see for the organization – it should say a lot in as few words as possible. A good vision statement is easy for every constituent to remember and provides direction. Conversely, generic vision statements, especially those that provide no clear differentiation from others in the market, don’t help the organization align and head in the same direction.

Take for example the following:

“Be a highly effective, lean and fast moving organization that builds high-quality products that customers love.”

This sure sounds great. Who wouldn’t want to be a highly effective, lean fast moving organization? Who wouldn’t want to build products that customer love? Does this really provide much direction? Does this really provide much differentiation?

Imagine the alternative vision statement from a competitor:

“Be an ineffective, bloated and slow moving organization that builds mediocre products that customers simply tolerate.”

No one is going to have that as their vision statement. The fact is, the first one is simply too generic and vague. It’s a vision statement of common sense, not direction. No one in the organization is going to make better decisions based on the first vision statement (can you imagine – “Well, I was going to ship the product with this critical bug, but our vision is to make products that customers love, so I better get it fixed”).

A good vision statement both directs the organization and identifies what sets it apart from its competitors.

For example, consider the vision statement from Amazon.com:

Our vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.

With this vision statement it’s easy to understand what the company wants to be, and for the members of the organization to make decisions about how to use company resources. Any decision that needs to be made can be evaluated against this vision. Answer the following question and you will have the answer:

Will allocating resources to a given idea move the organization closer to the vision?

As we began the journey to create and bring to market Icenium, I set forth a vision that defined what Icenium should become.

Icenium is all you need to build applications for the most relevant mobile platforms in the world.

The vision for Icenium is clearly targeted at mobile devices – but not all mobile devices, only he most relevant ones. Additionally, Icenium should be all you need; in other words, it should enable coding, testing and publishing an application for the devices it targets. Every decision we make about features and capabilities are evaluated on how they enable this vision.

If the vision defines WHAT an organization is trying to become, then the principles define HOW it will get there.

Defining Principles

When I say that the principles define HOW an organization will achieve its vision, I am not talking about the execution plan – the sequence of steps to go from A to B. Rather, I am referring to the way in which an organization operates in order to achieve the vision. I am referring to the day-to-day behaviors of everyone in the organization. I am referring to the culture of the organization.

Without principles there is no common ground – no way for all the members of the organization to come to terms with one another. How does an organization make decisions when there is not guidebook for how to behave? How does conflict get resolved when there is no common code of conduct?

Imagine if you lived in a world without principles? What would guide you as you made decisions? If, by principle, you don’t steal, then this is an absolute. You can’t live by this principle, and then steal a little bit. You either live by the principle, or you abandon the principle. In the worlds of the immortal Yoda,

Do. Or do not. There is no try.

Amazon.com has very public Leadership Principles that guide the company in how they achieve their vision. These principles are well known (or at least very public), and every employee has their performance measured by both what they accomplished (the results they got) and how they fulfilled the Leadership Principles along the way. While I won’t go into all 14 Leadership Principles, I will examine a few to demonstrate how principles are used to guide an organization.

In their quest to become earth’s most customer centric company, Amazon.com has defined a principle to support the end goal – Customer Obsession.

Customer Obsession – Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers.

At the very core of Amazon.com is customer obsession. Not only is it part of their vision, but it is part of their guiding principles that define how they work on a daily basis. Every decision they make should be evaluated against this principle. In every decision they should be asking themselves, “Are we doing this for the customer?” and “Will this improve our customer’s experience with us?” If both answers aren’t a solid, clear and concise “Yes” than their decision is made for them – don’t do it.

Principles often come from the founder’s or the organizational leader’s personal beliefs. For Amazon.com, another principle is Frugality, which has been a well documented personal belief of the founder, Jeff Bezos.

Frugality – We try not to spend money on things that don’t matter to customers. Frugality breeds resourcefulness, self-sufficiency and invention. There are no extra points for headcount, budget size or fixed expense.

Again, this principle can and should be applied in the daily life of every Amazon.com employee. This doesn’t mean that Amazon.com is cheap – I don’t believe they are. In fact, I believe they spend money very wisely when they need to. Here in Seattle, Amazon has bought up a lot of property and built or bought some very nice buildings for their employees. This is money (a lot of money) spent on things customers don’t see, but it enables the company to operate more effectively. The frugality is revealed in the superfluous detail, in the lack of extravagance within the buildings. The desks are simple constructions of 2×4’s and doors. The wall paper isn’t some fancy design – it’s maps or newsprint in some cases.

In another case of frugality, Mr. Bezos spent over $700 million to acquire some robotic shelving technology so that the shelves containing product could be moved to the warehouse worked, rather than the other way around. This is a huge amount of money – but it wasn’t spent simply because they could do it. It was spent because, in a pilot they found that packing and shipping was more accurate and efficient using this technology. In other words, the expense directly benefitted customers.

Having a set of principles enables all Amazon.com employees to make good decisions in their daily work. In some ways it gives each of them a WWJD (What Would Jeff Do) barometer.

As we defined the vision of Icenium, we established some core principles. Some directly influenced by the corporate culture, and others define by me and the team, to guide us in creating the right product.

Simplicity – Every feature and capability added to Icenium should serve to simplify the developer workflow of building, testing and publishing an application.
Decouple Platforms – Developers should not be restricted to target only platforms that are compatible with their development platform (OS, Hardware). We should strive to decouple the two ends of the application spectrum whenever possible.
Skills Reuse – Icenium should enable developers to use the skills they already have, rather than require them to learn new skills. Whenever possible Icenium should provide the option for a developer to use technology or languages they already know.
Start Fast – A developer should be able to get started with Icenium in under 5-minutes. Any tools that a developer is required to download to use Icenium should not prevent them from creating a new project and writing code almost immediately.
Developer Choice – Icenium should enable developers to chose the technology they prefer and never lock them into our technology stack.
Customers Drive the Roadmap – Our customers are who we build Icenium for and thus their needs are the primary driver of every product decision we make. We strive to have strong communication with our customers to better learn about and understand their needs so that we can build solutions that meet and exceed their expectations.

This set of principles armed us with the ability to make decisions and trade-offs along the way to deliver to our customers a product they would love (and isn’t that everyone’s goal). As we set out to make a product that was all a developer needed to build applications for the most relevant mobile platforms in the world, we could make decisions about how we built the product by evaluating those decisions against the principles. Should we package the platform SDKs into the development environment, or should we abstract them as services? Test that question against the principles of Simplicity and Start Fast and you have your answer. Should we base our projects on Apache Cordova? Consider that the most common technology skills among developers in HTML and JavaScript, and overlay that on the Skills Reuse principle and you have your answer.

Principles define how we behave, as individuals and as an organization. Without principles we have no guidebook for how to fulfill our vision. We are left to figure it out along the way, which ultimately leads to churn and, in many cases, unresolvable conflict. By defining a set of principles everyone knows how to operate, and while conflict may still occur, it is resolvable by discussion the conflict with the principles in mind. In fact, i n the book Getting to Yes: Negotiating Agreement Without Giving In, 3rd Edition by Roger Fisher and William Ury, the authors states:

Conflict is an inevitable—and useful—part of life. It often leads to change and generates insight…The challenge is not to eliminate conflict but to transform it. It is to change the way we deal with our differences—from destructive, adversarial battling to hard-headed, side-by-side problem solving. We should not underestimate the difficulty of this task, yet no task is more urgent in the world today.

Principles are the tool that enable an organization to resolve conflict more easily. They are the objective criteria that everyone in the organization is aligned to, and the only real discussion to have is about the interpretation of the principle(s) on either side of the conflict. For example, in the case of Amazon.com, I’m sure they frequently get into discussions of what the Frugality principle means, and whether or not a spending proposal adheres to the meaning and intent of the principle. With this in mind, it is easier to resolve the conflict by focusing on the meaning of the principle, and not the pressure or influence from the other side. With Icenium, for example, if a new feature proposal makes the developer workflow more complicated without a significant trade-off, the decision is an easy one.

Wrap-up

The combination of (1) a well thought out vision, and (2) a set of principles you are willing to live by could very well be the most important two artifacts you create for your organization. They are so fundamental to everything you will do. Without a clear and concise vision it is difficult to know where you are going. Without an agreed upon set of principles, it is difficult to know how to act.

Don’t fall into the trap of defining too generic or a vision. If you can Ctrl+F / Ctrl+R your name with your competitor’s name and the vision holds true, you need more work. Your vision should be specific and clear and differentiate you. Don’t have the vision to “always put customers first” – have the vision to be “earth’s most customer centric company” – and if you competitors strive for the same vision, then beat them at it while also differentiating yourself.

Define your principles now. It’s never too late. Decide who you want to be as an organization and write it down. Don’t have a principle that says “we will be transparent” – that’s too ambiguous. Have a principle that says “One-up, one-down and all around – we strive for transparency through by ensuring all team members can articulate the product strategy (one-up), the customer needs (one-down), and what is happening in the organization (and all around).”

Now go make great products.

Product Positioning 101

The past two days in my new job have been a whirlwind. We’ve been in a 2-day leadership summit spanning all of the existing product groups, and the marketing and evangelism teams. During the conversations one of the topics turned to product positioning. Not because Telerik has any particular issue with positioning, but rather because, as the company grows there is some concern about how we can keep the positioning and messaging of both the company and the products consistent as our customers engage with different team members across the various divisions, including our marketing material, website, team member engagements at events, and customer interactions with our sales and evangelism teams.

This is not a unique problem to Telerik or even to small growing companies. I wrestled with this at my last job overseeing a large product (Visual Studio) at Microsoft. This is a pain felt by anyone responsible for a product, a product line, or ever their company positioning. Not a new problem and easily addressed with some conscious work to create a positioning and messaging document. This will be the touchstone for anyone that will talk about your product. It will inform them of how to position the product in the market, and provide the specific messages (talking points) to use depending on the context of the conversation.

Typically you would want to create the positioning statement (the primary component to your positioning document) early in the product development phase. As it turns out, that is exactly where my new product division is – the concept has been proven and demo’ed (which is what drew me here) and now it is time to create a product and a business. For me it’s about applying the basic structure for product positioning, which has been around ever since Eve tried to convince Adam to eat an apple.

A product positioning statement has four main components – the target, the frame of reference, the differentiation, and the reason(s) to believe. Allow me to elaborated.

THE TARGET
The target is who the product is for – who is the target user or customer of the product. The key to a good target definition is to balance being specific with being concise, you need to describe the target well enough that they can be identified, without being so verbose that your positioning statement goes beyond one or two sentences. Using the Adam and Even example, the target for positioning the apple is “hungry men willing to be adventurous with their palette” (after all, Adam had never had an apple before).

THE FRAME OF REFERENCE
The frame of reference is the known object or subject area that The Target can refer to in order to understand what the product is. Before the TV there was little or no easy comparison, so the frame of reference may have been something like “an entertainment device that blends the in-home enjoyment of radio with the visual stimulation of live theatre.” For the apple referenced above this may be something as simple as “a natural snack food.”

THE DIFFERENTIATION
The differentiation is the thing or things that set your product apart from similar offerings from your competitors (let’s face it, if there is no differentiation then there is no reason for a customer to choose your product over a competitor). The differentiation can come in may forms – feature deltas, price, quality, support, social acceptance, etc. For example the differentiation of a Sony TV and Samsung TV may be Sony’s reputation in the electronics business, or their track record of performance, since both TV’s likely have the same features. Samsung’s differentiation my be price (Sony is likely to charge more for their reputation). Going back to our apple, the differentiation may be that it “is sweeter and juicier than any other fruit in the land.” Of course, that a big claim – and that is what differentiation is, nothing more than a claim – and it needs to be backed up.

REASON(S) TO BELIEVE
The reasons to believe are the proof points to back up your claims of differentiation. For example you may claim better quality than your competitors, and now you need to provide the reason to believe you, which may come in the form of independent analysis (e.g. JD Powers & Associates Award). The reasons to believe should help your customer believe the claims you are stating to be fact, not simply your opinion. For the apple, it may not be about independent verification (since there was no one to verify it except for what my daughter refers to as the “sneaky snake”), but rather a believable piece of evidence, like “it was grown in the most fertile soil in the land – the Garden of Eden.” While this isn’t specifically proof that the apple is “sweeter and juicier than any other fruit in the land,” it is believable that the Garden of Eden would produce better fruit than anywhere else.

Once you’ve gone through the effort to define the four components, you can pull them all together into something like, “For hungry men with an adventurous pallete, the apple is a natural snack food that is the sweetest and juiciest in the land because it is grown in the most fertile soil in the land – the Garden of Eden.”

Clearly this is a simplified example, but the format and components are time tested and proven. Once you have your positioning statement you are ready to move on to defining the specific messaging that goes along with your product (how will everyone in your company talk about your product).

I’ll cover messaging next time.