In my last post I talked about the fundamental importance of prioritization – Manage the Funnel – Prioritization is Painful, But Your Credibility Depends On It. Here I’ll discuss the role of the market facing product team in preparing leaders to make the tough decisions necessary to define organizational strategy. This post focuses on strategic investment in market driven opportunities as opposed to contract driven delivery. Portfolio management for customer commitments is a different conversation, and I will not dive into it here.
I’ll offer thoughts below on approach, but consider your own organizational fit, market, and product context when you evaluate your process. Remember that outcomes are what matter. Don’t get dogmatic in a method or a process – establish one to ensure consistency and activity, but adapt when needed. Lastly, as you think about the process remember that early stakeholder engagement and appropriate transparency are more important than the specific steps.
The Cycle of Organization and Product Strategy
Before any epic, feature, or story priority can be determined the organization and product strategies should be defined, communicated, and understood. That takes a deep understanding of the market, and it is likely your market(s) are big enough that no one person on their own can be in every customer discussion, sales call, analyst meeting, or industry conference.. This is where your market-facing product team comes in. This team provides a holistic understanding of the market dynamics effecting customers, the organization and the products. They meet with as many customers as possible, conduct extensive market research, monitor competitors, meet with analysts, capture feedback from customer support teams and interview leaders to understand business activity affecting their markets. This is the team that pulls it all together and brings leadership the necessary context to make informed strategy decisions.
Organizational and product strategy definition is a learning cycle. Market facing product leads provide context to organizational leaders who make investment decisions that become the product strategy. An additional benefit is that the market context gained during strategy evaluations also allows leaders and their teams to provide better day-to-day tactical support for their customers.
Two things to consider when it comes to managing the cycle:
- Frequency – for a 1-year strategy evaluation the granularity is lower and will warrant greater frequency than a 5-7 year evaluation. Do it often enough to support your markets, but not too often. Too frequent and you will destabilize your teams. You have to give time for ideas to come to life in your product. That takes patience and discipline. The better the up front effort the easier it will be to remain disciplined.
- Constraints – strategy determination by its very nature needs to have a bit of leeway to ensure you don’t constrain innovation. However, reality has constraints, and if you ignore them its likely your strategy will not be executable. Be sure to consider the hard constraints like time or technology, and create self-imposed constraints such as cultural cohesion, Engineering growth rates, proper resourcing ratios and market focus.
The Market Review
The market review is the foundation of the strategy planning processing. It includes a review of all markets at one time to ensure leaders have a holistic and consistent view of each market, its current state, and the opportunities that exist. A market facing product lead will maintain an ongoing knowledge warehouse where they aggregate market information and insights. The formal review acts as a summary of the key insights. The format should fit organization style and culture. Some organizations will require a 20 page brief, others a 3-5 slide presentation. In any case as a product lead its best to always create at least three levels of detail:
- Full library of documentation
- 15-minute pitch
- 5-minute pitch
If you are in an organization that only wants a 3 – 5 minute overview don’t discount the value of creating a broader library of documentation. Oftentimes writing the full multi-volume story is where ideas crystalize, important points become clear, and you determine the best way to frame the short version of the story. As a result, always create it, even if it will not be formally presented. It will become an excellent reference document in the future.
The market review includes:
- Market definition – this may sound obvious, but it is critical that everyone have the exact same view of the ‘market’. Restate what defines the market in quick accessible terms.
- Product portfolio definition – share the positioning for all products offered to the market along with the supporting functional and technical architecture diagrams. Oftentimes markets will require shared capability, and shared technical components. Incorporating functional and technical architecture diagrams as part of the product definition allows leaders to see both the market view of the products and the underlying structure. As all markets are reviewed that visibility will help identify where investments in a single technical component may benefit numerous markets.
- Market fit – as markets evolve its important to monitor how well solutions are meeting customer needs. The market fit is a collection of detailed sub analysis including profitability, win/loss, and competitive intelligence. The collection of these data points compared to the addressable target market will allow the product lead to make specific statements regarding current market fit. Investment opportunities should focus on improving market fit.
- Growth projections and impediments to expansion – for each market there is a need to understand potential for growth, and impediments to that growth. Impediments may be due to technology limitations, infrastructure problems, technical debt, service-offering limitations, resourcing, or time. This section of the review offers a pragmatic view prior to discussing opportunities and shows where impediment removal may be necessary to allow for future innovation.
- Investment Opportunities – the market facing product team maintains a rolling list of new opportunities through regular interaction with the market and internal stakeholders. Opportunities could include new capability, new products, or infrastructure investment. As each opportunity is identified and scoped it is prioritized within the investment opportunity backlog. When the time comes for a regular market review the product lead will need to determine which and how many opportunities to present. For each opportunity there are a number of key details that will need to be included to show the cost versus benefit. In a future post I will dive deeper into what is needed to present investment opportunities and will discuss some strategies for organizing the content.
Making some decisions
If the product team has appropriately presented the market overview and its corresponding opportunities, then leadership should be able to quickly narrow 20 – 30 opportunities down to 10-15 and after further deliberation down to 5-7 to execute. There is nothing easy about making the final decisions that shape the strategy. With the right insight from a market facing product team, decisions should be more informed resulting in enhanced discipline and stability during execution.