Creating a product strategy in times of uncertainty

Welcome to another episode of the Product Bakery. I'm here today with my co-host Alex. Hi Christian. And today we're looking again at an episode without guests as it's Monday. Christian, I thought for today, we all know our current situation, Corona is at its peak. And I think it obviously affects also a lot of the companies. And a lot of the companies also have to rethink what they're doing. Maybe bringing it also a little bit more to the digital space, changing a little bit the directions, pivoting in some cases. So I thought, especially as you're also working with many different companies, for a product manager, what does this mean? How do you see the current situation through a product manager's perspective? Yeah, as you say, tough times at the moment. I think, especially when we look at every business plan or strategy that has been written last year, at least 80% of them are very likely due to this current economic and health crisis topic are not applicable anymore or are not up to date, I would say. Before I talk about the product manager per se, I think there are many companies or especially startups that not necessarily have a full-fledged product team. So there are maybe just one product person, whoever this is, whether it's a designer or a manager or analyst, or even just the founders who are realizing, hey, things are changing drastically and we need to adjust somehow. Yeah, and I think there probably are even some companies that are not in product organizations. And speaking about all these small businesses or small enterprises who have to use this current times also to become a little bit more digital, to think a little bit more product and moving away from offline services, they probably are starting even one step before without having anything. The digital space is definitely something that is more relevant ever. But aside from the digital space, as you said, it's super important to now take a look at what's going on around you and start coming up with a plan that helps you to go to this current situation and crisis or challenge. I don't see it necessarily always as a crisis, Alex, because in every change, there are also many opportunities that people can take and make use of and take advantage from. So I was thinking of talking today about how to deal with such a drastic situation that is going on from a strategic perspective and what people can do to go over this and come up with a plan that helps you to at least start taking initiative, not necessarily into the right direction. You never know what's going to happen, but there is this nice quote saying a bad plan is better than having no plan. Or the other one is a good plan executed now is better than a perfect plan executed in two weeks. And something that is right now a topic that many people are talking about is this topic of product strategy. But so you're saying you somehow need to look at this and come up with a plan, right? You need to stop just moving in the same direction that you've had maybe for the past couple of years and come up with a plan. How would you do that? So apart from the plan, you have maybe a plan as the CEO. The CPO has maybe a plan. The chief design officer has a plan. The product designer has a plan. So we all have a plan potentially, but what does it really mean? Because everyone having a plan in their minds or in their heads equals to no plan, in my opinion. You need to come to a point where you first of all write it down, discuss and align on this. And there are two things. If you look back 10 or 20 years ago, there was this business plan, which was this holy grail back then. But the issue with a business plan is that it usually goes five to 10 years into the future, which is, in my opinion, not really applicable anymore. So there's rather this kind of strategic thinking and this new term of a product strategy, which is rather something between six months and two years that helps you readjust and realign and going into a direction to an agile way. Yeah. And I think that's something I see also a lot when working with especially bigger corporations. They love these long-term plans. They love having the clear picture of what is going to happen, of how will the future look like. And I think in agile or especially people working on agile transformations or trying to make companies become more agile, that's the biggest struggle, because you need to get people comfortable also with the uncertainties and you need to live more the present and look at the very near future. Of course, like having this vision somewhere in place, but obviously working more in the present. The difference is though big companies, they have data they can rely on and they potentially, not every each company, but they also have money to be able to have a kind of buffer or to survive during such a phase, which smaller companies don't have. So that's why I think sharing a little bit these smaller steps to come up with a short plan that helps you to readjust and realign is my opinion the best way to get started. Even if you're a big company, you have this long-term business plan still these days that they love, but you need to come up with a short-term iteration or a short-term plan that you execute upon, because knowing that you want to be the market leader in five years is nice by acquiring more and more companies and entering your new markets. But how do you get there? That's the question mark that many people have at the moment. But what does that mean for an output like a roadmap? How can my roadmap look like if I want to look less in the future, but more coming up with a plan on how to tackle the current situation? Let's maybe first of all look at how you are able to derive a roadmap. And for this, you need a strategy. In order to be able to define a good strategy, you should have a vision in place. And we just talked a couple of episodes about that. So let's assume you have a vision and the goal of the vision is to give people a direction. You can also potentially work without a vision. But as I said last time, it's nice to say, hey, we have business goals that we want to achieve. But at some point, people always start asking the why. And if you have answers to the why, you will definitely have more buy-in from your employees to execute upon this. So the product strategy... Maybe just to make it a little bit more tangible, if we talk about vision and we talked about how to elaborate a vision, but maybe we can just imagine a vision for this discussion. So let's say, maybe I'm a fashion brand and I'm currently selling whatever my stuff in a few selected stores here in Berlin. And yeah, now I need to change and not sure. Do you have a possible vision for me that I could use now as a basis for my strategy? You as an Italian, I would need to ask you what kind of clothes are you selling and what is your niche and what is the goal that you wish your customers to achieve by your product? But let's say we are... I have one because I always had this idea... I gave you the input, right? Yeah, I always had this idea of bringing the good and nicely handmade ties to a more international market. So I am on-demand producing ties and I want to, let's say, my vision is that people can use them to transport kind of their personal brand for it a little bit more, like to have... The brand or the personality? Both. I think it's this like a tie generally, if we think about people wearing suits, is like this one thing that can make a statement about them. And I think this is like the vision that my company could have. And so far, yeah, I've only been working with some smaller shops here in Berlin and because of the lockdowns, I need to change my plan. Okay, let's assume your vision is to empower people to share their personality and their brand via hangouts with a nice tie in the future and in the current situation of a lockdown. Amazing, yeah. Amazing. So now the question would be, how do we get there? And for this, we should think about defining a good strategy. And it's very important if you define a strategy to look at three different aspects that should be merged together or should be reflected in a strategy, which is the product itself, the business and its goals, as well as the market. So I'm pretty sure that you have analyzed or that you have a clear understanding on what your market is. You definitely have sales goals, et cetera, and a product that is already on demand in the making, but still with the idea of, for example, selling cashmere ties or whatever kind of stuff is in your portfolio. So we have now a couple of things we are aware of. The question is now, how do we get there? And the very first thing is making sure that we have this vision and this should be always our guidance in our direction, how to go there, which direction we want to go. And as a next step, we should ask ourselves, or you should ask yourself, what are my business goals? So are you saying, hey, I want to still increase the last year's, my yearly revenue by 20%, for example. So, and this is definitely something that should be written down. And even if it's not perfect and it's going to change, I recommend start writing it down to have a list of things you want to achieve from a business perspective. And let's imagine now you are a small coffee shop or your small e-commerce company or a healthcare company or a fintech startup, whatever it is, you will never be able to hit a hundred percent of what you have written down. But most important is that you start writing it down because this gives you the foundation to first of all, focusing in one direction. And at the same time, also bringing everyone on a table and align with the people. Once you have this, you can start looking at your competition. So you know what you want to achieve and what your business goals are. Now, you need to understand the market. And even here is, and this is something that you see, especially in bigger companies, everyone is working on their own products and their own little teams that have a focus area, but looking at the big picture and saying, okay, we are in the Thai market and we have, I don't know, 1 billion Thais per year that are getting sold online or even on physical stores, et cetera. Analyzing this and writing it down is one of the most important steps. So you need to do a market analysis, which can happen in many ways. You can top down analysis, you can do a SWOT analysis, you can do a PEST analysis. There are many ways how you can analyze the market, but you should get started. And even if you just simply write down what the market cap is and what you want to get out of this is one of the first steps you should do. Once you have a clear understanding of what that is, you should also rethink or re-mention your personas in a strategy. And especially you as a designer, you like pretty much working with personas. So understanding who's your average persona or the person you want to address your product to is also something that always helps to be written down in a strategy paper, which doesn't mean that it's not existing in a company or that a design team has it already. Make sure that you have this one source of truth where everything is written down. I have to say, I do have my mixed feelings around personas. I'm generally not the biggest fan because I think some companies overdo it or misuse them. I see many people coming up with personas for the sake of having personas because everyone thinks they need them. But maybe also like generally curious if you guys have some feedback. Do you use personas on your day-to-day life or do you have any other formats, jobs to be done whatsoever, mindsets? Feel free to drop us a line. Happy to take this on also in a future episode. Okay, let's talk about target groups in that case. So a target group is maybe then the better way to at least phrase it. But understanding for whom your product is and also writing it down is again one little step that helps you to bring clarity and helps you to know for whom you're working. And again, if you go into many of the companies, everyone will say, yeah, we know who our customer is. But if you start asking questions, you will usually get different answers. Having a rough frame on what the market is, what the people are, what the business goals are, is the very first step. And with that, we start already forming a strategy. And to go a little bit further then, and that now depends on the size of the company, you can start including the teams who will potentially work on this to fulfill this. But this is more like a tiny step that is not necessarily needed, but for bigger companies, it makes sense because you have many multi-product companies, you have many teams working on different parts of the product. So involving them into a strategy paper can be helpful, but it's not needed. But then the next point is, and now we're slowly moving into the direction of the product roadmap, is once you have this frame set, you can start deriving your roadmap out of this and the product features. And it's very important to understand what is the USP? Why should people buy our product? What are we doing better than the competition or the rest of the world? What do we want to do to change the world? And this is something that should be definitely written down. So a couple of key product features you are working on right now, or you're aiming for in the future. And when I talk about the future, I'm talking about no longer than two years. There are many product managers discussing in different forums, when should I write a roadmap versus when should I do a product strategy? And I believe everything which is longer than six months should rather end up in a strategy than in a roadmap. Due to the fast changing times, it's really better to stay focused on a shorter term in terms of roadmap and everything which goes beyond can be then a roadmap. One little thing to add here, for sure, if you're an enterprise company that has long-term contracts with customers, it's pretty much sure that your product roadmap can be a year long. But again, if it's longer than that, then I really recommend rather going on a strategy. But speaking about strategy versus roadmap, purely in terms of output, how would a strategy compared to a roadmap, how would it look like? Is it like a list of texts? A strategy is a nice slide deck and a roadmap is usually a prioritized list or a gun chart or however you design it. And how do you use and communicate this strategy deck with the company? I see it in the responsibility of the product manager to drive those topics. In smaller companies, you collaborate a lot with C-level, with the founders, etc. In bigger companies, you go to your upper level, the head of the VPs, etc. And the communication part should always go upwards, first of all, to make sure that you are all aligned and that you have the same goals. Because we're talking about the future of the product and with that, the future of the company. And once this is clear, you go then the level down and talk to your teams and share with your teams what the strategy is, that they also get the answer to the question of why are we doing things, not only the what. Very interesting. Especially now with the COVID times and we obviously follow the market a little bit. Where have you seen companies changing their strategy? Or where do you think that a company did a good job in actually tackling the new needs of the market and the market movements? As you know, my roots are from e-commerce. So e-commerce is definitely something which is going crazy at the moment. And what they are doing or what most of the e-commerce companies are doing is scalability, because traffic increases drastically. Scalability not in terms of the tech stack, also in terms of the warehouses and the whole logistic and business processes behind it. I think they are doing a really good job. And then as the kind of evolution of e-commerce, we're talking about omnichannel and multichannel and all this enhancements of buying something online, picking it up somewhere or going to a store with no availability and then still getting it same day delivered. All these innovations are popping up more and more. And I think especially the e-commerce space as well as the fintech space, because e-commerce doesn't work without payments, are right now definitely benefiting from it. And I see many companies doing a good job in terms of scalability and adjusting to the current situation. I think here one thing that comes to my mind also that is fairly important when working on a strategy and especially like also when working with or on the target segment on the market and so on, is obviously also the aspect of bringing the users in. And I think like this whole aspect of doing some ethnography studies and seeing how did this current situation or how is this current situation affecting their day-to-day life and how do they change their behaviors. I think this is also a key aspect of a changed strategy. What I believe is that this is something that affects literally everyone. All our behaviors are changing. We are all at the moment forced to, for example, stay at home. My recommendation here is don't try to reinvent the wheel. Try to look around. There are so many people who are doing studies at the moment, who are sharing this publicly, where every company can benefit from. There is so much stuff that you get almost for free these days. The only thing you need to do is you need to look around. Yeah, that's true. Especially the big players and big firms who like really share this openly and have this IP. If I'm on LinkedIn, I see everyday behavioral changes studies or market data studies that are shared by big companies especially and you maybe notice the consulting firms. They are sharing so much stuff for free. It's really great to have a look around and this can save you a lot of time and a lot of money. Yeah, I had my hands on some of these decks. I definitely know what you're talking about and not only looking at some of the data that is being shared and provided by other companies or on social media. I think another very easy point is that we are using most of these parts and as we are all in the same situation, just like also looking at how we ourselves and everyone on our team change their behaviors could already be a good starting point speaking of being the user of your own products. Before we wrap it up, are there any other points that are important when working on the product strategy? Looking at your time business, something we should definitely not exclude are the numbers. Forecasts and data to anticipate the future are always very helpful and with that we see already a correlation to a business plan. With the difference that a business plan is usually a little bit more abstract and more longer term. Nevertheless, I recommend everyone if you have data and if you have for example revenue goals, sales goals or even development goals within the product and its development, write them down. So numbers and data is something which is in my opinion always great to close a product strategy to make sure that we know that our Thai business will increase the 20% revenue. Yeah and I think also depending if you're not the founder of the company, these numbers are especially what gives or what can give the management some comfort. Especially if we talk about moving away from 10-year business plans to shorter term like goals and strategies like having the possibility to constantly track it and iterate on it and having laid out what are also the metrics for success. I think this is also very important for the communication upwards and downwards. Absolutely and many people may ask themselves now how do I get started, how should the format look like and I really recommend just get started and start writing things down. There is no perfect template and if you start googling around you will find many articles about product strategy that give great advice and great tips. Most important is really to create a slide deck or google docs whatever you prefer and just start writing it down and having a couple of key headlines like for example the market, the target group, the business goals, the vision that already helps you to start forming this whole document. Just to throw in because I'm currently like hyping myself a little bit like one product moving away from slides and google docs and so on. I think shout out to Pitch who is like really changing the way we collaborate on presentations and slides. Maybe we can make sure to drop the link in the description because I think that's also a very nice tool and I think it's also very important to just mention again that whenever you work on these kind of documents it should be a shared effort. It should not be something that lives in your static files but it's something that you ideally work on collaboratively with the whole team. Talking about sharing this into the podcast description what I would also like to share is I created six months ago a product strategy template. It's a google slide deck you can have a look at this where I just summarized a couple of key points how to define a product strategy and it's built up in the following way it's I think it's 60 40 or 60 slides with usually for each topic that we just mentioned one slide of an example one slide of a couple of templates as well as an explanation and further reads so I'm happy to whoever is interested in that to share it with people and giving a template. Is it still up to date if it's from six months ago considering that we are constantly adapting and changing? Its purpose is to inspire people to get started with the product strategy so I would almost call it timeless. Amazing cool I think Christian we are already like almost 25 minutes in so I think there's nothing left to say then have a great start into the week. First day we have a new interview for you so make sure to subscribe to share and to stay tuned for our next conversation. And as we are also on social media feel free to drop us a line and tell us how you currently work on your product strategy and what are the challenges or success stories that you can share. And for everyone who is not on social media we also have our usual hello at product-bakery.com email address so see you there Bye!