I have found it quite shocking how often “product development strategy” is talked about. And yet, I hardly ever see any real advice or tangible examples of what actually makes good a business strategy, particularly around product development strategy.
My hope is this article throws a lifeline to all of us in the product industry, while also redeeming the phrase product development strategy, so it doesn’t sound like something that would show up on Forbes' list of most annoying, pretentious, and useless business jargon.
I’ve broken down every winning product development strategy into 5 key elements. If you’ve just been asked to present your product development strategy to the board next week, then you’re in luck!
Use these 5 key elements in your strategy for the new product development process, and you’ll not just demonstrate competence in the product management role they’ve entrusted you with, but also instill in them a confidence that will satisfy their curiosities until product launch day.
Table of Contents
- What Is A Product Development Strategy?
- 5 Key Elements Of A Winning Product Development Strategy
What is a Product Development Strategy?
In order to explain what a product development strategy is, let me first say what it’s not. A product development strategy is not a list of features or initiatives for a new product or existing product.
For example, your stated goal might be “to create a video platform that allows creators to upload and share their videos.” This communicates the what and leaves the door open for you to set dates and communicate the when, but it does nothing for the how. Product development strategy is all about the how—in this case, how you and your team plan to create the video platform.
The product development strategy communicates:
- Vision: How will we motivate the team?
- Goals and objectives: How will we know what to do?
- Product roadmap: How will we know where we are going?
- Key metrics: How will we know we are on the right track?
- Who is on the team: How will we execute successfully?
Now that we know what a product development strategy is (and isn’t), lets dig into each of the key elements mentioned above!
5 Key Elements Of A Winning Product Development Strategy
1. Vision Drives Product Development Strategy
The first element of a winning new product development strategy is an inspiring vision. For new products, this vision is informed by an earlier idea generation or new product idea brainstorming stage.
Writing your Vision
Authoring an inspiring product vision (sometimes called a product concept) can be extremely difficult. It involves looking beyond just what your product does and how it does it, and looking at why it does it. In Kathy Sierra’s book, Badass: Making Users Awesome, she inspires her camera manufacturing readers to “Upgrade your user, not your product. Don’t build better cameras—build better photographers.”
If you find yourself in the camera manufacturing industry, then your vision should have nothing to do with what your product is, how your product works, or how it fits into your product line or other product offerings—but why it exists, which is to make photographers.
By merely speaking it, a strong vision will compel your listeners to see in their mind’s eye the utopia your vision represents. Make sure this vision speaks to your target market, as they are the group that your product is being created for. It should also indicate your competitive advantage and what differentiates you from your competitors.
I challenge you to read the following three vision examples and see if your imagination does not immediately begin painting a different world than the one we find ourselves in today.
- “We’re on a quest to make natural, delicious, healthy drinks that help people live well and die old.” — Innocent Drinks
- “To create a better everyday life for the many people” — IKEA
- “Create economic opportunity for every member of the global workforce.” — LinkedIn
Communicate your “Why”
An inspiring vision that communicates the “why” behind a product will inevitably guide your team in the right general direction through the product development life cycle.
When you are idea screening your eccentric CMO’s newest and greatest feature request (we’ll call him Jeff), you can confidently say “no” without feeling bad! You’re chasing a world that is dramatically greater with your current product in it than one without. As flashy as Jeff’s idea might seem, and as much as you may want to please him, your vision is too great to sacrifice it for something unnecessary.
It’s also important to back up your vision with market research on your current market, and any previous business analysis. Also consider whether you are entering a new market, filling a new niche, or providing a better offering in an existing market, as well as which distribution channels you are using. You can also conduct concept testing with potential customers to see how they respond and get customer feedback at an early stage.
Along the way, your team is going to experience crashes and dips in their motivation and energy. Additionally, they’re going to accomplish small wins that should be called out and celebrated. In both cases, a vision helps you walk through the valleys of frustration and defeat—while at the same time giving you perspective to notice when something (no matter how small) has gone right and pushed you ever forward towards the vision.
2. Goals & Objectives Define the Product Development Strategy
If vision is what drives the strategy, then goals and objectives are what define the strategy at its core. When starting new product development (NPD), or laying out the market development strategy for an existing or new market, you should set specific, measurable, achievable, realistic, and time-based (SMART) goals for you and your team.
Examples of a product development strategy with SMART goals:
- Launch three new core features this year (Market Differentiation Strategy)
- Increase retention rate by 25% (Usage Strategy)
- 100 new users this month (Growth Strategy)
- Publish three case studies a quarter (Marketing Strategy)
Starting with a SMART goal usually gives way to clear and actionable next steps.
For example, “launching three new core features this year” may include a design sprint or product preview, which enables you to ideate, design, build, and test new ideas in a very short amount of time.
From there, you can roadmap the design, build, and launch of each of the three new core features.
Related Read: 10 Best Product Planning Software
3. A Roadmap Guides the Product Development Strategy
So, your team has the vision to inspire them through to the end, as well as goals and objectives to define what they’re going after. Now they need a route to get there!
The third key element in a winning product development strategy is product roadmap.
Unlike maps used for navigating road trips or urban transit stations, a product roadmap that guides strategy is one which is:
- detailed in the immediate future (next 2-3 sprints)
- more generalized for the next 3-6 months, and
- thematically organized for the next 6-12+ months
Detailed in the immediate future is communicating exactly what problems, themes, or outcomes your team will be confronting in the coming weeks, while also pointing to the general direction of where the product will be in the coming months.
In other words, you as the mapmaker will provide more clarity and focus on the things in front of you in order to instill confidence and prove reliability, while providing people with just enough information for the distant future. Though they may not know exactly what things will look like, they at least know where they’re going, how they’re getting there, and when they can expect to arrive.
A common misconception for product roadmaps is that they are feature-driven, rather than problem, theme, or outcome-driven. By focusing on features, the team gets stripped of their autonomy to solve problems and becomes boxed in by predefined solutions.
4. Metrics Sustain the Product Development Strategy
Metrics are the fourth key element to a winning product development strategy. If you have been dropped in the middle of a forest with only a map and no sense of direction, you’ll have a difficult time placing yourself on the map in relation to where you are.
Alternatively, if you begin a long journey with only a map, and nothing to continually mark your path as you progress, such as a compass, then you’ll most likely begin to stray ever so slightly off the course with each step.
Like a compass, metrics and KPIs keep travellers on the right path as they push towards the end destination.
Metrics allow us to focus on the details, while still ensuring the product stays on the roadmap and doesn’t stray too far from customer needs.
Examples of product development metrics:
- Do your users stick around after first interacting with the product?
- Are your users following the journey you expected them to take with your product? Are they interacting with the features in the way they were designed?
- Does the product meet your customers’ needs?
- Are your users discovering and successfully adopting the features you release?
- The prequel to conversion and renewal rates - do you know the leading indicators that lead to those actions?
Consider how your metrics connect with the marketing plan for the product, and the marketing metrics that will be covered, such as conversion rates and adoption rates.
5. A Solid Product Team Executes on the Product Development Strategy
Behind every great product development strategy must be a solid product team and development team that can be relied on to execute what is in front of them. That is why the fifth and final key element to a winning product development strategy is a solid product team and development effort.
Before diving into all the practical aspects of a product team, I’d also encourage you to pair these practicalities with many of the intangible qualities that come with a solid product team.
Aspects of a solid team involve a product manager who can keep a steady hand on the wheel, even when the waters are rough. The product management lead (product owner, manager, or otherwise) must have the ability to guide the rest of the team to the finish line.
If your new product involves user-facing interfaces, then the team must also consist of an efficient product designer, who is either paired with a product strategist or an expert in user experience themselves.
Of course, steady leadership and good product design alone are not good enough to get to product launch and on through the product life cycle. We must have skilled developers who are experts in their craft and are able to build with scalable frameworks and clean, reliable code.
You’ll want to call out their areas of expertise and what development languages they will be using in order to show that this team can scale with the workload required.
Finally, a team is only as good as the code that they produce. Good code is nothing if not clean and of high quality. Therefore the final key player every winning product team must have is the quality assurance or testing engineer.
Although it is ultimately up to the entire team to test frequently and thoroughly, teams who include testing as part of their roster will outperform any team who finds it unnecessary.
As my grandfather was famous for saying, “Do it right once or do it over twice.”
Overall, a winning product development strategy should define the direction of a product and what you would like to achieve.
A strong vision will paint a picture of the world your product will create in its entirety, while the goals and roadmap display clear direction.
Your metrics will keep you on course, and a solid team will execute the plan and create a successful product.
If you find yourself in a position where you must present your product development strategy to stakeholders, feel free to use this article as an outline. Introduce your strategy with the product’s vision, and show how that vision will be achieved through the goals, roadmap, metrics, and a killer team.
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