Institute of Product Leadership
Search
Close this search box.

5 Key Pillars of Strategic Product Management

By Sinduja Ramanujam – Technical Product Manager, Meta

Product strategy, and strategy prioritization tend to be very crucial in the realm of product management. These processes guide the development, positioning, and lifecycle management of products, ensuring alignment with market demands, customer needs, and business goals. 

This blog will delve into a range of effective prioritization techniques shared by Sinduja Ramanujam, Technical Product Manager, Meta, that she has garnered throughout her career experience. It defines product strategy, how an effective product strategy can be crafted, including the approach utilized when tackling new problem spaces or devising user-centric solutions. This blog will also explore the five core pillars that constitute a robust product strategy and are deemed vital for the establishment of a strong product foundation.

Key Takeaways:

  • Product strategy, based on the company’s mission and vision, drives product decisions, especially for companies managing multiple products.
  • Here we will explore the five core pillars of a robust product strategy. 
  • Further delving into the further segmentation within each of these core pillars.
In this article
    Add a header to begin generating the table of contents

    What is Product Strategy?

    When considering the broader perspective, whether envisioning it from the summit of a mountain or the tip of an iceberg, one should view the company’s mission or vision as the driving force behind its product strategy. At that vantage point, there are individuals tasked with envisioning the company’s overarching purpose, mission, and vision. This is the foundation from which the company strategy emerges. Given that companies often manage multiple products, it becomes imperative to formulate a comprehensive strategy to propel the entire enterprise forward. 

    For example, Microsoft encapsulates its purpose in the succinct mission “empower everybody to achieve more,” which serves as the nucleus for all product-related decisions. This represents the company’s mission and vision. The company’s strategy also evolves – in the past, it was focusing on placing a PC on every desk, and now emphasizes a “mobile-first, cloud-first” approach.

    Product strategy resides beneath the dual umbrellas of mission and company strategy, encompassing tailored approaches for each product. While the company’s mission and strategy illuminate the path, each product necessitates its own distinct strategy. Within the realm of product strategy nestles the product roadmap, and how that roadmap should be executed.

    Strategic Product Management

    The five pillars of strategic product Management tend to follow a seamless sequence. It begins with a customer-centric approach, the process moves on to delineating the solution space. Subsequently, the prioritization of solutions takes center stage, accompanied by the formulation of validation hypotheses. Finally, the journey culminates in immersing into the metrics machinery.

    1. Customers

    Customer domain tends to be the initial cornerstone around which a comprehensive product strategy is crafted. The two segments that this first bucket could be broadly categorized include:

    a. Target segment: The process commences with a meticulous examination of all the target segments pertinent to the product’s focus. 

    For instance, envision the creation of a real estate app, so what are the different things or who will be your target segment or your customers? Let’s bifurcate the potential customer base into two principal categories: first-time home buyers and seasoned home buyers. The exercise of segmenting unveils valuable insights, not only outlining target categories but also identifying the specific information prerequisites such as age, demographic placement, and income range, among others, which aids in comprehending the distinct needs of both first-time and seasoned home buyers.

    b. User Research: It involves the construction of a user lifecycle map and user stories, effectively steering product decisions. This map enables you a holistic perspective of your current status quo and areas that need improvement. User research can also be harnessed as a compass to drive your product decisions, helping you prioritize features and functionalities that resonate with the customers’ needs and desires. 

    The data amassed from the first-time home buyer and seasoned home buyer categories play an instrumental role in crafting a concise user story that encapsulates a typical day in the life of these users. Before delving into the intricacies of user research and segmentation, you should prioritize within these designated segments. This pivotal choice subsequently informs your user research, it helps you find the right people, formulate the right questions, and create the right user story.

    A customer journey map or user lifecycle map, elucidates the current user encounter within the product which guides the selection of features, experimentation strategies, and prioritization endeavors. Subsequent to this portrayal, it serves as a compass for determining necessary adjustments to align with either a predetermined framework or specific attributes sought by users or cohorts. The adoption of the AAR (Acquisition, Activation, Onboarding, Retention, Renewal) framework facilitates enhanced user experiences and life cycle decisions, taking into account distinct stages of the user journey. This method particularly aids in scenarios where resources are constrained. Following each user’s journey, an evaluation ensues, classifying aspects into three categories: commendable elements, areas necessitating improvement, and those deemed unsatisfactory. This evaluation mechanism distinctly highlights zones demanding significant modifications or minor refinements, fostering a clearer understanding of enhancement priorities.

    2. Solution

    The second key pillar of product strategy involves delving into the solution domain. The two segments that this second bucket could be broadly categorized include:

    a. Feature Ideas: This encompasses the formulation of feature concepts, contemplating trade-offs, constructing the feature roadmap, and determining whether to pursue ambitious moonshot ideas or streamline the development with a minimum viable product (MVP) approach. 

    There are two primary avenues for generating ideas, which include:

    i. Qualitative: It involves refining and enhancing existing features rather than pursuing revolutionary or outlandish concepts. It draws inspiration from user journeys, customer interviews, and user research – essentially, interactions with your user base. An additional source is the feedback submitted through platforms like Office Customer Voice, where users report their challenges. 

    ii. Quantitative: This aspect involves harnessing the wealth of data at your disposal, often processed by data analysts who employ techniques such as running models and querying SQL databases. This method allows the extraction of patterns from abundant data. 

    Together, these two components guide the development of future features, moonshot ideas, and novel growth opportunities. 

    b. Competitive Landscape: A well-known adage suggests that while it’s prudent to heed your competition to grasp industry trends, it’s equally vital not to become overly fixated on their actions to the point of forsaking your own innovative solutions. Consider competitive insights as guiding metrics, allowing them to inform your decisions, but avoid letting them entirely steer your course or dictate every choice you make.

    i. So how do I know if my idea can be done? 

    The process of evaluating the feasibility of an idea involves several key considerations, which include:

    ii. Does it fit into your product strategy?

    This is the very first question that you should be asking. For instance, if the primary business goal centers on acquiring new SMB users, a feature designed to retain existing customers might not seamlessly fit within the strategic framework. Hence in such a situation, the feature could potentially be redirected to a team focused on customer retention.

    iii. Does it affect the metric your organization has signed up for directly or indirectly? 

    Organizations often commit to a set of metrics, encapsulated as Objectives and Key Results (OKRs), and any proposed feature’s alignment with these metrics demands careful contemplation.

    iv. How does it compare against the other things that your organization can be doing?

    Comparative assessment also plays a pivotal role in the decision-making process. Factors such as Return on Investment (ROI), opportunity costs, and potential returns intertwine within this realm. During these events, Product Managers from diverse sectors present their concepts, substantiated by ROI projections and informed hypotheses. This process greatly influences the prioritization of features, although it is by no means exhaustive. 

    v. How many resources do I have and how long would it take?

    Resource availability and the projected timeline to implement the feature constitute additional core elements. Should a proposed feature require two dedicated personnel for two months to yield a modest $100 return, while an alternate feature commanded by another Product Manager could bring in $200 with less resource expenditure, a pure ROI standpoint suggests favoring the latter option. 

    3. Prioritization

    The third fundamental aspect that holds significant importance for a product manager is unwavering prioritization. The three segments that this third bucket could be broadly categorized include:

    a. Navigating Tradeoffs: It’s crucial to meticulously weigh your tradeoffs, each decision involves a delicate balance of pros and cons, and a product manager’s skill lies in discerning the optimal route, considering the resources at hand.

    b. Leveraging Stakeholder Insights: An integral part of this process is incorporating feedback from key stakeholders. These collaborators include designers, engineers, product marketers, leadership teams, user researchers, and others. Throughout the spectrum, from product ideation to solution development, involving stakeholders lends credence to your ideas and fosters a sense of shared ownership. This inclusivity leads to a harmonious relationship throughout the product’s lifecycle.

    c. Strategic Release Timeline: Strategizing the timeline for product releases is another crucial facet. The rollout plan often entails incremental steps, such as 1%, 5%, and 10% implementation. The plan then progresses, culminating in a 50% rollout. This phased approach enables the assessment of performance under different circumstances, including AA and AB testing scenarios.

    A straightforward quadrant approach has proven effective in prioritization, with quadrant buckets being “easy to achieve”, “difficult to achieve”, “small wins” and “big wins”, and four quadrants where tasks are categorized based on their level of difficulty and potential impact. Instead of fixating on the mathematical aspect, the focus here should be on the labels of rows and columns. In this framework, tasks in the “easy to achieve, small win” quadrant are seen as having minimal value. Conversely, tasks that are “difficult to achieve, big wins” are akin to tackling significant challenges, possibly related to new growth areas or targeting different user personas. We must start with tasks falling under the “easy to achieve, big win” quadrant. These tasks often require collaboration with various stakeholders from engineering, design, marketing, product marketing, user research, persona definition, and finance teams. Further tasks under the “quick wins” quadrant must be prioritized and “small wins” must be avoided. 

    A roadmap must be created, initially targeting the most straightforward tasks or “lowest hanging fruit,” which constitutes the Minimum Viable Product (MVP). Once this is achieved, the subsequent versions (V1, V2, and so on) are treated as additional quick wins. However, there’s a consistent trend where tasks initially considered less significant (“not star”) gradually transition to the realm of quick wins. As part of their strategic mission, the process must be broken down into distinct phases, such as Phase 1, Phase 2, and so forth. In Phase 1, they identify a specific “not star” goal, to attain this objective, a particular quick-win task must be accomplished. This approach fosters a sense of achievement within the team for achieving the “not star” goal. This approach signifies a continuous evolution from the product mindset while dividing tasks into manageable segments from the emotional mindset. 

    4. Hypothesis Generation:

    The fourth pillar is your hypothesis generation. It encompasses the formulation of various concepts and ideas to be tested upon release to production. These concepts often stem from customer feedback and the exploration of your solution space. Every solution within the solution space is generally treated as a hypothesis needing validation. The three segments that this fourth bucket could be broadly categorized include:

    a. Experimentation Setup: In the context of experimentation setup, the focus shifts towards identifying target audiences.

    When delving into setting up an experiment for the first time, the scenario encompasses treatment alongside multiple treatment controls, as well as control. From the standpoint of the treatment, upon its deployment to production, it represents a modification aimed at altering the experience for a specific user subset. Conversely, the control maintains the status quo that the majority of all users have historically encountered. The primary objective revolves around verifying the effectiveness of randomization, ensuring a seamless and unbiased distribution between treatment and control groups. Another critical aspect involves determining the duration of the ongoing experiment. At this juncture, the concept of a statistically significant number comes into play. This stage of the experimentation process provides valuable insights into the necessary duration to ensure a robust and meaningful experiment.

    How can you validate your hypothesis: The validation of hypotheses can be pursued through diverse quantitative and qualitative approaches. Quantitative methods offer insight into “what” is occurring, while qualitative techniques delve into the “why” behind the success of a hypothesis. After obtaining experimental results, engaging with customers, having focus groups, and having customer visits becomes pivotal to solicit feedback on user experiences, including treatment versus control comparisons.

    This validation process is generally classified into four main strategies:

    i. Customer Visits: Involves one-on-one visits to customers’ homes, allowing testing within their environment, and facilitating valuable insights.

    ii. Survey Questions: Employed in various experiments, survey questions gauge user sentiments and the likelihood of recommending certain features or experiences.

    iii. Focus Groups: Participants collectively engage with the same experience, permitting observation of diverse perspectives and experiences.

    iv. User Interviews: Conducted remotely, often involving device shipments, these interviews offer guided walkthroughs and recordings to capture users’ interactions and thoughts.

    All these qualitative methods complement the quantitative aspects of experimentation, enriching the overall understanding of the hypothesis’ impact and underlying reasons.

    b. Geographic Definition: The consideration involves determining the specific geographic regions and their distribution.

    c. Roadmap of experiments: It entails outlining the sequential plan and arrangement of upcoming experimental endeavors.

    Ensuring the functionality and effectiveness of the shipped product requires formulating a roadmap. The roadmap takes into account the presence of an organizational objective key result (OKR) and a corresponding non-star metric. The focus is directed toward enhancing the existing customer value, aligning with the established OKR framework.

    Before preparing a roadmap several experiments must be conducted and prior to the experimentation phase, meticulous preparation is undertaken. It involves setting up a scorecard categorized into tactical, non-star, and counter metrics, which takes to the fifth and last pillar of Product Strategy, metrics. 

    5. Metrics

    The fifth aspect under the key pillars of product strategy involves metrics. The three segments that this third bucket could be broadly categorized include:

    a. Tactical Metrics: Within this category, the focus is placed on measuring specific elements essential for evaluating the success of the feature.

    b. Non-Star Metrics: The second category encompasses non-star metrics, aligning with the business objective of increasing the subscriber count.

    c. Counter Metrics: The third category entails counter metrics, examining potential impacts on other areas, such as the lifetime value (LTV) and potential shifts in user behavior. These metrics play a pivotal role in validating hypotheses.

    Frequently Asked Questions

    Product strategy serves as the guiding force behind a company’s product-related decisions. It ensures alignment with the company’s mission and vision, driving the development, positioning, and management of products.

    Companies validate hypotheses through a combination of quantitative and qualitative approaches. Quantitative methods provide insights into what is occurring, while qualitative techniques delve into why a hypothesis is successful.

    Product prioritization involves making informed decisions about which features to develop and release first. This process requires careful consideration of trade-offs, leveraging feedback from stakeholders, and aligning with the company’s objectives and key results (OKRs).

    Microsoft’s product strategy is crafted beneath the umbrella of its mission and strategy, and it involves tailoring approaches for each product to ensure alignment with the overarching purpose while meeting the distinct needs of different customer segments.

    The AAR framework is a structured approach to understanding and enhancing the user journey within a product. This framework guides feature prioritization and decision-making, helping product managers focus on enhancing the user experience at each stage of the customer lifecycle.

    About the Author

    Sinduja Ramanujam – Technical Product Manager, Meta

    Explore Our Programs

    Institute of Product Leadership is Asia’s First Business School providing accredited degree programs and certification courses exclusively in Product Management, Strategy, and Leadership.

    Talk to a counselor today and embark on your journey towards becoming an exceptional product manager.

    Whether you’re seeking advice on career paths, looking to enhance your skills, or facing challenges in your current role, our counselors are ready to provide valuable insights and actionable strategies.

    Facebook
    Twitter
    LinkedIn
    Our Popular Product Management Programs
    Our Trending Product Management Programs
    X