What is a strategic product planning process?
Strategic product planning is the process of defining how you will achieve your vision. By working backward from your desired end state, you can set goals and initiatives to guide the implementation of your strategy and a timeline to achieve them. That timeline is often referred to as a product roadmap.
Why is it important to have a strategic plan?
Your products and services are the revenue engine for your company. So it is essential to have a unified plan that ties company-level objectives (e.g. grow sales in Europe by 20 percent) to the products (e.g. provide multi-level language support). This ensures alignment between your overarching goals and the day-to-day work, which is often referred to as the "execution."
In the table above, you can see that the company-level objectives are linked to goals at the product level. The strategic initiatives define the high-level work needed to achieve the goals.
Without a strategic plan, you risk overlooking important business opportunities and making poor investment decisions. Internal confusion around what to focus on leads to funding work that is not strategic. Having a complete view of how your goals connect at every level of your organization ensures efficient use of people, money, and time — ultimately, a more successful company.
What is the process for creating a strategic plan?
Strategic planning should follow a top-down approach that starts with the overall company goals and ties together supporting strategies at the division, product line, and individual product level. Executive and product leaders typically assume a leadership role to acknowledge the importance of strategic planning and to kick off the process.
While you can create successful products from the bottom up, it is more effective and efficient to determine where you would like to go first and then build your way there. That said, strategic planning can be very challenging to navigate if your organization does not already have a defined process in place. Creating a framework for success is essential because it is complex and demanding work that requires dedication and commitment to do it well.
Before your team starts to work on your strategic product plan, you must have a clear understanding of your company vision and goals. As mentioned above, this work needs executive-level involvement. Without a clear vision and an agreed upon answer to "why are we here?" it is nearly impossible to align your product plans to higher level goals and a corporate mission.
Your vision defines your view of the future. It is the north star for the company and should drive all downstream corporate and product strategic decisions.
Ideally, your company and product leaders have already defined and communicated a clear set of business goals. But if they have not (or if you need to work with them to refresh them), consider the following questions to build a vision that is unique to you and will delight both customers and employees:
- Why are we in business?
- What do we do better than anyone else?
- What do our customers think of us?
- What do our employees think of us?
- What is the opportunity in our market over the next one, three, and five years?
- Are there new market opportunities?
- What are our revenue goals?
- What are our expense goals?
- Is technology changing the market or our business?
- What are our competitors doing?
- What are the top three most critical challenges our company will face in the next few years?
The responses to these questions will help you better understand the overall direction of the company and give you the clarity you need to set a winning strategy.
Divisions and product lines
If you have divisions, suites, or families of products, then the next layer of strategic planning needs to happen at the multi-product level. Companies use many different names to describe how they aggregate products. (Note: If you are in a single product company or do not go to market with a portfolio of related products or services, you can skip this section.)
If you do have a portfolio of products, product leaders typically define an umbrella set of goals and initiatives that span across related products. These should align to the higher level corporate goals and provide clear direction for individual product planning.
In the image above, you see a roadmap that has the Fredwin Software division with key strategic initiatives and the individual products that belong to that division below it. The releases at the individual-product level are rolling up to the initiatives at the divisional level.
Portfolio planning provides an opportunity to align around strategic initiatives that will impact multiple child products. It also gives you the opportunity to:
- Consider enhancements to the core platform infrastructure.
- Highlight dependencies between products.
- Identify the delivery capabilities needed to meet your goals.
This approach helps you to make investment decisions and coordinate a release schedule that serves all of your products.
With a clear understanding of the higher level goals and initiatives, you can now create a strategic product plan that communicates where each product is headed. Research your competitors, revisit your customer personas, and update your specific product's business model to show how your product will continue to be a success.
Now that you have clarity at every level, you can build a visual product roadmap that connects strategy with implementation, prioritizing the most important features to make your plan a reality. But how do you know what features are the most important?
Well, if you do the work above, this is now a lot easier. You should prioritize the features that best align to your strategic goals and initiatives. And even when brilliant new ideas are suggested, you can allow your strategy to arbitrate between what is included on your roadmap and what is not. Allow your strategy to say yes or no. It can be hard work to put strategy first, and it takes grit to reach internal agreement, but it pays off in every possible way when you do.
In the roadmap above, you see releases with the features that they include mapped to the strategic goals for the product.
Your strategic plan serves as a framework to guide your everyday decisions, keeping you focused on what matters most. If you are new to strategic planning, engage with executive and product leadership early in the process and invest the upfront effort to gain organizational alignment. This will empower you to build more successful and meaningful products and ensure the team is happy doing it.