Rethinking Product Strategy
Old-School Product Strategy Can Bog You Down
It’s surprising to see how product strategy can trip us up. It seems like every part of the topic should help us, not lead us astray.
Product Strategy Shortcomings
The problem is that many managers see product strategy as the game plan for moving forward with a single-product. Or they view it as the roadmap that displays separate actions for several unrelated products. With this thinking, Product Strategies and Roadmaps, at their most, are Gantt charts rolled up into a single view. Still, each chart reveals changes or advancements to only one product. This thinking is excellent if you’re an entrepreneur or you work in a start-up. But the mindset leads you in the wrong direction if you work in a company with many products.
Few companies produce just one product. Most companies have product lines that serve several customer groups with multiple products or offerings. A single-product orientation falls flat when a company has a line of products. The challenge arises because product line strategies and road maps differ from those tied to individual products.
Product versus Product Line
OK, I know this may seem obvious, but please read on. My message is important.
Don’t limit your potential by applying Single-Product Strategy thinking to Product Lines.
A single-product strategy works to advance a product’s features and quality. It does this while seeking to manage price and control costs. A product strategy also lays out a new product by detailing features, customer needs, and work plans. Plus, it may outline each product’s branding and positioning. These topics are crucial.
But a product line strategy goes further. It seeks more significant gains across multiple products and multiple market segments. It’s because product lines have two unique advantages over a single-product. They gain from leverage, and they gain from cross-market synergy. Most important, individually these gains are notable, but together the gains are substantial. A multi-product approach that realizes both leverage and synergy is powerful. It blows away competitors who are stuck with single product strategies and roadmaps.
Single Product Stickiness
Going from single-product to product line thinking is a significant change. Management teams may not realize their company is stuck in single-product thinking.
Contributors might even revel in the single-product approach. For example, you may hear managers praise the benefits of creating a roadmap. That’s the single-product kind. Having a roadmap, they say, shows substantial progress compared to not having it. Sure, but today’s roadmaps limit the progress to single-product thinking. They lack the parts and inclusions needed to realize gains from entire product lines and their strategies.
The biggest product-related challenge for mid-size and large companies is transitioning from a restrictive single-product paradigm to an expansive multi-product paradigm.
If you work with product lines, you likely use some degree of product line thinking. It would be hard to avoid. However, the question is whether your work, your decisions, and your information systems drive the most from an intelligent multi-product approach. Does everything in your organization work in unison to drive the most from a product line. Or, is your company stuck in the single product world?
Good product line management demands a deep understanding of product line strategies. Plus, it needs a framework to drive the desired strategy. This framework helps teams to foresee and respond to market and technology changes. And it sets up ongoing work to gain cross-organizational alignment to boost the product line.
Product Line Uniqueness
A product line team’s primary job is to gain the knowledge and skills to carry out a brilliant strategy. Those who expect to learn on the fly soon discover they’re also late to the game. Unfortunately, late strategy moves tend not to be great. Such late moves happen because single-product thinking doesn’t address a complete set of thought-worlds, nor the strategy parts that affect superior performance.
Product lines enable synergistic gains across products. A single product strategy can’t coordinate such cross-product interplay.
So what makes a product line different compared to a single-product? It’s the product line’s synergistic gains. Each product in a line can affect the others. Plus, other parts and forces drive significant gains not realized through single-product thinking. Managers don’t account for synergy when they’re stuck in the single-product mode.
Product Line Velocity, not Product Speed
A single-product strategy strives to couple development speed with satisfying a set of customer needs. The approach goes further for product line strategies. It seeks to create and regenerate synergy across products. This difference is huge and enormously impactful.
Product line strategies focus on one mission that combines three orientations. The mission is to improve overall customer satisfaction, build stronger cash flow, and block and leapfrog competitors. These three orientations play out through a critical metric referred to as the product line’s velocity.
Think of the Product Line Velocity as a vector in three dimensions (x= customer satisfaction, y=cash flow, and z=competitive strength). A product line team’s mission is to continually extend this vector.
Product Line Leverage and Synergy
You’ll find strategies and roadmaps look different for product lines compared to their single-product children.
The core of a product line strategy, what I call the Strategy-Essence, has three parts. The first is at least one platform-lever. I know the term is wonky, but I use it to distinguish levers internal to product lines, not the external platforms that shape whole business models and involve third parties. Single-product thinking doesn’t enable platform leverage.
In systems thinking, the three strategy elements that comprise the product line’s strategy essence are also the system parts having the most impact on the product line system’s performance (velocity.)
Platform-levers add value in two ways. First, platform-levers help companies develop and add new offerings faster than they gain otherwise. The second advantage is that platform-levers deliver greater attribute performance at a lower cost.
Companies must create an intense focus on a platform-lever to make it work. They need deliberate structures, roles, and processes to drive each platform lever’s use and value. Please recognize how changing a platform lever is a significant pivot to a product line’s strategy.
The second part of the product line Strategy-Essence is Attribute-Positioning across market segments. This strategy ingredient is the deliberate match of product attributes to customer needs specific to a coordinated division of markets.
While many people think of positioning as a marketing job that seeks to influence and engage customers, Attribute-Positioning is different. It’s directed at the resulting products. It’s about creating, engineering, or otherwise forming the attributes and features delivered in each product. You’ll find good Attribute-Positioning starts with how the product line team segments their market.
When you use a single-product strategy, you miss the gains from intelligent market segmentation. That’s because segmentation sets up how well you satisfy customers, plus your ability to beat the competition. It involves clustering customer needs and honing in on Jobs-to-be-Done as sets, not just a one-off declaration.
The goal of intelligent segmentation is to set up targets for multiple products, not just one. It’s to engineer product attributes for many offerings across many segments. Most important, it’s doing this job deliberately to maximize the product line’s velocity.
The third part of the Strategy-Essence is aligning the product line with other functions. These non-product areas include functions like sales, supply chain, and information systems. When a product line strategy conflicts with other internal strategies, synergy falls short.
Approaches like intrapreneurship and lean startups purposely avoid alignment issues. Such end-runs might be good for innovation, but the results aren’t always the best for the business. Good product line strategies work differently.
Those who manage entire product lines will aggressively seek issues caused by misalignment with other functions. However, what’s most important is that smart managers tackle these issues and deal with them directly. The choice is to redirect the functions, redirect the product line, or accept sub-optimal performance.
Cross-organizational alignment specific to a product line, what I refer to as Chain-link alignment, is rooted in business strategy. A product line strategy is just one link in a full business chain-link. But it’s a critical link.
Misalignment of internal strategies is a business issue, not a product line or functional issue. But if a product line team wishes to maximize their product line’s velocity, they must also be adept at influencing organizational change to bring about alignment.
One-off product development and a single-product strategy won’t tackle organizational change. Instead, single-product thinking does everything possible to avoid organizational challenges.
You’ll find old-school single-product proponents push the notion of the ambidextrous organization—being able to carry out a core business while enabling innovations to avoid misalignment issues. The alignment issues often get tagged as bad, bureaucratic burdens. The problem with this logic is that some bureaucratic elements, such as processes and standards, enable cross-product and cross-market synergies in product line strategy. These are bureaucratic benefits, not burdens.
Strategy Moves and Pivots
When platform-levers or market segments change, the product line strategy must also change. Plus, you’ll also see that cross-functional alignment must change.
To underscore the point, consider when a company tackles digital transformation. The change affects each function’s strategy. And to benefit the most, you’ll find that product line strategies must also change. The key is to understand how alignment and product line strategy work together. Chain-link alignment is vital to a product line’s success.
The real boost to product lines is when the three parts of the Strategy-Essence work in unison. That’s what you’d like to achieve, but it’s not as easy as it sounds. Some parts will fall out of sync. It might be a platform-lever that matures and provides little gain. Or it may be attributes that fall behind competitive offerings. Over time, things change, and the changes are not always for the best.
Maximizing Product Line Velocity
You’ll see changes for the worse show up in a decreasing product line velocity. The product line team’s job is to foresee the challenges and opportunities and translate them into velocity gains. It’s also their job to make sure innovations move forward to keep the velocity ever-increasing. Teams carry out this job through intelligent strategy moves and major pivots.
Unfortunately, many established businesses lack an ability to create and carry out desirable strategic moves. This shortcoming can turn fatal when the firm is stuck in the single-product strategy mode.
Instilling Product Line Thinking
My call to action is for managers working with product lines to go beyond single-product strategies. Product line plurality offers much more than a single-product focus. It takes product management and innovation to a higher level. Your challenge, though, is getting there. The journey demands new knowledge and new thinking, and it must involve your team and your organization.
Don’t expect to keep customers satisfied and beat the competition by hanging onto a single-product view in a product line world. Smart product line management demands much more.
Learn More and Take Action
Understanding the difference between a product and a product line strategy is vital to a business’s health. The key is stepping up to the multi-product view and purposely exploiting the unique gains from leverage and synergy. Knowing this is not enough. An entire organization must embrace it.
Please encourage others in your organization, not just those in marketing or technology, to learn the importance of product lines and their strategies. But do this with an eye toward moving your business forward.
Here are three short online courses to help you and your colleagues learn the topic and set up the actions to improve your product lines’ performance.