Understanding Product Line Strategy

by Paul O’Connor

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In my book and workshops, I lay out a strong framework for product line strategies.  I complement this with an easily understood lexicon. Together, the framework and lexicon are important to gaining greater impact from product lines. And they’re not just for product line teams. Let me explain why.

Product line success in large companies demands many functions to work together. It’s not just the product line team’s work that matters. It’s also the work by sales, manufacturing, and supply chain. Problems arise when functions separate from the product line don’t understand the game plan fully. It causes misalignment of work and decisions. It causes conflicting priorities, and it results in lost opportunity.

Many top managers don’t recognize how communication about product line strategy affects business performance. When communication is poor, it’s a serious problem.

Adept Group research, unfortunately, suggests poorly communicated product line strategy is common. Our findings fall in line with two separate Harvard studies[i]. The Harvard studies show how less than 10 percent and not over 30% of managers understand their business strategy. Because product lines are a major part of a business, the same poor understanding cascades to product lines.

Our research on product lines examined 20 companies. The goal was to find out how clarity of product line strategy affects work. We interviewed product line managers and contributors about their product lines. It turns out strategy clarity is not as sharp as people think. Both product line managers and contributors within only three companies thought strategy was well-understood. Managers described their strategies similarly within each of these companies.

A Major Problem
The Adept study is a small and qualitative assessment. Confirmation demands an empirical look across a larger sample.[ii] But the findings are noteworthy. Poorly understood product line strategy can cause significant harm. It undercuts initiatives. It slows down work. And it lessens the delivery of customer benefits.

Ideally, product line strategies should guide people to work collaboratively. And strategies should lead one function to boost the impact from others.

The randomness across strategy descriptions in the Adept study underscores the issue. Without a common framework, managers create discussion points for themselves. Unfortunately, they do it in ways that differ from how others view that same strategy. It hurts communication and complicates execution. Many contributors recognize the confusion and revert to instructions from their bosses. Their philosophy is “I do what the boss tells me to do. Strategy is her responsibility.”

Keeping your nose to the grindstone is admirable. But in fast-paced product line, it’s not enough. Good product line strategies must have good execution. Work, project plans, and roadmaps should not diverge from strategy. Or, if the work needs to change, strategy might also change. Still, managers state little concern about how their work aligns with a product line strategy. And even less recognize how their work can increase a strategy’s impact.

Work Prioritization
Consider how strategy should influence work prioritization. Product lines need support from sales, supply chain, information systems, and manufacturing. Problems arise when these functions do not embrace the importance of the product line work compared to other work. Each function uses their own thoughts to rank their work. This can, and often does, affect a product line negatively. When work decisions involve multiple functions and multiple product lines, conflicts worsen.

A clear product line strategy communicated in easily understood words is a first step to good execution. Without a means to form strategies and a language to communicate them, product lines fall short of their potential.

The job is to adopt a framework and lexicon specific to product lines strategies and their execution. The key is the framework’s simplicity, yet thoroughness. It must hold up to each product line’s nuances, its actions, and its intent. Plus, the framework must be learnable by all players.

Consider how clarity about the core of a product line strategy is critical. It’s so critical that I gave it a unique name. This is a key part of the lexicon. And it’s a key part of the framework. I refer to a product line strategy core as it’s Strategy-Essence. Creating and communicating a smart Strategy-Essence are the most important tasks for a product line team.

What’s important, though, are the Strategy-Essence’s three parts. Together, the parts explain a strategy’s what and why. Here are the three parts.

  1. Platform-Levers are common factors across products such as design elements, manufacturing, or service methods. There can be much genius in platform-levers in how they enable ‘leverage.’ Leverage plays out through faster development times and lower costs. Poorly understood platform-levers deliver less leverage and less gain to the product line.
  2. Chain-link Alignment is the coordination of all functional strategies that make up a business’ unit’s strategy. Product Line Strategies are just one link in the business unit strategy chain. Ideally, the alignment results are greater than the sum of links. Each boosts the others. Poor alignment negatively impacts a product line’s performance.
  3. Attribute-Positioning is the embodiment of each product’s features within market segments. Coherence and impact of a product line depends on the full set of products and their attributes.

Each part of the Strategy-Essence is important. But it’s more important how the parts relate and boost each other. All managers should understand these critical parts of a Strategy-Essence[iii]. It goes a long way in building clarity.

Fully understanding product line strategy goes beyond it’s Strategy-Essence. Other key concerns include roadmap management, objectives, and metrics. Plus, managers should understand how product lines relate to a business. All of this is teachable.

Learn the Framework and Lexicon

Learning and applying the framework is important. Adept offers several means to help.  Our most helpful is a two-day interactive workshop. You may find more information on the workshop at https://adept-plm.com/ppm-workshops/

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[i] “A mere 7% of employees today fully understand their company’s business strategies and what’s expected of them in order to help achieve company goals.” Robert S. Kaplan and David P. Norton, “The Strategy-Focused Organization,” Harvard Business School Press, 2001

-Harvard Business Review article, “When CEOs Talk Strategy, Is Anyone Listening?” June 2013: 29% of people could state their company’s strategy… 71% could not.

[ii] When to Use Quantitative Methods – https://cirt.gcu.edu/research/developmentresources/research_ready/quantresearch/whentouse

[iii] Product Line Strategy Essence Anytime Webinar – http://adept-plm.com/on-demand-webinar-product-line-strategy-essence/

 

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