Strategic product management doesn’t have to mean writing a full business case for every product idea that comes through your door.
At a company meeting, the president made this announcement:
“There are so many great ideas at this company! I want you to send them all to product management. Each product idea will get a full evaluation, including a business case and financial forecast for the leadership team to review.”
A developer leaned over to a nearby product manager and said, “Dude! We’re never gonna see you again.”
Strategic Product Management: The best ideas come from direct customer engagement.
As it turns out, idea portals rarely produce valuable ideas, according to a recent survey.
Ideally, strategic product management means product managers and designers interviewing and observing real customers in a real environment without a sales or support objective.
Writing a full business plan on a half-baked idea is a waste.
Instead, a one-page business brief is needed to aid in strategic product management. What’s the idea? Who is it for? What problem does it solve?
At another company, the president complained that they had not introduced a new product in years!
I explained the product managers were so busy with daily operations that they had little time for problem discovery.
I suggested he allocate a small team to discover problems to solve and document them in a one-page business plan for his leadership team to evaluate.
We recommend this simple but effective Product Brief to capture product ideas.
There are many one-page approaches around these days, although most seem focused on one-product businesses rather than multi-product enterprises.
This Product Brief captures the essence of a product idea on one page. A product manager with market and product expertise should be able to complete this document in less than an hour.
The Product Growth Leaders Product Brief
First, name your product.
Start with a product name if you have one. However, for a new idea, don’t choose a name; choose a code name. And not something snazzy.
You don’t want developers and salespeople to fall in love with the code name. Choose a color or an animal. Or body fluids or diseases. (“How’s it going on ‘Zebra?’” “I’m wrapping up ‘Project Mad Cow’ now.”)
Define the market segment.
You must must must focus on a market segment.
Many companies seem incapable of defining a market segment and then are surprised when every deal comes with committed customizations.
You can’t offer 100% of anything if you don’t focus on a market segment or persona.
Find an executive sponsor.
One of the big tricks in getting buy-in for a new product idea is to let it be someone else’s idea. Someone’s pet project. That’s why you want to ensure you have an executive sponsor. Which leader in your organization is your champion? No champion? No buy-in.
Opportunity score helps determine the likelihood of success.
What numerical rating would you give this product idea as a new business opportunity for your company? [See IDEA for one method.]
An opportunity score helps you compare many product proposals and quickly identify the few with the best chance of achieving success.
Identify the personas.
Who buys it? Who uses it?
The buyer persona guides your marketing and sales enablement. The user persona guides your product design. Buyer and user personas are different.
For most business products, those who buy the product are not the ones who use the product.
Determine the problem this product solves.
At their core, today’s products solve a problem. Good products aren’t just a package of random features.
What specific problems do you intend to solve?
Identify the alternatives.
If they can’t buy this product, what other choices do they have?
Competitive offerings? Do nothing? Use another tool, such as a spreadsheet? (I once heard that more text data exists in spreadsheets than in databases!)
Determine the opportunity this product creates for your organization.
Why does solving this problem make sense for your organization? Does it align with your other products and technology? Is it the same buyer that your salespeople already understand?
Understand the product’s vision.
What is your vision for the product? There are many “mad-libs” approaches for a vision statement.
I like the simile: “It’s like <product> for <new application>.” It’s like Airbnb but for dogs. It’s like Yelp for college professors.
Find the advantages of this product.
What makes you think you’ll succeed with this product idea?
Ideally, you will leverage your unique capabilities and institutional expertise.
Determine the risks.
What considerations might impact the product’s success? In so many ways, strategic product management is really risk management.
Consider:
the competitive response
the product impact on your brand and your sales channels
the number of other critical projects that might steal resources
Identify key metrics.
How will you measure success? Is it new revenue? Success is not always about revenue.
Other key metrics include acquiring customers in a new segment, increased customer satisfaction, and expanded usage within your existing customer base.
Anticipated sources of revenues and costs.
A major difference between a brief and a business plan is estimates of sources rather than precise forecasts.
At this stage, you’re not ready for precise estimates. That comes later. And it would be ridiculous to estimate financials until the rest of this document has been reviewed and approved.
Determine how the product will be sold.
You might sell through your existing sales channel, which has one set of cost and revenue impacts, or instead sells through a new channel, which will have different cost and revenue sources.
So how will you sell it? Direct? Distribution? Partners? Online? Each option results in different sources of cost and revenue.
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Strategic Product Management: Overview vs. Detail
One of my friends says the reason executives want product roadmaps is because they can’t read.
Truth is, they probably have too much to read and prefer the overview more than the detail. And after all, a picture tells a thousand words.
Product ideas are like a feature backlog: There are always more ideas than resources.
A product brief provides an overview of an idea.
Don’t commit to an idea lightly.
The outcome of a discussion of the product brief is an agreement that this idea should move forward with the necessary resources committed to do the next level of analysis:
researching the idea with potential customers
calculating the segment size
running the numbers
Moving forward means having product managers take the lead with the understanding that they will need feedback and assistance from finance, development, marketing, sales, and other departments.
Don’t do a full business treatment for a bad idea.
Use the product brief to get buy-in from your leadership to take the product idea one step forward, from idea to plan.
After all, our goal is to turn good ideas into successful products systematically.
Never write another business case until you’ve gotten buy-in from your leadership and investors on the product brief.
