by Marlon Davis
In product management, roadmapping is a crucial activity serving multiple important purposes. The most significant is aligning teams and stakeholders around the company's execution strategy for targeted market opportunities. However, many companies struggle to connect their product roadmap investments to measurable ROI. This disconnect often leads to disappointed executives, frustrated product teams, skeptical board members, and organizations failing to achieve strategic objectives.
The root of this problem often lies in misaligned expectations regarding where ROI should be assessed and how roadmaps should be structured to reflect both strategic and tactical priorities. This article will explore how elevating ROI analysis from feature-level to market opportunity evaluation can transform roadmapping processes.
Case Study: ACME
During a discovery call with a prospective client, ACME Inc. (a B2B enterprise software company), sought assistance with their roadmapping process. The company was facing several critical issues:
Lack of a robust ROI framework
Weak financial projections and analysis
Inadequate alignment of roadmap features to financial targets
ACME Inc.'s primary challenge was to invest in the most impactful roadmap activities that would yield the best results. While initially identified as the main issue, tying ROI to the roadmap was only part of a larger problem. Further investigation revealed additional obstacles hindering the roadmapping effort.
The most significant challenge was the misplaced expectation of ROI at the feature level. This misalignment in expectations was stymying ACME Inc.'s roadmapping efforts and preventing them from achieving their strategic objectives.
ROI Analysis Should be Performed for Market Opportunities—Not Features
A frequent mistake is evaluating ROI at the feature level. This approach assumes that each feature—treated like an individual product—can have a distinct, quantifiable impact on revenue, which is rarely feasible for the Product team to successfully execute. Features are often interdependent and contribute to value only as part of a larger system.
Evaluating ROI for a specific product feature is challenging due to the following factors:
1) Time Horizon Mismatch: Accurate ROI requires considering long-term development costs and revenue, not just short-term projections.
2) Lack of Granular Sales Data: Without selling features as separate SKUs, it's difficult to attribute revenue to individual features.
3) Incomplete Cost Capture: GTM and support costs are hard to isolate at the feature level.
During my nearly 8-year tenure as a product manager and director at a multinational company, the strategic planning process was highly disciplined. It incorporated rigorous ROI analysis with multi-year projections to assess the return on capital. I innovated the ROI process by targeting a major market opportunity with a long-term timeline. This approach incorporated development costs for multiple releases, preventing skewed ROI analyses typically seen when evaluating individual releases or features. The improved method addressed two common issues: insufficient revenue timelines and the recursive reevaluation of market opportunity returns with each commercial release (not to be confused with development releases).
85% of leadership teams spend less than one hour per month on strategy, and 50 percent spend no time at all on strategy, according to a study by David Norton and Robert Kaplan authors of "The Balanced Scorecard." ROI assessment is most effective when conducted at the opportunity level during strategic planning. This involves evaluating potential revenue from market opportunities (e.g., new market entries or segment expansions) rather than individual features. This approach:
Aligns investments with long-term company goals.
Removes unrealistic revenue expectations from feature prioritization.
Includes all costs to capture the market opportunity (e.g. Product development, GTM)
Enables product teams to focus on delivering user value.
If ACME, Inc. decoupled revenue assessment from feature-level decisions, their product teams could prioritize initiatives that improve user productivity and address critical challenges. This shift would reduce the frustration being expressed by the team to my contact and ensure their roadmaps reflect strategic priorities.
Evaluate and Prioritize Initiatives for Maximizing User Productivity Impact for 12 to 18-month roadmaps
The market opportunity timelines are categorized into three horizons: Horizon 1 (12 to 18 months), Horizon 2 (24 to 36 months), and Horizon 3 (beyond 60 months).
Horizon 1 represents immediate market opportunities and typically focuses on incremental improvements to existing products, such as new integrations. For these opportunities, an ROI evaluation should already be in place for ACME, Inc.
Horizon 2 involves expanding into adjacent markets, representing medium-term opportunities.
Horizon 3 focuses on transformative innovations like AI-driven features, representing long-term and potentially disruptive opportunities. ROI analyses should be conducted on these Horizon 3 opportunities to assess their potential impact and feasibility.
61% of executives acknowledged that their firms often struggle to bridge the gap between strategy formulation and execution, according to an article sponsored by the Project Management Institute (PMI).This framework allows for a structured approach to strategic planning, balancing short-term improvements with long-term innovation. It helps prioritize resources and align product development with evolving market opportunities across different time frames.
For roadmap construction in support of a Horizon 1 opportunity, the Product Management team is responsible for identifying and prioritizing initiatives to develop features that will have the highest impact on outcomes for user productivity and buyer adoption and retention. This process is based on their understanding of user workflows and issues, as well as their overall connection to buyer needs and their "grocery list" of solutions-to-issues sought when shopping for an enterprise solution.
The roadmap action item in the example below has a sample objective of reducing negative outcomes tied to the sales process, specifically those rooted in missing or weak product features. To improve the sales win ratio, the product team is addressing the top missing or weak product features cited as reasons for losing potential deals within the targeted Ideal Customer Profile (ICP). This roadmap initiative will be considered successful when the currently identified top features are no longer listed as reasons in the sales lost opportunities data.
Why isn't the Product Management team conducting an ROI analysis for markets we are already present in? The reason is that ROI analysis for market opportunities is typically performed prior to market entry. Once we are established in a market, our focus shifts. At this point, as shown in the example in the image above, we are primarily concerned with identifying the right features to increase buyer adoption and facilitate further market penetration for prospects who align with our ICP.
The Root of the ROI Problem Lies in Strategic Planning
The 'move fast and break things' mentality, while valuable in product development, can be detrimental when applied to company strategy. Strategic planning requires deliberate, well-informed decisions to sustain growth and resilience.
Many companies misapply this approach as a substitute for serious strategic planning, claiming it provides better information. However, this often leads to a vague 'Act-Measure-Learn Something in Context of Something' approach, lacking the focus and rigor necessary for effective strategic planning.
To address this issue, companies like ACME Inc. need to revise their strategic planning process. This revision should provide essential guidance for both overall strategy and specific action items, such as roadmap development by the product management team.
Benefits of structured strategic planning include:
Improved Strategic Direction: A clear framework for developing and refining company-wide strategies.
Enhanced Roadmap Development: Product management teams can create more aligned and effective product roadmaps.
Cohesive Action Items: Better coordination between high-level strategy and specific tactical initiatives.
Clearer Decision-Making: A structured approach provides a foundation for more informed and consistent decisions across the organization.
This structured approach will help bridge the gap between high-level strategic objectives and day-to-day operational activities, ensuring better alignment and more effective execution throughout the company.
A Recipe for Strategic Aligning from Company Goals to Roadmap Development
To align roadmaps with strategic goals, follow this visualization:
Market Opportunities & Revenue Impact: Evaluate and prioritize opportunities based on potential revenue and strategic value.
Company Strategies & Goals: Define overarching strategies to pursue identified opportunities.
Product Strategies & Objectives: Develop product strategies that directly support company goals.
Product Roadmap: Outline initiatives and features that execute on product strategies and objectives.
Conclusion
Shifting ROI assessment to the opportunity level and aligning product roadmaps with top-down strategies transforms the roadmapping process, driving both user value and business success. This approach empowers product teams to focus on what truly matters: delivering impactful solutions that meet user needs while advancing strategic goals.
By adopting this strategic alignment:
Organizations can make more informed decisions about resource allocation
Product teams can prioritize initiatives that truly move the needle
Companies can better navigate the complex landscape of market opportunities
Ultimately, this shift in perspective from feature-level ROI to opportunity-based assessment creates a powerful synergy between product development and business strategy. It enables companies to:
Respond more effectively to market dynamics
Accelerate innovation in targeted areas
Maximize the impact of their product investments
For companies like ACME Inc., embracing this approach means not just improving their roadmapping process, but fundamentally transforming how they create and capture value in the market. By aligning every feature, every initiative, and every product decision with overarching strategic goals, organizations can unlock new levels of growth and competitive advantage.
The future belongs to companies that can seamlessly connect their strategic vision to tactical execution. By rethinking ROI and reimagining the roadmapping process, businesses can position themselves at the forefront of their industries, driving innovation and delivering exceptional value to their customers.
Key Takeaways and Actionable Steps
Evaluate ROI at the Opportunity Level: Assess revenue potential during strategic planning, not at the feature level.
Focus on User Productivity: Prioritize initiatives that enhance user productivity and address critical challenges.
Align Top-Down and Bottom-Up Inputs: Balance strategic priorities with user insights to create cohesive roadmaps.
Adopt a Holistic View of Costs: Consider all costs—not just development—in ROI calculations.
Contact Froogel Product Manager for help with your company's strategic planning and product management team's execution and accelerate your company's execution.
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