As a CEO, you've likely experienced the frustration of misaligned teams, short-sighted roadmaps, and conflicting priorities within your organization. Perhaps you've wondered why your company struggles to execute consistently to take advantage of current market opportunities or those presented by quick changes in the market. These challenges aren't just minor setbacks, they are a drag on company growth and as such symptoms of a deeper issue that plagues many businesses today -- the absence of a robust, long-term strategic business plan.
Imagine leading your company with clarity and confidence, where each department moves in harmony, all rowing in the same direction toward the shared short-term and long-term objectives for the company. Picture quarterly board meetings that are much less stress-free and showcase impressive year-over-year growth. This isn't a pipe dream—it's the potential for your company and the reality for organizations that prioritize comprehensive strategic planning as essential to success.
Through my firsthand experiences as both a Head of Product and a Fractional CPO, I've witnessed the profound impact that a well-developed strategic business plan can have on Product Management success. The key to this success lies in having a structured framework to guide the team and organization through the development process. This framework makes all the difference in creating a robust, strategic business plan that truly drives results.
In this article, we'll delve into:
The critical role of strategic business planning to the Success of Product Management
How to overcome the inertia of the current operating procedures
Practical steps required for the framework to develop and implement a robust, long-term strategic business plan
By addressing these crucial aspects, you'll be equipped to lead your organization towards consistent growth, improved execution, and a stronger market position. Let's explore how you can turn this vision into reality for your company.
The Critical Role of Strategic Planning in Product Management
Strategic business planning is a brick in the bedrock for product management excellence, as a springboard to elevate Product management strategy and execution to higher levels of performance. Visionary senior executives who’ve embraced its power have been the beneficiaries of high year-over-year growth, stressless quarter business reviews with the Board, and more leeway in decision-making decisions that involve Board buy-in.
By prioritizing comprehensive strategic planning, companies not only chart a clear course for their product development but also foster and resource an environment ripe for breakthrough innovations which will be important sustained growth by taking advantage of other emerging and disruptive market opportunities.
Some may argue, "No plan survives first contact with the enemy," a quote attributed to Helmuth von Moltke, a 19th-century German military strategist and field marshal. However, this statement is often misunderstood and used to dismiss the importance of strategic planning. In truth, as Benjamin Franklin wisely noted, "Failing to plan is planning to fail." In reality, the exercise of strategic planning forces leaders to think through and analyze potential scenarios, ultimately equipping them with the agility and flexibility needed to navigate unexpected challenges effectively.
Overcoming Resistance to Strategic Planning
Despite its importance, many organizations shy away from effective strategic planning due to perceived past failures in planning efforts, complacency with current methods, time constraints, a perceived lack of necessity, or market unpredictability. Here are some common statements expressed regarding strategic planning. See if you can find any familiar sounding statements from the list below:
“Our last strategic planning process didn't go anywhere. We’ve only referenced it once.”
"We've been doing fine this way for years."
“We already know what to do?”
"We have too many immediate needs on our plate already."
“We’ve already done it once.”
"The market is too unpredictable for long-term planning."
“Markets change so fast, its hardly worth the effort.”
Did you recognize one or more of these statements being echoed in your company’s conference rooms or videoconferencing calls? How Many Reasons Have You Heard? While many of these excuses apply to the strategic business planning process itself, the last two, which reference the dynamic nature of markets, warrant further exploration.
Markets Are Too Dynamic
While markets do evolve, drastic changes requiring immediate business model shifts are rare. In my 25 years of experience, three events stand out as exogenous, black swan occurrences that necessitated substantial alterations to business models: The Dotcom Crash, The Global Financial Crisis, and the COVID-19 pandemic. I recall collaborating with my senior leadership colleagues to adapt our strategies during the early weeks of the COVID-19 pandemic. We modified several approaches to support our customers' economic situations, aiming to help both them and our organization navigate through the crisis.
The speed and urgency with which market trends reshape industries often manifest as gradual, slow-motion transformations that have been simmering in our peripheral vision for some time. Mobile technology, cloud computing, and artificial intelligence have evolved into viable commercial solutions within the enterprise stack, with cloud technology spearheading this revolution for over two decades. I converted my first on-premise product portfolio to cloud-based solutions in 2010, with some software companies only now beginning this transition, driven by the need to follow their customer base that is migrating to alternative cloud solutions. These technological innovations have fundamentally altered the business models of enterprise software companies, particularly in areas such as service delivery, accessibility, customer support, and usage patterns. The once-emerging technologies have now become integral components of modern business operations, driving efficiency, scalability, and competitive advantage across various sectors.
A 2022 Gartner survey revealed that 41% of customers had shifted their IT budgets to public cloud, with expectations for that percentage to grow to 51% by 2025.It's worth noting that customer IT budgets will never be 100% cloud-based due to various factors. Some of these reasons include concerns over data security, the desire to maintain infrastructure control, compliance requirements, and the need for highly customized applications. Sectors like government, healthcare, and some finance industries often have specific concerns that prevent full cloud adoption.
For the addressable market that can and will continue to adopt enterprise solutions based on cloud, mobile, and AI technologies, companies that were slow to plan for these market shifts now find themselves in an urgent predicament—one they've unwittingly contributed to creating. This situation now places an extraordinary burden on their resources and capital as they attempt to implement changes at breakneck speed. These organizations face the daunting task of rapidly modernizing their infrastructure, reskilling their workforce, and overhauling their business models to hold on to their customer base and acquire new ones.
Proactive strategic planning allows you to anticipate market growth opportunities and enhance customer retention without anxiety and stress from watching your customer base consider alternatives in the market. In the late stages of technology adoption, customers no longer seek first-generation products that require patience, forgiveness, or frustrating phone calls. They expect mature, reliable platforms built on well-established technological foundations that meet their needs efficiently.
The Product Symptoms of Weak Company Strategy
Do you recognize any of these traits listed below as being present in your company?
Myopathy - The presence of only 12 to 18-month roadmaps
Misapplication of Revenue - Product roadmaps populated by user features with revenue estimates and payback analysis
Incomplete Planning - Compressed 12 to 18-month product roadmaps that represent multiple market opportunities
Missing Market Discovery - Conflicting Ideal Customer Profile definitions at the lower levels of execution
Insufficient GTM - Sales teams are selling into identified new market opportunities without resources and support
These traits are symptoms of inefficient and diminished effectiveness of the company’s execution that may be rooted in a weak company strategy.
The presence of only 12-to-18 months roadmaps: Product leaders, both at senior and individual contributor levels, often create roadmaps extending 3 years or more to provide long-term product direction for their companies. However, this practice can be problematic when the Senior Leadership Team (SLT) hasn't collectively established a unified vision for the same timeframe. This misalignment can lead to departments pursuing divergent agendas based on assumed company goals.
In contrast, the SLT typically refreshes company goals on a shorter, time-boxed cycle of 12 to 18 months. This discrepancy between long-term product roadmaps and shorter-term company goal-setting can create strategic inconsistencies and potential inefficiencies in resource allocation.
Product roadmaps populated by user features with revenue estimates and payback analyses: Products and thus purchasing metrics such as customer adoption and retention exist to and align with buyers and markets. Product features align with user usage adoption and activity. Feature success can only be evaluated by task productivity improvements in time, task completion, and the quality of output.
Compressed 12 to 18-month product roadmaps that represent multiple market opportunities: The roadmap ambitiously incorporated features for multiple market opportunities beyond the initial 12-month scope. This approach, while well-intentioned, resulted in a compressed timeline that lacked sufficient research and planning for long-term initiatives
Conflicting Ideal Customer Profile definitions at the lower levels of execution: Sales, Marketing, and Product teams have conflicting views on the Ideal Customer Profiles for new market opportunities identified by the Senior Leadership Team (SLT). This disagreement leads to finger-pointing among directors and subordinates. A potential source to address and immediately eliminate is the strategic plan. Many times, inadequate strategic planning for these new market opportunities will hinder efficient and effective execution across the entire company.
Sales teams are selling into identified new market opportunities without resources and support: Sales teams are sent into new market opportunities without adequate resources and support. This approach is detrimental to the Sales team, as they're essentially conducting scouting missions disguised as full-scale invasions. The team becomes frustrated with Product and the Senior Leadership Team (SLT), feeling ill-equipped to secure a foothold in these new markets. Their frustration is justified when the strategic planning for these opportunities was left incomplete, limited to identifying goals without developing comprehensive departmental strategies, objectives, and action plans to successfully enter these markets.
The Remedy: One Pant Leg at a Time
If you recognized one or more of the symptoms listed above, your company has it – your company has the disease and the only cure isn’t more cowbell, but better strategic planning. A 2023 Product Focus survey revealed several key challenges facing product managers today. Nearly a third of product management respondents identified weak or missing company strategy as one of their biggest obstacles to success. This aligns with findings from a 2022 ProductPlan survey, where product managers' top wish for the new year was a clearer purpose and company strategy, echoing the previous year's findings.
Product leaders often respond to these cries from their product teams to strategic gaps with a commendable self-starter approach, attempting to fill the void by inferring company strategy from current activities. While admirable, this effort falls short of addressing the core issue: the absence of proper Senior Leadership Team (SLT) development of company goals and strategy. Without this guidance, product teams lack the necessary framework for developing aligned product strategies and making informed resource requests. This gap hinders the creation of effective action plans to support the achievement of company objectives for targeted market opportunities.
I have experienced these challenges firsthand, leading Product teams through repeated rejections of bottom-up opportunities due to a lack of top-down strategic guidance. This approach inevitably led to frustration and wasted effort. Learning from these experiences, I've since successfully avoided such pitfalls by influencing the Senior Leadership Team (SLT) and advocating for robust strategic business planning. Often, I've found that engaging an impartial third-party facilitator (or newly arrived SLT member) for this process yields the best results, ensuring a balanced and objective approach to strategy development.
Setting Out to Perform Strategic Planning
The 3 Horizons Framework for strategic business planning revolutionized my approach to positioning product teams for success, starting at the company's top leadership level. Since my introduction to this framework, I've applied it—either in its entirety or in parts—to help companies address weak or nonexistent strategic planning issues. This tool has proven invaluable in aligning product development with long-term business objectives and ensuring a more cohesive organizational strategy.
Establish a clear framework with defined time horizons and essential components
Identify and assess top market opportunities for customer acquisition and retention
Develop company goals and strategies across short-term (12 to 18 months), medium-term (24 to 36 months), and long-term horizons (beyond 60 months)
Incorporate vision and mission statements to guide opportunity evaluation and strategy development
Focus on key market opportunity priorities, limiting their number for optimal resource allocation
Categorize opportunity priorities as critical, important, or desirable
Set company goals and key performance indicators (KPIs) as a senior leadership team
Assign department heads to develop strategies and action plans aligned with company objectives
Schedule regular KPI reviews to assess progress towards company goals and strategies
Conduct senior leadership team meetings to adjust the plan based on KPI performance and market changes
These guidelines form the foundation of effective strategic planning. However, two important points should be emphasized. This is not a product strategy planning tool, but a company-level framework for generating strategic goals and objectives. These outputs serve as crucial inputs for departmental strategy development, including Product Management. There are additional elements, not mentioned here, that are critical for the success of this strategic planning activity. For instance, clear and frequent communication of the strategy to the company and key stakeholders is paramount.
These clarifications position the framework within the organizational context and acknowledge additional components of strategic planning. By following these rules and incorporating other key practices, organizations can create a comprehensive, adaptable strategic plan that drives growth in a dynamic business environment.
Conclusion
In conclusion, the critical role of strategic business planning in product management cannot be overstated. A well-developed, long-term strategy enables organizations to navigate dynamic markets, foster innovation, and achieve sustained growth. By addressing the common excuses for avoiding strategic planning and recognizing its importance as a foundation for success, companies can overcome inefficiencies and align their teams toward shared objectives. Strategic planning not only provides a roadmap for product development but also ensures that all departments work cohesively to capitalize on emerging opportunities and mitigate risks. This proactive approach allows organizations to anticipate market shifts, enhance customer retention, and maintain a competitive edge without the stress of reactive decision-making.
Ultimately, the absence of robust strategic planning leads to symptoms such as short-term roadmaps, conflicting priorities, and misaligned execution across teams. To remedy these challenges, senior leadership must prioritize the development of comprehensive strategies that encompass clear goals, time horizons, and actionable plans. Engaging impartial facilitators and adhering to structured frameworks can further enhance the process, ensuring balanced and effective outcomes.
Identifying strategic planning as a source for some product management challenges is not meant to excuse deficiencies within the product management organization. Rather, it points to a potential root cause that, if addressed, would benefit not only product management but all other departments as well. By fostering a culture of strategic foresight and collaboration, organizations can empower their product teams to deliver mature, reliable solutions that meet customer needs efficiently while driving long-term success in an ever-evolving market landscape.
Contact Froogel Product Manager for help with your product management team's execution, and thereby accelerate your company's execution.
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