Why is a strategy important for modern businesses? What are the qualities of a good business strategy?
Just as a good coach begins with a game plan, the first step to setting a modern product team in motion is turning the company’s overall vision into an actionable strategy. Your strategy should focus on a handful of specific goals as you gather information from all levels of your company.
Let’s look at the importance of a modern business strategy and how it will serve as the foundation of your company.
Modern Businesses Start With a Strategy
The product vision and strategy are the bedrock of any successful organization, acting as a shared goal for all involved. Marty Cagan and Chris Jones write that while the company’s vision defines the impact you hope your products will deliver to your customers, your modern business strategy is the roadmap to how you’ll achieve your company’s vision. It sets out each specific team’s objectives and outlines how you plan to reach your business goals. For instance, if your company’s vision is to provide frozen breakfasts that taste like they’re homemade, your strategy will outline the steps required to formulate your product, scale up to mass production, and deliver your breakfasts to grocery stores.
(Shortform note: While Cagan and Jones don’t set specific time constraints on a product strategy, Brian P. Moran, author of The 12 Week Year, advocates a tightly bound schedule—a 12-week plan for achieving specific, measurable goals. When you limit your plan to 12 weeks ahead, says Moran, you have a better chance of accurately predicting the obstacles you’ll face, saving time and energy. Additionally, breaking deadlines and objectives into 12-week periods focuses your team’s concentration and how they structure their work.)
Cagan and Jones argue that a well-crafted product strategy has a narrow focus. It should concentrate on no more than two or three business goals at a time—chasing too many high-priority objectives can hinder progress rather than aid it. To cultivate a strong but adaptable product strategy that stands out from those of your competitors, focus on your customers’ needs—such as what product features will have the most impact—so you can maximize the business value of your team’s efforts. In other words, a narrow strategic focus provides the most return on the work your teams do by targeting no more than a handful of user needs at once.
(Shortform note: Maintaining the narrow focus that Cagan and Jones advocate while long-term goals beckon on the horizon requires you to practice a measure of patience. Used strategically, patience shields your long-term plans from impulsive decisions and short-term setbacks. While keeping your focus on narrow, immediate targets, patience lets you maintain your broader vision without getting sidetracked. Therefore, patience coupled with a narrow product focus gives your business a safety net for sustained development and underscores the compounding power of small, consistent efforts that turn into significant growth and achievement over time.)
Since a good strategy is customer-focused, you have to gather details about your customers and then translate those details into actions. Cagan and Jones describe this as an ongoing process involving rigorous study, learning from customers, and being open to ideas that can come from anywhere. They recommend encouraging contributions from all rungs of the organizational ladder, including junior staff and anyone who interacts with the customers themselves. These details, which include who your customers really are and what value they actually derive from the products, will form the bedrock of all your strategic decisions, which you’ll put into motion via actionable objectives for each of your company’s product teams.
(Shortform note: Though the authors point out that valuable consumer information can come from anywhere in your business, it’s a common mistake to assume that information will be logically quantifiable. In Alchemy, Rory Sutherland argues that people’s irrational motivations cloud how a business understands its customers. Traditional market research often misses the mark, he says, because its assumptions don’t capture the unconscious motives that drive consumer behavior. Therefore, business leaders should go beyond the usual market questionnaires and speak directly to their customers and the team members who interact with them. It’s the only way to untangle the messiness of human behavior to accurately predict customers’ needs.)
