Many great ideas and opportunities are never realized. You may have experienced this yourself working on a digital product that never came close to realizing it’s potential. One of the reasons that so many organizations fail at delivering valuable products and services is the lack of a well-defined strategy or the complete absence of a strategy.
Creating a digital product or service is complex. Identifying the right opportunity, selecting where to compete, and solving a problem for customers in a viable, unique, and sustainable way (a.k.a your competitive advantage) are the cornerstones of a successful strategy. If you boil all of this down it’s simple — create value for your audience and as a result you will create value for your business. In an interview, Jeff Bezos phrased it this way, “In the long term, there is never any misalignment between customer interests and shareholder interests.”
Unfortunately, strategy has become a buzzword for many, but it has never been more imperative than it is today.
There is significant confusion today about what strategy is. There is an overwhelming amount of information, fads, and academic resources. Harvard Business School Professor and leader in strategy, Michael Porter delineates the importance of strategy in his work. To summarize: the quest for productivity, quality, and speed have spawned a remarkable number of management tools and techniques. These tools and techniques have incrementally, and almost imperceptibly taken the place of strategy, but they are not strategy.
A strategy rests on making essential choices. To help you and your products be as successful as possible we’ve stripped away the noise. Let’s look at what a great digital strategy needs to include.
What is a digital product strategy?
A great strategy defines the value you will create in a succinct and tangible way; where to focus, why, and what it will take to achieve that value. This empowers your team to focus on the right things and determine how to facilitate the delivery of a great product or service.
Having a strategic foundation provides clarity. It promotes a shared understanding that organizations, business units, and teams must have in place to pursue, and ultimately achieve their goal. Depending on your business goals your strategy may be focused on a single product or it could guide a suite of products that become a cross-connected platform.
A strategic foundation is made up of five core elements: the product or service vision, the challenge that needs to be solved, its current impact, the target audience whom the challenge is being solved for, and the desired future outcome.
To be clear: a plan is not a strategy, which compounds people’s confusion. Plans are made up of tactics that define exactly what we’re going to do, when we’re going to execute them, and what will follow. Essentially, in following this plan and taking these steps, success will be attained moving forward. Plans don’t account for the unknowns, changes, prioritization, or provide a framework for critical decision making. A plan without a strategic foundation gives people a false sense of clarity and security that often leads to failure. When a solution is seen as a quick-fix, without understanding the complexity of the challenge that needs to be solved, failure will often be the result. Understanding the difference between complex things vs. complicated things becomes extremely important. (To learn more about this concept check out the Cynefin framework in this video.)
You will want to have a plan, but know that it will change, probably more than once. A plan needs to be adaptive, and built upon a solid strategic foundation.
Five Core Elements of a Digital Product Strategy
The vision is the long-term overarching goal the company or business unit is aiming to achieve and the reason for creating the product(s). It provides your team with a collective purpose, acting as the product’s true north, facilitating alignment, and effective collaboration.
The importance of vision cannot be overemphasized. You need to provide people with clarity of the big picture goals and how the product will help fulfill that vision. People also want to know how their contributions will make a difference, whether on the product team or working across the organization. A well-articulated vision is also of tantamount importance for people to know what does not require their time, energy and depletes limited resources.
For example, your product vision may be to provide a platform that improves the way people work, unlocking the speed at which they can collaborate.
The second core element is the challenge you’re solving for; providing context for what it will take to realize the long-term vision. By understanding the challenge we can then start to differentiate between symptomatic issues and the root causes.
This allows us to break down the large challenge into smaller manageable, specific, and actionable issues to focus on solving. Notice we’re not trying to solve the issue. We’re making sure we understand the complexity of the challenge. Breaking down a challenge helps to unveil essential insights that will inform the success of the product moving forward.
For example, the challenge you need to solve is subscriber retention. The most immediate opportunity is to address a poor on-boarding experience.
Next, we need to identify and understand the impact of the issues on the business and/or the audience. What is the baseline or current state? This helps to clearly understand (measure or delineate) the current business state and measure the progress as people work towards the intended outcome. Understanding the impact also allows you to highlight qualitative and quantitative metrics to support the business case by using a single variable or a cumulative effect.
For example, the impact of the unmet challenge is the high costs of new subscriber acquisition combined with customer service inquiries averaging a cost $650/user.
The foundation of a successful digital product is understanding the wants and needs of your audience. Whether your users are external or internal, your strategy must define who they are. You may have multiple user types that need to be considered. There is not a single solution that is perfect for everyone. With a full understanding of our audience, it is possible to align the focus of the vision with your intended outcomes.
For example, your ideal customer may be a small businesses with 10+ active users that can realize the full benefits of improving the way their employees work.
The fifth core element of your digital product strategic foundation is identifying the desired outcomes you are hoping to achieve by addressing the issue(s) that make up the larger challenge.
Another way to look at it would be what is the future state or results(s) you want to achieve. How will this feature, product or suite of products address the individual issues? How will this promote long-term potential benefits and enable other outcomes if done correctly? While the vision articulates the big picture goal, outcomes focus on the results of addressing issues in an incremental, measurable way that moves the organization forward. To build that forward momentum we need to understand the first step and take action toward realizing those outcomes. Often, this becomes invaluable in helping to identify an ideal starting point. Ultimately, this will also help to ensure everyone involved is on the same page, having a shared interpretation of success. It allows benchmarks to be established that will measure the progress toward the vision and desired outcomes.
For example, the desired outcome you are aiming for is an increase of 40% in the customer onboarding completion rate and a 25% increase in customer adoption within the first 90 days.
The shift from strategy to execution
Having a strong strategic foundation is imperative. It is essential in providing clarity, team focus, informing better decision making, accelerating the speed of delivery, and team collaboration. Conversely, poor execution of a great idea is as detrimental as not having a strategy at all. Shifting from strategy to effective execution is not an easy process. It requires alignment, excellent ongoing communication, often additional skills, and a culture that supports change. This is where proper planning comes into play. A plan that focuses on deploying the appropriate capabilities, processes, tools, and resources at the right time.
There are significant considerations in leadership, management, and across the entire product development lifecycle (i.e. waterfall, agile or a hybrid model). However, with a solid foundation in place, you’re forging the right path towards success.
As you and the rest of your team works to identify solutions to your prioritized issue(s) you will have the information necessary to ensure you are working on the right things. It enables you to do the right things in the right way.
You can now begin to understand who across your organization will need to be involved to create, execute, and support your product. Essentially defining a clear picture early on of roles and responsibilities.
In exploring each solution you can also start to map out and understand the interdependencies. Interdependencies in this scenario are the relationships between people, processes, and systems that will be necessary to bring your product to market. When business cases are developed prematurely in the process without this insight, things will often fall apart. When executed correctly, this is when business cases can be defined and outline the true potential investment ahead. This information brings potential complexities to the forefront that need to be managed, crucial to your product’s success.
As you define the solution, you can now also start documenting your requirements addressing key business, design and technical considerations essential to delivering your product.
A strong strategic foundation becomes a powerful advantage. It gives you critical insight, galvanizes our efforts into essential focus, and empowers our people to be at their best in any role. The market may decide who the next generation of winners and losers are, but you can take control of your own success, not skip the steps that so many do, and inevitably realize your opportunity.
When done right a strategy articulates the vision, defines the overarching goals you are aiming to achieve, and provides the understanding of the critical outcomes necessary. It provides a collective purpose, acts as the product’s true north, and facilitates effective collaboration across the entire product development lifecycle.
Using this tool you’ll learn:
- What are the 9 elements of a digital product strategy
- Prioritizing your chosen opportunities to maximize value
- Assess what it will take to accomplish your strategic plan
Discover the best course of action for creating a well-defined strategic foundation.
Complete the form below to download the Digital Product Strategy tool:
As a product manager, you are ultimately accountable to the user and responsible for ensuring they have a seamless interaction within your digital product environment. With so many tasks involved in the process of doing so, it can quickly become overwhelming to negotiate through them all unless you have a place to start and understand whether you are solving the right problems. Get clear on the tasks that matter with this user story tool that can help inform whether your digital product is tackling the right issues, right now.
Complete the form below to download the User Stories Tool:
Digital products and services are increasingly becoming a competitive necessity. However, a significant number of businesses today are faced with an unanticipated and very costly challenge.
Evaluating product ownership is a crucial component of your digital product strategy, and many companies don’t own their product at all. You might find this statement provocative or utterly ridiculous. Let me explain the hard reality behind this, and how it impacts organizations attempting to deliver innovative customer experiences, empower their employees and automate processes through the use of technology.
Digital Product Strategy: Defining Ownership
The first question we need to address is what owning your digital product or service means? And secondly, what are the characteristics of ownership?
Wikipedia defines ownership as: “The state or fact of exclusive rights and control over property, which may be an object, land/real estate or intellectual property. Ownership involves multiple rights, collectively referred to as title, which may be separated and held by different parties.”
By legal definition, most organizations would be able to confidently say that they legally own their digital product or service. However, we have to rethink what ownership means in practice, day-to-day in the context of digital products. The difference between the perception of ownership and reality within our organizations is more often than not very different. The following delineation provides a clear illustration of what this looks like.
Ownership is typically seen in terms of control. As the owner you have control of:
- The direction of the digital product or service, its features, and benefits.
- How it integrates into the business offering.
- Designing a best-in-class user experience.
- The business rules that govern the product.
- How data will flow in and out of the product.
- The source-code of the product.
- Third-party systems we will integrate with to enable our product and the business.
These examples of control assume that you are working in a best-case scenario. While we hope for the best it is rarely a true representation of what is really going on within our organizations or the marketplace. It is important to recognize there is already an abundance of factors that live outside of our control.
When building today’s leading products (platforms) it is imperative to ask yourself questions such as:
- What does control look like in a rapidly changing environment?
- How will the business be impacted when you have a change?
- What happens when there is a change in your team members?
- Will a third-party provider influence your ability to adapt or even deliver your product?
- What happens if you need to rapidly scale up?
Each of these examples can have a cascading effect.
Digital Product Strategy: Ramping Up and Moving Forward Quickly
One of many possible situations that exemplifies this cascading dynamic is customer enrollment into a monthly subscription service, providing access to a digital product. Your enrollment immediately grants personalized access, allowing the subscriber to begin using your online services. As part of this, you have carefully designed an onboarding process to ensure your customer has an optimal experience. It also introduces the customer care team that will provide outstanding, ongoing support.
Let’s expand on this scenario. You are the product manager assigned to a new product team and need to quickly get up to speed. Leadership has critical business goals that are dependent upon key milestones being achieved with your product and you need to get to work right away. You immerse yourself immediately into the work. Diving in to learn everything about the product, you request access to all available documentation. You are informed that the team follows an agile approach, and everything has been documented pursuant to best practices inline within the codebase.
Red flag! Who has control? Does everyone across the team and each function of the business have access to the necessary information to achieve the company’s goals? No. It’s locked in a format that is controlled by development. Is this their fault? No.
Next, you decide to schedule meetings with each person who has been working on the product to learn about their insights. Everyone has been working diligently, but you quickly realize that people have a different understanding of the goals and priorities. Consequently, your concerns grow. You know success is rooted in effectively moving forward quickly as one cohesive team.
In this common scenario critical institutional knowledge is locked away with key people, previous decisions are unclear and need to be revisited. In an extreme situation, let’s assume you need to scale the product, but in order to do so you will need to increase the size of your team internally, or with an external partner. The question of ownership begins to proliferate, becoming more complex and further potential complications and impacts begin to accumulate. The business owns the exclusive legal rights but the implications of losing control are escalating quickly.
The costs of losing control of your digital product
In today’s environment, industries are moving rapidly, business models are more complex, technology-driven shifts are common, and competition is getting tougher. And with soaring customer expectations, the impact of losing control needs to not only be understood, but managed as part of your digital product strategy. The impact of losing control can take several forms.
So what is the impact of a situation like the one above? You might find your team:
- Unable to take advantage of a new business opportunity.
- Incurring unintended design or technical debt as the team is working with an incomplete picture of the critical information necessary to do their best work.
- Performance (velocity) is significantly impacted as they spend more time in meetings, starting and stopping work, re-validating user and business requirements, leading to additional rework deliverables.
- Is over budget, unable to meet timelines with the resources that are available, and unable to manage expectations.
- Being confronted with completely re-platforming the product to regain control, and reach key goals that the business is dependent upon achieving.
Many organizations are taking this hit whether they can afford to take it or not. While in the short-term, it may appear as though there are efficiencies being gained. Possibly, reduced timelines for delivery, or the advantages of a larger feature set. Unfortunately, an expedited upcoming release with skipped steps has the potential of reducing the return on investment to zero.
Taking control back and owning your digital product
To regain control, or to never lose it in the first place, we must shift our thinking to embrace end-to-end knowledge management. Established in the ’90s, knowledge management is the process of creating, sharing, using and managing the knowledge and information of an organization in the most effective manner to empower its people, processes, and support decision making.
There are several formats this may take. Each discipline on the product team needs to understand their integral role in ensuring this happens effectively. In many cases, the deliverables need to be an integrated part of a more complete and holistic picture. There may be a story you have to build. That story, and the resulting clarity that is generated from articulating it, can come in a multitude of forms. At a minimum, that story should address:
- The context for what the product is and the problem it solves
- The intended outcome(s) for its users.
- The business rules and why.
- The user flows and stories.
- The technology ecosystem.
- The business interdependencies.
- The functional requirements.
Ask yourself this question. Could I rebuild my product or service with the information I have? How much would it cost? How long would it take to do it again?
A company-wide mindset towards truly owning your digital products and services from the top down, empowers your team, permits you to stay focused on solving problems, and facilitates unearthing new insights and delivery of crucial new solutions. Organizations that are embracing this are more adept at being flexible, can move faster, are able to operate at greater scale, and increase their competitive edge.
Inquiring as to whether or not you genuinely own your product can be an invaluable exercise. It helps you look at your product and your service in a different way. It facilitates changes in the conversation around quality and roles. More importantly, understanding the importance of knowledge management and how it empowers people across the team and the organization should be seen as building strategic advantage for the business. It continues to promote sustainable performance. When we look at it from this perspective we are able to create alignment from leadership through to the product team. We are able to de-risk the business and continue to accelerate consistent improvements. Once this has been established, you can affirm that re-creating the product and service are attainable, then you truly do own it.
Clarity has never been more imperative than it is today. With the impact of digital transformation on your organization’s people, processes, products, and services, clarity is not only essential, but mission critical.
More often than I would like to admit, I meet people with a great idea for a new web, mobile or IoT product but there is a lack of clarity to move forward successfully. Frequently, product teams are tasked with challenges that intersect all functions of an organization without the necessary foundation for success. Consequently, thousands, or even millions of dollars in resources are required for successful delivery.
One primary area of clarity is understanding ‘the job to be done’ and how your digital product or service meets that need. Clay Christensen a professor at Harvard Business School, introduced the concept of Job Theory in the book Competing Against Luck – The Story of Innovation and Customer Choice. The book is focused on successful company practices and their subsequent growth.
Lack of clarity impacts the entire organization
Without clarity, the scope of potential success narrows and our understanding of what is required to reach our goals is compromised. Ultimately, it presents further challenges in assessing how expediently the objectives can be achieved. The lack of clarity impacts individuals, teams, and the organization.
How much time is being spent articulating the vision or value of the digital product or service initiative to people across the organization? Is it being articulated the same way each time or does it change depending on who it’s being presenting to? Is the audience being educated not just about the aspirations, but about the importance of the opportunity or problem working to solve? Are the right people onboard? Can the expectations be managed across the organization, from the C-suit down to the product and supporting teams?
It is essential when creating new and innovative customer experiences (CX) and more refined tools for employee’s, to have clarity. This enables you to make better decisions and navigate the unknown as you proceed from an idea to a strategy, and ultimately, to an effective execution.
It’s a very intriguing question. What is the job to be done by your product or service offering? In my opinion, everyone in an organization; from the CEO to the Product Team needs to be able to answer this question and understand its impact.
What is Jobs Theory and why does it matter?
Job Theory is another case for the importance of taking a customer-centric (aka user-centric or human centered design) approach to your product or service. At the most basic level it’s about understanding the choice your customers make to hire or fire a product. We can then look at why do customers hire your product over another and vise versa. Why are they making that choice? If they choose to fire our product and hire someone else’s product, what are they telling us? Is our product deficient? Is there a better product substitute?
Here’s how Clayton M. Christensen, Taddy Hall, Karen Dillon & David S. Duncan. describe it in their book “Competing Against Luck – The Story of Innovation and Customer Choice.”
“It’s not just another framework or marketing approach, but a powerful lens that has driven breakthrough innovation and transformational growth in some of the world’s most successful organizations—in wildly diverse arenas. Jobs Theory transforms how you define the business you’re in, the size and shape of the market in which you compete, and who your competitors are.”
3 Benefits of Understanding the Job of Your Digital Product
Here are three ways understanding the job of your digital product or service can help you create the clarity and strategic advantage that will lead to greater success.
1) Identify how your product creates value and can be differentiated in the market.
Once you understand the job of a product you can look at the experiences – online and offline – that need to be created to support that product, tackling the job to be done better than anyone else.
This approach can have a profound impact on your work. Let’s assume that you have been asked to lead the redesign of your website as part of your company’s ongoing investment into its digital transformation. You understand that the website needs to be something much more than a brochure; more than just a resource for the different departments, partners, and customers.
The website needs to be a platform, an integrated product that can effectively serve the needs across multiple user journeys. You may have over 80+ stakeholders and 200+ contributors (We’ve actually experienced this). You need to find a shared purpose and vision going forward. The first task is to evaluate the current ecosystem, to understand the current state of things. You need to take inventory, and map people’s needs across the organization. It’s easy to see there are many essential jobs. But are they the job(s) to be done? Or are they the things that have to be done to address the one “job to be done”?
Fast forward, between your stakeholder meetings and the ongoing research being conducted to inform the new strategy and direction of the website, you realize that you’re missing vital insight. You are unable to answer the question “what is the job to be done?”
The insight needs to come from having a deeper understanding of the customer. Engaging them to discuss their challenges, needs and the value drivers of their business. As you get a deeper understanding the job of the website becomes clear.
There is one job to be done by the website; be the companion guide to the customer journey. You present this clarity and are able to quickly tie it back to the businesses vision and key performance indicators. This new shared understanding by your stakeholders and contributors aligns the efforts to focus on the right things and deliver better than anyone else.
This clarity completely changes the conversation and trajectory around customer experience innovation and improving operational performance. You can look at how you engage customers, from the introduction, product customization, onboarding, navigating use, and the necessary support levels in an entirely unique and innovative way. We can look at the interdependencies of delivering on those experiences considering the people, processes, and systems. This allows you to not only focus on the highest level of value creation but to further differentiate.
2) Avoid the Feature Trap
It is easy to understand why product teams get stuck in the “feature trap”. Some organizations measure performance by delivery, as opposed to the value created. Others may be missing key processes or access to customer insight. Often, an organization may not have internal cross-functional teams to evaluate the impact a feature will have on users and the business. There may be scenarios where stakeholders stipulate a hard delivery-date or the product is being overextended to do too many jobs.
This is common when developing and evaluating strategic plans, product roadmaps, helping to prioritize features, and grooming the product backlog. Imagine an advanced manufacturing company that has been stagnant. They have been shifting from feature to feature and struggling to balance priorities with limited resources. The competing priorities and the broad range of value varying stakeholders placed on individual features stretched the product team too thin. With the team being pulled in a multitude of different directions, the team’s time to make progress is depleted, slowing down delivery, and ultimately burning out the product team. By understanding the job to be done for the product your team can find a new way to approach prioritization, permitting the team to focus on continuous improvement and delivery. With a shared understanding you can help to ensure the right capabilities, resources and technologies are implemented in alignment with and to fulfill the strategic priorities.
When we understand the vision and job of our digital product or service we can help to avoid the ‘feature trap’. This allows us to maintain clarity and focus on continuous improvement and delivery that can successfully move the needle.
3) Leverage BIG Data and the shift from transactional to consumption analysis.
Not long ago, BIG Data was the only thing being discussed. It hasn’t gone anywhere but how we think about it has evolved significantly. The focus has shifted from the collection of data to the analysis of data. So how does BIG data inform the job to be done of our product? The focus on analysis has fueled the development of advanced business intelligence that enables better decision making, personalization, and automation. Today the major technology themes continuing to drive this forward momentum are mobility, cloud, and machine learning.
As you work to create better digital products and services there are two types of data we are evaluating; transactional and consumption.
Let me give you a very brief definition of the two types. Functionally, transactional data includes financial and logistical information related to customer inquiry, conversion rate, on-boarding time, number of active users, number hour worked, and application availability (Uptime), etc. Consumption data is focused on behavior, examining how the product or service is being used, identifying patterns, and contextually related outcomes based dimensions of time, location, attitude, etc.
When you understand the job to be done you’ll have a lens to analyze the data to give you invaluable context and deeper insights into the people, and processes that will inform the continued evolution of your product.
Can you think of something similar you have experienced, when a deeper level of clarity could have transformed your work? I’m sure you can. Can you imagine the power of having that clarity and the impact? How the perspective transforms the way you work, your processes and the delivery of more impactful products and services. That is the power of understanding the job of your digital product. It pushes to develop a deeper understanding of our customers.