Ring-fencing product managers from the realities of the business is no longer acceptable. It is not enough to task product leaders with vision and strategy remits without tying these closely to the overarching business goals. Additionally it is now imperative for product managers to be more commercially aware. This means that when considering a product strategy, even if it is more visionary than the short or medium term, you will have to take into account the current situation of the business.
Ultimately the success of a product hinges on how well it aligns with the business goals of an organisation. Misalignment can lead to wasted resources, missed opportunities, and ultimately, failure.
Understanding Product Strategy and Business Goals
A product strategy outlines the vision, roadmap, and features of a product or product line, aiming to meet the needs of customers and stakeholders. Business goals, on the other hand, encompass the broader objectives of the company, such as revenue growth, market expansion, and customer satisfaction. The alignment of these two elements ensures that every effort in product development contributes directly to the company’s success.
The Critical Role of Product Managers
For product managers, especially in the startup world, understanding the needs of the business is crucial. Startups often operate with limited runway and need to achieve rapid revenue growth to satisfy venture capitalists (VCs) and the board of directors. Product managers must have a deep understanding of these business imperatives to prioritise features and initiatives that drive immediate and substantial impact. This alignment is not just a nice-to-have but a necessity to secure funding, extend the runway, and ultimately, ensure the survival and growth of the startup.
At Healthily where I was CPO, we often had to not only think of the product vision to excite board members (as well as rallying the troops and inspiring them) but also thought leadership during COVID. This was a unique exercise to make the business relevant to investors. Additionally the short term strategy needed the business to firm up its B2B offering to keep revenue flowing from the core IP.
Steps to Align Product Strategy with Business Goals
1. Define Clear Business Objectives
– Begin with a thorough understanding of your company’s mission, vision, and strategic goals. This will serve as the foundation for your product strategy. Amazon’s mission to be the “Earth’s most customer-centric company” drives its product strategies, from Prime to Alexa, ensuring each product enhances customer experience and loyalty.
2. Involve Stakeholders Early and Often
– Engage key stakeholders from various departments (marketing, sales, finance, customer service) early in the planning process. This ensures that all perspectives are considered and aligned. When working on an AI recruitment tool as a consultant in 2023 I ran workshops across the organisation – from the C-suite, to developers, product managers as well as customers. I shared the consolidated outputs using tools like Miro and Loom to make sure everyone knew how were moving towards the business goals via the product strategy. Additionally this ensure that the execution was being shared early as well as the strategy serving it.
3. Conduct Market and User Research
– Conduct thorough market analysis and user research to identify gaps and opportunities. This data-driven approach ensures that your product strategy is grounded in real-world insights. This is blatantly obvious but actually do it! Document the findings and make them easily to find by pinning them to Slack channels of the project or in Notion at a top level hierarchy.
4. Set Measurable Objectives and Key Results (OKRs)
– Establish clear, measurable OKRs that link product performance to business outcomes. This ensures accountability and enables continuous improvement. This really does bring things home – if you’re not aiming for something tangible then all you have is assumption, guesswork and goals that do not exist. Be fair and do not try to impart wildly unrealistic numbers to ladder up to. Think big but not TOO big!
5. Foster a Culture of Agility and Innovation
– Encourage a culture where agility and innovation are valued. This helps teams quickly pivot and adapt their strategies in response to market changes and new information. Tesla’s ability to rapidly innovate and adapt its product strategy in response to emerging trends in the electric vehicle market has been a key factor in its success.
6. Regularly Review and Adjust Strategies
– Conduct regular strategy reviews to assess progress and make necessary adjustments. This ensures that the product strategy remains aligned with evolving business goals and market conditions. Microsoft’s shift from a software-centric to a cloud-first strategy, with regular reviews and adjustments, allowed it to realign its product offerings with the business goal of becoming a leading cloud service provider. The same could be said of one of my least favourite companies, Adobe. Whilst I do not like their bloated products I cannot knock their business strategy and product iteration. By moving to a cloud subscription service they have remained profitable and successful.
Apple’s product strategy is intricately tied to its business goals of innovation and premium market positioning. The seamless integration of hardware, software, and services—exemplified by products like the iPhone, iPad, and Apple Watch—demonstrates a clear alignment with Apple’s goal of creating a cohesive and unparalleled user experience. This strategic alignment has enabled Apple to maintain its status as a leader in the tech industry while achieving substantial financial growth. As such every business has it’s MO – here quality and brand perception is Apple’s remit. Other companies might have feature-sets or other things that set them apart or provide some sort of moat. What’s yours for your company?
Achieving Alignment: Your Next Steps
Aligning your product strategy with your business goals is not a one-time task but an ongoing process that requires vigilance, flexibility, and a commitment to continuous improvement. By following the steps outlined in this guide and learning from the examples of industry leaders, you can position your products for success and drive meaningful business outcomes.