For several years, I taught Naval tactics and operations. Much of the teaching methodology focused on learning from prior operations with the luxury of history telling how things worked. One of the key mechanisms the military planning process focuses on is defining your “winning outcomes”. A key aspect of a good product strategy is your definition of winning. While this sounds simple, a good definition that will help you is more involved than you might think.
First, prevent failure
When you are making plans affecting the lives of people, it is important you know what the cost of failure or defeat is. It’s not just missing earnings targets. With that in mind, good military plans start with defining what failure looks like. In the military context, failure might be the successful resupply of forces ashore by the enemy. Depending on the situation, it could be the enemy blocking your resupply. Of course, the worst-case scenario to be always considered would be the eradication of your forces. Regardless, identifying what failure looks like in your context will give you additional insights for plans.
In business, if you are actually facing fierce competition, failure might mean not taking profitable marketshare. If you identify the specific form of failure, you can anticipate things competitors are likely to do to thwart your product growing. They may offer a loyalty program to their highest value customers. Perhaps they’ll institute pricing discounts for certain segments. It is possible they will subsidize their product, since they make more money from the ad revenue the product enables; it can be difficult to compete with free.
One key when considering competition is to assume they are smart and want to beat you. They are not likely to expend effort on actions that won’t move them closer to a win (as they define it), so plan accordingly. Assuming competition won’t react is a recipe for failure. Countering what the competition is likely to do allows you to prevent loosing.
Possibly, for your product, failure it is not gaining enough customers to cover your capital costs for a new product launch, or not having revenue sufficient for ongoing operating expenses. Defining failure will enable you to plan for minimizing the chance of failing, which is the first step in winning.
Maximize opportunities for success
Once you take steps to prevent failure, you can plan to maximize your success. These plans will be just as situational as your competitors approaches to maintaining their position. It is important to ensure rigor when defining the assets available to both sides. In the military, this is the order of battle, the capabilities of the weapon systems, the terrain, the political environment, and much more. In the business setting, it includes competitors, the market, government regulators, etc. Having a robust understanding of all the forces available on both sides of your strategic equation is the heart of the ”how do know” questions mentioned in my prior article.
As you develop understanding of the forces for and against your product, possible approaches to maximizing your possibility for success will emerge. Look at each of these options and asses the results of them going exactly as envisioned. If you have the luxury of multiple options, pick the one with the highest likelihood of success when you consider your competitor's efforts to thwart your efforts.
Understand strategic contingencies
If you truly have multiple strategic approaches, pick one. On the surface, it may seem wise to pursue multiple strategies. This will create resource contention and dilute the effectiveness of either strategy. If the product team cannot decide on a single strategy, as a senior leader, you must choose to keep them focused on the main goal of winning. If you are concerned about adjusting your plan in the face of competition, we’ll discuss that in the next article.
Looking back
There are many examples of successful product strategy in the press, if you know how to think about the definitions of winning. Apple decided to compete on the profits available in the mobile phone market rather than volume of marketshare. Google focused on the utility of search to consumers, with a follow-on plan to monetize their efforts at scale. Tesla seized the opportunity at the high-end of the EV market when competitors were focused on a smaller, cheaper electric or hybrid vehicles.
There are also examples of product strategy failures. These are difficult to spot as they occur, and sometimes are not evident until a business closes down or the product is discontinued.
Suppose you are a chip manufacturer with a strong market position in the desktop and server spaces. A customer who has a large laptop business base tells you that performance per watt is their key long-term consideration. Additionally, they see a market trend of people wanting more mobile technology. Is it a sound product strategy to remain focused on high-power, high-performance chips? Is following this approach maximizing your opportunity for success? A good product strategy would at least consider what defeat looks like — loss of a laptop manufacturing customer coupled with missing the high-growth market driven by mobile computing — and put plans in place to counter or be ready for such a market shift.
Even if you miss the strategic implications of such a market shift, you must ensure your strategy has feedback loops to keep your product relevant to customers. We’ll cover that in the next article.
Do you require urgent help?
If you’re still not sure if you have a wining product strategy, and need to make some quick decisions, drop me an in-mail and let’s connect. My extensive background in business, technology, product, and program delivery uniquely positions me to help you rationalize product lines, right-size sales teams, and increase sales with expanded offerings. Contact me today and ask for a free problem assessment and evaluation.