THE COMPLETE PRODUCT STRATEGY GUIDE — PART 3

Developing and executing a winning strategy is hard. It is a messy, iterative and often experimental process. It must unify multiple considerations from the business opportunity, competitive dynamics and game-theoretic assumptions about how markets will respond. However, many businesses fall foul of a more basic pitfall: unintentionally not doing strategy at all. These unforced errors often result from a misunderstanding of what strategy is. Here are ten of the most common misconceptions:

What Strategy is Not

1. Strategy is not a vision or mission — Visions and missions are descriptions of the hazy future the team is seeking to build. They are great tools to inspire and create purpose, but often fail to answer the question "where do we focus right now". Strategy is the bridge that closes the gap between the vision and the work the team does.

2. Strategy is not a plan or a roadmap — Plans and roadmaps are tactical artefacts that help communicate a team's focus. Strategy attacks a more challenging problem. It answers not what we will do when, but what do we need to do to create a position of long-term competitive advantage for our product or business. Strategy should inform the roadmap but must operate on a higher plane of thinking.

3. Strategy is not an OKR or goal — OKRs and other goal-setting frameworks help provide clarity for the team on what they are trying to achieve and how they will measure their success. However, while a goal describes the outcome you are trying to achieve, strategy explains why it is the right outcome, and how you will achieve it.

4. Strategy is not the Lean Startup or Agile — The Lean Startup and Agile are methodologies that can help teams move faster with confidence. They centre on efficiency and effectiveness in validating the business is on the right course. In this way, they are a means to an end, but not the end themselves. Strategy is what defines the end the business is seeking to reach.

5. Strategy is not optimising the status quo — The status quo is comfortable. Comfort can bread laziness, such as the constant optimisation of an existing business or idea. However, the world is not static: competitors change tactics, customer change expectations, technologies change the market and every so often natural disasters or pandemics can change the world. Strategy must reflect these realities. It is by challenging the status quo that strategy can incorporate this new information, and so enable the business to take advantage of emerging opportunities.

6. Strategy is not a disjointed set of decisions and initiatives — Disjointed initiatives and projects without clarity or focus often fail to create sustainable, long-term value. Strategy provides a unifying framework which helps a business understand their key problem spaces. It enables the company to cull a plethora of divergent initiatives and leave a meaningful few, which have a real impact.

7. Strategy is not trying to do everything — A strategy is a series of choices. The choices around what not to do are even more important than the choices of what to do. By reducing the number of options from the infinite to the few, strategy brings clarity and direction.

8. Strategy is not just copying the competition — There are times when the right move is to copy the competition: think Instagram and Snapchat or Microsoft and Slack. However, if an organisation overly fixates on the competition, it ignores what makes it different. Strategy is about discovering and pushing these differences.

9. Strategy is not a secret — If no one knows what the strategy is, they will fill the void with their own ideas. However, to stop strategy being a secret is more than just sharing a presentation. Many strategies become secrets, not through malice, but neglect. By not telling the story, bringing it to life, and reinforcing over time, the strategy ends up being filed away in dusty corners of our minds — and ends as a secret even from ourselves. Strategy works best when it is commonly understood and consistent across the team.

10. Strategy is not perfect — Perfection is not attainable. Expecting a strategy to be perfect neglects this fact and renders it inflexible to new information. Strategy should be the best path we have right now, with an acceptance that if the world changes tomorrow, the strategy must adjust too.

So what is strategy?

Ultimately, strategy is a set of choices firms make on what they will — and will not — do. These choices should put the organisation on a path to creating hard-to-copy value for their customers. Hard-to-copy value provides the basis of enduring competitive advantage — the goal of strategy. The output of good strategy is a manageable number of business objectives and an understanding of where to invest to achieve them. In this way, strategy is the bridge from the mission and vision of the business, and the work teams actually do.

I hope this post has helped bring some clarity to what strategy is. Have you seen any of these traps play out in your business? How have you overcome them?