Making you more effective through Strategy, Product, and OKRs
You Might Think Your Product Doesn’t Need a Strategy. Here’s Why You’re Wrong.
This team focused on customer needs & strategy over just technology. Image via Midjourney.
What separates “cool” tech from a sustainable business
Everyone is obsessed with tales of the hottest VC ventures bringing their “game-changing” products to market. But more often than not, these romanticized stories are carefully constructed to hide the truth.
Because for every ChatGPT, we never hear about the countless other AI-powered startups that run out of money and shut down every day.
And for the rest of the 99.99% of companies out there, it’s unrealistic for them to fantasize they’re one AI feature implementation away from blockbuster success in their industry.
Because cool tech alone can never create a lasting business.
What will?
The truth is that boring, proven technologies within your company’s capabilities, combined with great strategy, will always be 100X more valuable to both your customers, as well as your business, than any piece of tech alone could ever be.
Understanding strategy
But customer-centric, Design-Thinking-focused approaches to strategy aren’t widely-known or practiced. And to do them effectively requires real focus, reflection, and collaboration from a cross-functional leadership group.
Worse, many perceive strategy as time-consuming, boring, unsexy, or theoretical, the area for people who talk but don’t put their ideas into action. Those who focus exclusively on the tech side of their “brilliant” startup ideas don’t feel they need to go to the effort of designing strategy.
They simply point to all the startups that didn’t use strategy and achieved massive growth and success — Look at ChatGPT, Instagram, or TikTok.
We have the tech, and we know what we need to do — we just have to “execute.”
When great “execution” isn’t enough
Plenty of companies have ammassed huge funding, assembled top-tier teams, executed well, and still flamed out spectacularly — Quibi is perhaps the most notorious recent example.
Quibi’s big “splash” presentation at CES, 1/15/20. Courtesy of MarketingDrive.
Despite raising $1.75 billion (with a “b”), a beautifully-polished app experience and A-List Hollywood original content, Quibi announced they were shutting down just 10 months after their CES presentation.
Among numerous other factors, Quibi missed the point that its target users were already happy with both the content and social media functionality available via free video products.
Quibi failed because Hollywood and big tech moguls believed they knew better how to solve a problem users didn’t need solved.
That wouldn’t have happened with a tested set of strategic choices.
Your organization’s reason for being isn’t a strategy
Your goal isn’t a strategy
Your list of everything you want to do isn’t a strategy
Strategy is client-centric
Strategy depends on creatively (vs. analytically) designing these choices to address client unmet needs, and influence something out of our control — client behavior.
And you have a great example of successful product strategy in your pocket right now.
Apple as an example of strategic success
When Steve Jobs returned as CEO of Apple, with the company months from bankruptcy, he rebooted Apple’s strategy to focus on high-end consumer electronic devices.
Jobs consciously decided not to be Gateway or IBM, to sell on low prices, or market computers based on their specifications. Jobs would tailor all Apple devices for people who were willing to pay more for beautifully-designed products that were seamless integrations of hardware and software. Neither specs nor price would be the primary drivers for Apple customers. What they wanted were devices that just “worked.”
And the reason they “just worked” was because Apple was intentionally designed from the ground up to consistently achieve it:
“It’s in Apple’s DNA that technology alone is not enough — it’s technology married with liberal arts, married with the humanities, that yields us the results that make our heart sing.”
Steve Jobs, iPad 2 launch
Apple’s long-term impacts on the cell phone market
The reason phones no longer have physical keyboards was due to Jobs’ conscious iPhone strategy — Despite no evidence confirming his belief, we was convinced software alone could create a better typing experience.
And it’s not that other phone manufacturers like Nokia or Blackberry also couldn’t seamlessly blend hardware and software to create high-end keyboard-less phones — it simply wasn’t part of their strategy.
They were focused on rushing out tiny variations of “me too” devices with tiny plastic keyboards to gain the greatest possible market share in order to drive growth, profit, and shareholder value.
And, for a time, it worked beautifully.
2008: The first Android phone, Google’s answer to the iPhone. Note the keyboard. Image courtesy Wikipedia.
But as soon as the iPhone’s keyboard-less approach started to dominate, Android rapidly pivoted to touch-screen typing, and the rest is history.
Apple’s strategy has always been closer to that of BMW or Mercedes-Benz: Design and build high-end, beautifully-engineered consumer products with healthy profit margins.
Client-centricity + Strategy = $Profit
Large market share was never a focus. For all their fame, the high-end German auto manufacturers have historically only held about a tiny 3% market share compared to America’s “Big Three.”
And while Apple has never sold as many phones as their competitors, their strategy has helped them rake in the majority of the available profits. This directly mirrors Mercedes-Benz and BMW, who sell far fewer vehicles but rank #4 and #2 among the most profitable auto manufacturers.
How successful has Apple’s strategy been?
“Tech giant Apple is proof of how far high-quality products and strong brand loyalty can go. It first became the world’s most valuable company on Aug. 9, 2011, just 15 days before Steve Jobs resigned as CEO. It held the top spot for the better part of the last decade, and still isn’t that far behind Microsoft. Apple also holds the distinction of being the first company to hit market caps of $1 trillion, $2 trillion, and $3 trillion.”
Not bad for a “niche” manufacturer of high-end electronics.
“Flattening” technologies
But let’s get back to those hot startups that seemingly succeed without a strategy.
How do they achieve “unicorn” status by riding a cutting-edge tech wave, pivoting their way to hundreds of millions of users and billion-dollar valuations?
When new tech gets invented and becomes widely-adopted, it “flattens” the tech that came before. Courtesy Roger L. Martin, “Information Technology & Strategy.”
“Flattened” technologies in everyday life
Martin’s view is that every once in a while, technologies emerge that “flatten” all other companies, and raise a new floor on the dominant technology customers rely on.
For example, VHS players were for years the dominant entertainment technology, literally available everywhere. This allowed Blockbuster to build an incredibly lucrative business to not only lead in global VHS tape rentals, but rake in additional billions in tape “rewind” fees.
But when DVD players started replacing VHS, they literally “flattened” the VHS market. And with the rise of broadband and Netflix shortly thereafter, Blockbuster’s rental business and rewind fee “cash cow” they had built and sustained over years rapidly evaporated over months.
Three ways tech and strategy mix
Martin suggests three ways “Flattening” technologies work with strategy, ranging in degree from lesser to greater strategy influence:
When you’ve invented a groundbreaking technology, you can ride that wave, as OpenAI has recently done with ChatGPT
When you’ve built up deep expertise in a “flattening” technology as Midjourney has done with their AI image generation tool
When you’re able to combine deep customer insights with technology in new and differentiated ways as Apple did for years, and as OŪRA ring does effectively for its customers
The first two depend on massive technology expertise.
The third only requires you to be “good enough” at the necessary tech, and understand your customers better than the competition.
The power of knowing your customers
So it’s this third option Martin outlines that requires the greatest client-centricity and effort in strategy design, but gives us the greatest likelihood of reliably crafting successful outcomes for both our businesses and our customers.
Only by knowing your customers better, and combining those insights with technology in new and differentiated ways gives us the chance of succeeding without needing to achieve the highest bar of technical expertise.
And this is exactly what Apple did — their innovations may have been few, but they stuck with their strategy of combining technology and customer insights to create “technology, married with liberal arts, married with the humanities, that yields us the results that make our heart sing.”
Collaborative Strategy Design
You, too, can make your customers’ hearts “sing.”
But to get there, you’ll need to start by working backwards from a client-centric opportunity.
The “Playing to Win” “Strategy Process Map” offers a proven framework based in Design Thinking to guide the design of multiple sets of strategic choices. We can then rapidly test and prove or disprove the assumptions underlying these sets of choices with customers to understand how likely these “Where to Play” and “How to Win” choices will hold up.
But just as important is to put effort into the “execution” aspects of our strategic choice set:
Do we have, or can we build, the necessary “Must-Have Capabilities” to deliver on our “Where to Play” and “How to Win” choices?
Do we have the “Enabling Management Systems” to support, set goals and measure our ability to achieve them, and continuously improve our “Must-Have Capabilities?”
The insurmountable advantage of “Can’t/Won’t”
In this often-overlooked area of strategy design, having distinctive Capabilities and Management Systems means our strategy can’t easily be copied by our competitors.
Once we’ve identified the users and sections of the market that we’ll focus on uniquely serving through our distinctive capabilities, we continuously reinvest and double down on them to the point our competitors either Can’t easily, or simply decide they Won’t copy us.
Can’t or Won’t copy Apple
Apple leads with their unique expertise in understanding customer needs before they do, and addresses them through elegant, simple designs.
They marry that with unparalleled expertise in hardware engineering and manufacturing at scale so great, that the barrier for building similar capabilities is something most companies are simply unable to do.
But you can also build capabilities through skillful hires — It’s telling that the Kindle, one of Amazon’s biggest hits ever, was created when they hired former Apple and Palm executive Gregg Zehr to lead their Kindle hardware design team.
Takeaways & TL;dr:
Does your product need a strategy to succeed?
You always have the opportunity to leave it up to chance and “wing it,” deciding your tech capabilities alone will help you win.
And there are two ways you can do that:
1. Invent the next cutting-edge piece of technology
2. Develop industry-leading strength in a technology
Far more realistically and easily, you can consciously choose to increase your probability of success.
Rest assured, if all you’re building is some “me too” AI-infused product, you stand little to no chance of success.
Why?
Because scrappy competitors will be:
1. Regularly talking to customers and using those insights to form the foundation of a clear strategy.
2. Busy hiring and upskilling their people to improve their capabilities in the technology
3. Designing a set of management systems for goal-setting, measuring, and support to continuously improve those capabilities
These upstarts will come in and steal your customers by more effectively using that tech to solve user problems than you, and the likelihood of your company getting left behind increases dramatically on a daily basis.
You must be logged in to post a comment.