How to drive your digital product forward: Tactical vs. Strategic approach

20 Jun 2024|Product

Companies that have embraced digital transformation should understand the value of a product strategy. Digital products require a strategic approach to development. Teams that dive into tactics too soon lose sight of the strategic vision, leading to complex, poorly maintained, and misaligned products. Shifting the focus from delivering features to achieving customer and business outcomes transforms teams from task executors to initiative owners, taking responsibility for business success.

The pitfalls of premature tactics

Tactics are very important; without tactical planning, we cannot address complex problems and dependencies. However, when aiming to develop a product or service that excels in external markets or internal domains, outperforming competitors, or achieving widespread adoption by employees, strategy must come first.

Unfortunately, teams often resort to tactics too soon, focusing on creating a lengthy backlog of tasks, with most of their time consumed by figuring out execution details. Plans are typically influenced by technologists who view problems as purely technical or by sales teams who might equate customer orientation with fulfilling every wish. The frequent question asked is, "When will this be delivered?" rather than revisiting the questions of why we're taking action or what broader impact we seek to achieve. Prematurely diving into granular planning can obscure the broader strategic vision or more commonly hide its absence altogether. In the end, we may carry out the tasks, finding satisfaction in the actions we've taken, yet not seeing any evidence of impact.

The result often resembles teams operating like feature factories, working on "Frankenstein" digital products, burdened with heavy maintenance and operational support. The team has long lost sight of the product as a whole. There is no core offering, excessive customization, and no measures in place to even perceive the outcome of any added change. Meanwhile, customers become more demanding or frustrated, and the "house of cards" product starts to fold on itself, declining prematurely.

From feature factories to strategic vision

A strategic approach, rooted in product thinking, is not blind to immediate needs but rather balances them with a thoughtful consideration of the broader, long-term vision and short term optimal outcomes. It treats the "why," "what," and "how" as equally important and ongoing questions throughout a product's lifespan.

Companies that have been digital from the beginning don't seem to struggle with understanding the importance of a product strategy.This is likely because, in their early stages, their product and business strategy were one and the same. For them, a successful business meant having a digital product that performed well in the market. However, many long-established companies, predating the digital transformation, find the concept of a digital product strategy somewhat foreign.

The truth is that without a product strategy, we may excel at execution but leave value creation for the business to chance. In today's digital age, tolerating such uncertain returns on investments may no longer be viable.

Product vision and target states

In the context of a digital product that is evolving over a long period of time, strategy work begins with establishing a long-term vision for the product. This vision serves as a high-level guide, providing inspiration and focus. Without it, teams may lose sight of the core offering and succumb to day-to-day demands, randomly piling up features. Vision allows us to say no to initiatives that don’t contribute to the bigger picture.

But as a vision is a faraway destination, achieving it is a gradual process and requires intermediate target states. These states represent valuable milestones for the business, starting with a niche audience and expanding over time. They align with specific business outcomes and KPI improvements, addressing unresolved problems and needs.

When defining your target states, it's important to consider where you are in the product lifecycle. Early stages may focus on market entry and initial customer acquisition, while later stages might emphasize scaling, optimization, and feature enhancement.

The questions you need to ask yourself about each target state are:

Who is the target audience?
- Start from a niche and expand later. It cannot be everyone; find a meaningful segment to address.
What business outcome do we want to see for this audience?
- Which business KPI can we improve, and by how much?
What unresolved problems can we solve or needs can we meet?
In which processes does the target audience engage or should they be engaged?
- What are the channels and touchpoints involved?
What behaviors do we want to improve or reduce to lead us to the desired business outcome?

Target states ensure focus and coherence, preventing teams from spreading themselves too thin and guiding steady progress towards the long-term vision. Instead of merely delivering outputs, the emphasis shifts to achieving outcomes that solve customer problems, demonstrate evidence of problem-solving, and bring tangible business value.

Moving from doers to achievers

By adopting a strategic mindset, teams move beyond reactive tactics to proactive planning. They align design and implementation efforts with overarching business goals, fostering a culture where every team member contributes to business success. Instead of designing and implementing features from external initiatives, the team takes responsibility for searching and sifting the right initiatives and seeking results. Driven by strategy, your team evolves from being just doers to becoming achievers. This approach not only enhances product development but also ensures sustainable growth in today's competitive digital landscape.