Ten Product Leaders, Ten Documents, No Strategy

This article has been co-authored by Hamza El Uamari, Head of Product Decision Intelligence at KLM.

Summary:

Product strategy is the set of choices that explains how a product will win: who it serves, which needs it addresses, what makes it different, and how it creates value for the business. It connects product vision to the roadmap. A strong strategy requires a clear diagnosis and deliberate choices, not a feature list or a one-size-fits-all platform. In an AI-first environment, that discipline matters even more. AI expands what teams can build, but it does not decide what they should build. AI will not fix a weak strategy. It will expose it.

Imagine asking ten product leaders to show you their product strategy. It’s likely you will receive ten very different documents in response. One will show you a vision statement. Another a roadmap. A third will show a list of features for the next two quarters. And someone will almost certainly have a slide with three pillars and a lot of arrows. Each may contain very relevant insights, context, or plans. But none of them actually showed you a product strategy.

We see this repeatedly, and our intent is not to criticize product people. It is a symptom of how confused our profession still is about what a product strategy actually is. We talk about it frequently, but across the board, we’re still not very aligned on what it is and what it isn’t.

In this ‘AI-First Product Strategy series, we will obviously explore how AI impacts product strategy. But before we do that, we first need to align on the concept. Many of the challenges product leaders will have with AI are problems they already had. AI will not fix a weak strategy. It will expose it. So, that’s where we need to start.

Why ‘one size fits all’ is not a product strategy

If you’ve been in product management for some time, you will have met companies and stakeholders who love the ‘one size fits all’ approach. It sounds responsible at first. It sounds efficient. It can even sound like good leadership to build one platform or product that serves everyone. Because our stakeholders love standardization, don’t they? But this particular flavor of ambition gets product leaders into trouble.

In practice, such as combining three dashboards into one configurable dashboard because maintaining three feels wasteful, merging finance and operations tools because having two feels like duplication, or designing one feature to serve every persona because narrowing the audience feels like leaving value on the table.

It rarely works because strategy is a set of choices, and choices mean saying no. Roman Pichler’s product strategy framework makes those choices explicit. He says: “a real product strategy requires you to pick a market, pick the needs you'll address, pick what makes the product stand out, and pick the business goal it serves.” A product that tries to please everyone avoids those choices. It does not choose a market or prioritize a need. That is not strategy. It is the absence of a strategic product decision.

Product strategy is more than a slide

When people hear ‘product strategy,’ they often think of a slide, or multiple ones. Slides can absolutely help present your strategy to stakeholders, but the slide is not the strategy. Strategy has multiple layers, and there are different styles of strategy depending on the environment. Confusing those layers and styles is where a lot of the noise starts.

The layers run from corporate strategy at the top, to business strategy beneath it, to product strategy, alongside supporting strategies like go-to-market, pricing, marketing, sales, and technology strategy. Knowing which layer you're operating at prevents a lot of pointless meetings where people argue past each other because they're solving problems at different altitudes.

In ‘Your Strategy Needs a Strategy’ Reeves, Haanaes, and Sinha argue that the right approach to styles depends on your environment. How predictable it is, how much you can shape it, and how harsh it is, all influence the strategy style. They describe five approaches, called the ‘Strategy Palette’:

Figure 1: The Strategy Palette, by BCG

These styles matter because the right strategy depends on the environment. A scale-first approach may work in a stable market, but it can be costly in an environment that requires an Adaptive or Visionary style. AI-first markets make this mismatch especially visible. Companies can commit heavily before the market has validated the bet, making the wrong strategy expensive and difficult to unwind. A Classical style strategy bet demands an investment upfront, before the market gets a vote, so you find out you were wrong only after the money is spent. And because so much has already been committed, a wrong big bet doesn't get killed, it gets defended, often longer than it should survive (commonly known as the ‘Sunk Cost Fallacy’).

What is product strategy?

Simply put, product strategy is the set of choices that explains how your product will win. It identifies who the product is for, which needs it will address, what makes it stand out, and how it contributes to the business. It sits between the product vision, why the product exists, and the roadmap, how the product will likely evolve over time. That middle position matters. When product strategy is missing, the vision floats free of the roadmap, and the roadmap becomes a feature list with no logic or reasoning behind it. Most ‘strategy problems’ we are asked to help with are really this gap: a vision and a backlog with nothing connecting them.

Figure 2: The Bigger Picture 

Pichler’s Product Strategy Framework is a source we frequently use for explaining the concept and elements of product strategy. The framework covers 3 main concepts:

Another perspective on Product Strategy that resonates a lot with us is provided by Gibson Biddle, a former VP of Product at Netflix. Although his DHM-model is essentially very much aligned with Pichler’s framework, it adds a bit of spice. The DHM model states that strong product strategy should Delight Customers, in Hard-to-Copy, and Margin-Enhancing Ways.

‘Delight’ alone is not enough. If competitors can easily copy the product, service, or value it provides, you may lose those precious customers fast. And if you don’t ensure healthy economics (margins) as the product or service grows, the advantage won’t last for very long either. DHM is the quickest way to tell a real strategy from a nice idea.

A good strategy starts with a diagnosis

If Pichler tells us where to make choices and Biddle tells us what makes those choices strong, Richard Rumelt tells us what a good strategy is made of. In Good Strategy, Bad Strategy, he describes a kernel of three parts: diagnosis, guiding policy, and coherent action.

First, diagnose the real challenge. Second, establish a guiding policy addressing it. Third, define coherent actions that put the policy into practice. Miss any of the three and the strategy is incomplete.

The most common cause of bad strategy, he says, is a weak or absent diagnosis. Without a diagnosis, you are left with wish lists, budgets, and hope. This is exactly what happens when people build a "one size fits all" product. The real, underlying problem (customer, user, market, and/or business) is usually not diagnosed nor understood well enough, and as a result, no proper (product) strategy is defined. It is rather an aspiration with a budget attached.

So, next time you review your product’s strategy, start with one question: What is the single most important obstacle standing between this product and success? If you cannot answer that in a sentence, you are not ready to choose actions yet.

What is the difference between product strategy and business strategy?

Here is a distinction that gets blurred constantly, and blurring it causes real damage.
Business strategy answers how the company as a whole competes and makes money. It covers where the organization chooses to play, its business model, pricing, and how it intends to win. Product strategy answers how a specific product becomes successful with a specific audience, and how that product contributes to the broader business strategy.

Product strategy is nested inside business strategy. Product strategy supports business strategy. It is not a smaller copy of it, and it is not a synonym for it. A common failure is a product team that writes a "product strategy" which is really just the company's business goals reworded.

Another is a product team that builds a beautiful product strategy with no line of sight to how the business actually becomes successful.

But the relationship isn't one-way traffic. Business strategy sets the boundaries product strategy has to work within, but product strategy also talks back. Marty Cagan puts it plainly: ‘business leaders (e.g. executives) own business strategy and portfolio planning, product leaders own product strategy within those constraints.’

Roger Martin, in his book ‘Playing to Win’ describes an approach for creating winning business strategies, which helps us to understand the differences between product and business strategy even more. Crafting a compelling business strategy (amongst others) involves answering questions like:

Some product bets prove too costly, too complex, or simply unwanted by the market once you actually build and test them. Customer, user, and business feedback belongs at the business strategy table too.

A business leader who ignores learnings from customers and users (who have been using the product) is just setting targets no product can actually hit (or they can, but mostly due to luck rather than strategy). Your job as a product leader is to connect the dots: translate business intent into product choices and reflect feedback and product metrics back up into business thinking.

What good product strategy looks like: From Netflix to an Airline's Prediction Model

Netflix's product strategy under Biddle wasn't "stream more content to more people. It was specific: personalized recommendations that made content discovery genuinely delightful, built on proprietary viewing data and algorithms competitors couldn't easily copy, which in turn kept subscribers around longer and made them use the product more as it scaled.

Every major decision, autoplay, the profile system, and the recommendation engine trace back to that same lock-up of delight, defensibility, and economics. Nothing about it was a slide. It showed up in the product itself.

We've seen a smaller version of this same discipline at KLM Royal Dutch Airlines (KLM). KLM had a prediction model built as a single, general-purpose solution meant to serve multiple business units at once, one big solution for everyone, the exact trap we opened with. It technically worked. But it delighted no one, because it was tuned to the average case, not to any specific business's actual context, and Rumelt's diagnosis was missing entirely: nobody had named which specific obstacle, for which specific business, the model was meant to solve.

KLM rebuilt it as separate, tailored models for each business, each shaped around its own data, constraints, and decision needs. The result wasn't a bigger platform. It was several smaller, sharper ones, each with a real diagnosis and a real audience behind it.

Is your product strategy actually a strategy?

This is the first article of our ‘AI-First Product Strategy’ series and introduces the concept of product strategy, as well as common pitfalls and misunderstandings. Coming up in the series, we will explore:

Before moving on, test your product strategy by answering one question: ‘If you had to name your single most important obstacle, your specific audience, and what makes your product hard to copy, in one sentence each, could you actually do it?’

Somewhere in your organization, executives are already asking how to "do something with AI." Before you answer that question with a roadmap or feature list, ask yourself a harder question: ‘How will infusing AI into the product(s) or service(s) delight customers, amplify the hard-to-copy advantages, or enhance margins significantly?’