Product Management Marty Cagan

Coaching – Strategic Context

To continue with our series on coaching, in this article I will be covering a different aspect of coaching, which has to do with ensuring the product manager has the necessary understanding of the broader business context in which her team is operating.

I refer to this information here as the strategic context, and as you’ll see, this includes several important and major topics, all of which I’ve discussed in depth elsewhere, but together form the understanding necessary for empowered product teams to make good choices.

If product teams are to be empowered to make decisions, they need to have the context necessary to make these decisions.  This strategic context typically comes from the leaders of the company, but needs to be deeply understood by the product managers.

Normally the strategic context is part of the onboarding for any new product manager joining the organization.

Note: In this article I am using the term “company” to represent the larger business entity, but in very large companies, there may be several business units or divisions where this strategic context may be different for each.  As an example, Amazon’s AWS business unit is a very different strategic context from their Amazon.com e-commerce business unit.

Generally, there are six types of strategic context:

Company Mission

Simply put, this is the purpose of the company.  It is meant to communicate to everyone involved why we are here.  This is usually a simple statement, and it’s intended to be durable, usually lasting for a decade or more, if not the life of the company.

If any employee does not know the mission of the company, then that would be an obvious sign that something is seriously wrong in the culture, the leaders and/or the managers.

But while it’s common that everyone knows the purpose of the company, many people may not know how they personally are able to contribute to that mission.

Company Scorecard

Every product and every company has a set of key performance indicators (KPI’s) that help provide an understanding of the overall state and health of the business, referred to here as the company scorecard, and sometimes as the company dashboard.  Sometimes these may be fairly straightforward and other times they can be quite complex.

As an example, in a two-sided marketplace, there are usually some critical KPI’s that tell us whether our marketplace is in balance, meaning that both sides receive value.  As an obvious example of an unhealthy marketplace, suppose you had a job marketplace with employers posting jobs and job seekers searching for work, but suppose you had thousands of people coming every day to search for jobs, but almost no jobs available.  The job seekers would be frustrated and likely would quickly go elsewhere.

And, of course, in a two-sided job marketplace we would have at least two funnels, one to bring in job seekers and one to bring in employers, and we’d watch closely the key metrics for each funnel.

The company scorecard captures not just the business model but the broader business dynamics – it does not focus on every metric, but rather on the most important and informative metrics.  It is how the leaders of the company judge the overall health and performance of the company.

Company Objectives

Once we understand the company scorecard, we can now discuss the specific objectives the company is focused on for this year.

These objectives are selected by the leadership team, usually with the participation of the board, as the most important areas of focus.  They might be related to growth, or expansion, or profitability, or customer satisfaction.  And for each of these areas of improvement, there are typically specific business targets the company hopes to achieve (the key results).

The key results are nearly always KPI’s that are on the company scorecard.  If they’re not yet on the scorecard, then they would typically be added.

This way the company can track progress on the objectives, and at the same time ensure there’s no unintended consequences to the health of the business.

Product Vision

Ultimately the way we deliver on a company’s mission is to develop products and services for our customers.  The product vision is how we hope to do that.

Normally the product vision is somewhere between 3 years and 10 years out.  It is the future we are trying to create.

The mission may provide the purpose, but it’s the vision that begins to make this tangible.  The product vision is also generally our single best tool for recruiting strong product people.

This is what these people will be working on every day for several years, so it needs to be inspiring.  Yet it’s also important that the product vision not be too specific because we know we can’t yet know the details.

This is what empowered product teams will be figuring out: how to make this vision a reality.

Product Strategy

The product strategy is where things start to become more specific.  We have a set of company objectives that we are all here to help achieve this year, and we have a product vision that we need multiple years to achieve, and we also generally have multiple product teams each with different skills.

The product strategy connects these concepts.  The product strategy drives the specific work that each product team is intended to tackle.

It is the product strategy that will drive the specific product team objectives, but at that point we’re no longer discussing the overall strategic context, and we’re now looking at an individual product team, so we will discuss that topic in depth later.

Product Principles

The product principles complement the product vision and product strategy by stating the values and beliefs that are intended to inform many of the many product decisions that will need to be made.

So many decisions revolve around trade-offs, and the product principles help to illuminate the values we prioritize when we make these trade-offs.

The product manager needs to understand these principles and the reasoning behind each one.

The strategic context provided by the company mission, company scorecard, company objectives, product vision, product strategy and product principles is meant to apply to all product teams in the company.

Each product manager needs to understand this strategic context, and she needs to demonstrate in her statements, actions and decisions how her team is contributing to these common goals.