497: Mastering product management strategy – with Andreas Maihoefer

Product Mastery Now for Product Managers, Leaders, and Innovators

Essential strategy tools and frameworks for product managers

Watch on YouTube

TLDR

Want to level up your product management game? This guide dives into the world of product strategy, sharing insights from expert Andreas Maihoefer. We’ll explore key tools like the House of Strategy, which shows how different levels of strategy fit together, and the VRIO analysis, which helps you spot your competitive edge. You’ll learn how to define your business’s core and why planning is crucial, even if plans change. Whether you’re new to product management or looking to sharpen your skills, this article will help you think more strategically and create products your customers will love.

Introduction

Ever felt like you’re navigating the wild world of product management without a compass? You’re not alone. Many product managers know strategy is important, but struggle to develop and use it effectively. This knowledge gap can slow down your career and limit your impact on your company’s success.

That’s where Andreas Maihoefer comes in. He’s a strategy whiz with experience in both the corporate world and academia. In this article, we’ll share his insights to help you level up your strategic thinking and become a product management superstar.

Why Strategy Matters in Product Management

Think of strategy as your product’s North Star. It guides your decisions, helps you prioritize features, and positions your product in the market. Without a solid strategy, you might end up with a cool product that nobody wants to buy.

Maihoefer stresses that understanding strategy is crucial for product managers. It’s not just about creating great products – it’s about aligning your work with your company’s big-picture goals. Master this, and you’ll see your career take off as your influence in the company grows.

Picking the Right Strategy Tools

Before we dive into specific tools, let’s talk about what makes a strategy tool useful. Maihoefer says a good tool should:

• Help you plan and think clearly
• Make it easy to work with others
• Help you explain your ideas visually
• Let you track progress and put plans into action

Here’s a pro tip: Don’t rely on just one tool. Using multiple tools gives you a more complete picture of your strategic landscape.

The House of Strategy: Your Strategic Blueprint

Imagine your company’s strategy as a house. This mental picture, called the House of Strategy, helps you see how different levels of strategy fit together.

The Roof: Your Company’s Foundation

At the top, we have your company’s mission (why you exist), vision (where you’re going), and values (how you behave). These guide all your strategic decisions.

The Attic: Corporate Strategy

Just below the roof is your overall company strategy. This is how you plan to achieve your mission and vision while sticking to your values.

Upper Floors: Business Unit Strategies

These strategies are for different parts of your company, like specific product lines. They need to line up with the corporate strategy above.

Lower Floors: Functional and Operational Strategies

At the ground level, we have strategies for different departments (like marketing or HR) and day-to-day operations. These show how each part of the company contributes to the bigger picture.

The House of Strategy reminds us that all these levels need to work together. It’s like having an elevator connecting all the floors – information and ideas should flow up and down easily.

Defining Your Core: What Makes You Special?

Another key part of product strategy is knowing your company’s core – what makes you unique. This idea comes from Chris Zook of Bain & Company, and it’s more than just identifying your main product.

Zook suggests looking at seven areas to define your core:

1. Products or Services
2. Customer Segments
3. Customer Needs
4. Channels
5. Geographies
6. Vertical Integration
7. Capabilities

Many companies focus on the first three, but Maihoefer says capabilities are super important. These are the unique skills and resources that set you apart and are hard for competitors to copy.

For example, Apple’s design capabilities and ecosystem integration are core strengths that go beyond just making phones or computers.

Understanding your core helps you:

• Spot what gives you an edge over competitors
• Make smart choices about growing or diversifying
• Protect and strengthen what makes you special

VRIO Analysis: Finding Your Competitive Edge

Once you know your core capabilities, how do you tell if they give you a real advantage? That’s where the VRIO analysis comes in. It’s a tool to assess whether a capability or resource gives you a lasting competitive edge.

By checking your capabilities against these criteria, you can see how valuable they are:

• All four? You’ve got a lasting competitive advantage.
• V, R, and O? You have a temporary edge.
• Just V and O? You’re on par with competitors.
• Only O or none? You’re at a disadvantage.

This analysis helps you decide which capabilities to invest in and which might need work.

More Tools for Your Strategy Toolkit

While the House of Strategy, Core Definition, and VRIO analysis are great, there are other useful tools too:

• Boston Consulting Group’s Growth Share Matrix: This helps you analyze your product portfolio and decide where to invest.
• SWOT Analysis: This classic tool looks at Strengths, Weaknesses, Opportunities, and Threats. Maihoefer suggests adding ratings to make it more nuanced.
• SWOT+T Analysis: This adds Trends to the mix, helping you spot market changes.

Putting Strategic Thinking into Action

Ready to boost your strategic skills? Try these steps:

1. Learn your company’s overall strategy, including its mission and values.
2. Understand how your product fits into the bigger picture.
3. Use tools like Core Definition and VRIO to find what makes your product special.
4. Practice strategic planning, even for small projects.
5. Work with people from different departments to get fresh perspectives.
6. Stay updated on industry trends that could affect your product.
7. Keep checking and adjusting your strategy based on how your product is doing.

Do these things, and you’ll not only make better products but also stand out as a strategic thinker in your company.

Conclusion

Becoming a strategy master in product management is an ongoing journey. It takes practice, learning, and adapting. By using tools like the House of Strategy, Core Definition, and VRIO analysis, you can sharpen your strategic thinking and make better decisions.

As you grow your strategic skills, you’ll not only create better products but also become more influential in your company. This will help your career take off and make you a true product master.

Keep innovating.

Useful links:

• Connect with Andreas on LinkedIn
• Visit Andreas’s website

Innovation Quote

“In preparing for battle, I have always found that plans are useless, but planning is indispensable.” – General Dwight D. Eisenhower

Application Questions

1. How well do we know our company’s overall strategy? How does our product strategy fit in?
2. What are our core capabilities? How do they stack up in a VRIO analysis?
3. How can we make our planning process better to prepare for market changes?
4. Which strategy tools work best for us? Are there new ones we should try?
5. How can we explain our product strategy better to people in different parts of the company?

Bio

Today our topic is strategy, which I expect our guest would argue is the most important of the 7 knowledge areas for product mastery. We all know strategy is important — it gets talked about enough. But, how a strategy is developed is seldomly talked about. Consequently, not many people can properly develop a strategy. That also means few people can evaluate a strategy. Since product innovation should be aligned with strategy, you need to be one of those few people who can properly develop and evaluate strategy. By the end of this episode, you’ll be on your way to do that.

Joining us is a product management and strategy master Andreas Maihoefer. He has guided executives in developing organization strategy and led product organizations in developing product strategy. He also teaches at the University of Pittsburgh and previously at Carnegie Mellon University.

Thanks!

Thank you for taking the journey to product mastery and learning with me from the successes and failures of product innovators, managers, and developers. If you enjoyed the discussion, help out a fellow product manager by sharing it using the social media buttons you see below.