What is a Product Vision and Why Should I Have One for My Product?

A product vision encompasses the general idea of what the product does for whom and with what high-level benefits. The vision is intended to be enduring throughout the product lifecycle. The intent is to keep product management’s efforts focused in a consistent direction over the life of the product or at least the foreseeable future.

For products that do not have an upgrade cycle, the initial value proposition will likely be its ongoing product vision. For products and services that evolve with ongoing updates and development activities, the product vision helps to maintain a common overriding theme that all future development will respect.

The product vision is not a list of features or capabilities. It describes what the product does for a specific target market in terms of benefits. Here’s an example, our product encourages healthy exercise in the home for an aging population and is gentle on the joints, fun to use, and affordable. Much can be interpreted from this vision that can be implemented through a variety of features, while also putting boundaries around it and implying what the product is not.

The vision can also put stakes in the ground relative to competition that will force the product team to constantly stay ahead of their competitors by finding ways to make their product a market leader.

The product strategy should then go on to further describe, in general terms, how to achieve this product vision.

Conclusion

A product vision is a very useful tool for ensuring that your product develops in the way you intended. While a product vision can stand on its own it should serve as the cornerstone supporting your forward-looking and aligned product strategy and tactical product roadmap. This holds true regardless of which product development methodology your product team utilizes to actualize the product vision.

The best way to summarize this point is encapsulated by a recent comment from my last post on product strategy. Their quote, and I paraphrase here, was “relying upon a product roadmap in lieu of a product vision and strategy will get you somewhere – but it will likely be not where you intended to go.” Well said!

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Source: The Product Management and Marketing Body of Knowledge, Greg Geracie and Steven Eppinger

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Given this reality, I want to answer my friends question and differentiate product strategy from product roadmaps. Let’s start by defining product strategy.

Product Strategy

Organizations typically have an aspirational goal or vision for what their product could ultimately become in support of an overarching business objective. This vision is often conceptual, not committed to paper or even fully shaped. Regardless, product strategy is the path that organizations choose to take in order to achieve this idealized future product. In other words, product strategy is intended to describe how the organization, or product team, intends to achieve a desired future state. It provides high-level context for a set of activities or milestones that are to be pursued and strives to be directionally correct.

A product strategy is visually illustrated as a phased timeline or series of future steps starting with the current state to some defined point in the future (E.g. 3 or 5 years or even longer in some instances). This is often necessary as a product team may not have the necessary resources at their disposal to deliver all that they desire in the aspirational future state so parsing the product strategy into clearly defined components helps to structure the work ahead and manage stakeholder expectations.

From a communication standpoint, breaking the product strategy into easy-to-understand components makes the path forward more digestible, particularly for those who are not part of the core product team with inside knowledge of the effort. It is important to note that solid product strategy not only defines the boundaries of the actions you intend to take to achieve the desired future state, perhaps most importantly, it also articulates those activities that lie outside of the scope of the strategy that will not be pursued.

Providing a solid product strategy will help focus activities, establish a direct link between the product and the company strategy, and clearly identify to everyone involved the high-level steps currently being taken to achieve the vision.

Product Roadmap

A product roadmap is common for products that can be delivered incrementally or in an evolutionary fashion, and high-level requirements or epics are their building blocks. Product roadmaps act as the bridge between the product strategy and the actual tactical product development projects that are undertaken in pursuit of attaining the product goals.

While the product strategy outlines a desired future state the product roadmap articulates the necessary tactical steps to take to achieve the vision. As business conditions and priorities change, so should the product roadmap—think of it as a “living document.” The roadmap can be visualized in two distinct time frames.

In the short term, it’s a record of planned releases and may extend two to four release cycles into the future. These activities are often represented by calendar year or on a rolling 12-month basis. Some projects on the product roadmap may be already in active development, or some amount of planning has already occurred, and there is a high degree of confidence that most of the specified deliverables will happen.

The longer-term portion of the roadmap outlines product capabilities that reside outside the organization’s current planning activities and are effectively queued while the current priorities are being developed. This section provides a directional view of where the product might head given current business conditions in the next 12 months or longer. Any major changes in the current projects, the external marketplace, or internally in the business can change these envisioned future releases. For products or platforms with relatively long lives or industries that are relatively slow-moving, the long-term view can project out multiple years or span a predetermined lifecycle. For faster moving industries, such as software or consumer electronics, a multi-year look into the future may be much more difficult to assess with any degree of certainty, given the native rates of change, but it should remain directionally correct.

The primary internal objective of product roadmap activities is to gain organizational alignment so that resource and budget allocations can be planned in advance to enable effective execution. The main components of the product roadmap consist of 1) a defined time frame, 2) a solid understanding of market events or deadlines that will drive deliverables, such as the underlying sales cycle or product seasonality, 3) specific products, product capabilities, or themes phased over a period of time, and 4) associated development activities or resources impacted or required. The internal product roadmap may also be the result of, or heavily influenced by, the product definition and project plan activities for the current release. Very often, the desired scope of envisioned capabilities to be delivered, in the current targeted time frame, far exceeds the team’s human resources or budget, and so a prioritization exercise will be needed for what is delivered now—versus what can be deferred. Requirements prioritization may go so far as to further define a set of phases for future work, which becomes additional short-term and possibly longer term aspects of the roadmap.

For some industries or products, especially those sold business-to-business, an external version of the roadmap may be required for customers. This is often the case where the product impacts a major operational or strategic capability of the purchasing company, or is deployed on a large scale across the organization. As the buyers are making long-term and/or major decisions for the company, they expect to see long-term product plans from the suppliers. Customers typically want to be sure that the organization will continue to invest in the products, and product roadmaps are often used as a means to measure the pace of investment. External versions typically contain much less detail than the internal roadmap and can also be much less committal on specific dates. The most common representation depicts a high-level set of planned release milestones, in presentation slide format, and is often used to support internal or external communication—generally face-to-face.

Conclusion

Product strategy ensures effective alignment between company business goals and defines the path the product is taking to reach an idealized future state. The product roadmap differs from the product strategy as roadmap activities highlight current and near-term tactical development activities that ideally support the product strategy and the overarching business goals. Unfortunately, many organizations lean too heavily upon product roadmaps without setting the product strategy boundary to ensure tactical activities stay between the lines now and well into the envisioned future.

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Source: The Product Management and Marketing Body of Knowledge, Greg Geracie and Steven Eppinger

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Size of Core Product Team

The sizes of the core product teams in our respondents’ organizations vary greatly. Core product teams of five to nine members – a size often cited as the ideal team size – hold the largest percentage (35.7%). Percentages for those teams having one to four members and those with ten to thirty members are nearly identical at 25% and 25.9% respectively. Core product teams consisting of thirty or more employees are decidedly in the minority, representing just 13.4% of respondents’ companies.

The data also shows that the majority (42%) of companies with under $50M in annualized revenue are composed of one to four team members. Companies with $50M to $499M in revenue indicate their teams are comprised of 10 to 30 team members (36.5%). Companies with over $500M in revenue favor teams with between five to nine members, as do companies over $2B.

Performance Against Organizational Expectations

The vast majority of respondents believe strongly that their core product team delivers value. The issue is one of consistency: a solid 38.7% believe they are consistent in fulfilling the scope and schedule planned for projects and delivering results within budget; unfortunately, nearly half (47.3%) believe their team lacks consistency in meeting organizational expectations. The remaining 14% of respondents state their teams do not deliver value: 11.2% own up to meeting expectations only sporadically while 2.8% acknowledge falling short of expectations more often than not.

Conclusion

While we did not find a direct correlation between the size of a core product team and performance it is interesting to note that only 38.7% of core product teams state that they deliver value consistently. There is clearly plenty of room for improvement!

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A Closer Look at Our Survey Findings

This year’s data clearly illustrates the roles actively involved in innovation leadership. It is interesting to note that there tend to be three brackets of leadership, each playing a role at various points of a company’s growth and evolution. Let’s begin by taking a closer look at the actual survey data.

Who is responsible for incubating and leading the definition and development of innovative or disruptive products in your organization?

Product Management’s Role in Innovation

Nearly half of respondents (48.1%) said the responsibility for incubating and defining innovative or disruptive product ideas falls to a member of executive management. This ranges from the company founder (8.2%), CEO (11.8%) or CTO (5.9%) to the VP of Engineering (7.6%) or another thoughtleading executive team member (14.6%). Nearly a fourth of respondents (21.3%) indicate that product management holds responsibility for this important activity. Surprisingly, more than 8% said no one in their organization is responsible for the incubation of innovative or disruptive product ideas.

The Leadership Continuum

When size of a company’s revenue stream is overlaid on top of the innovation leadership data a clearer picture begins to emerge. In company’s of less than $50 M in annual revenue C-level executives typically drive innovation activities. As the $50 M threshold is breached, and continuing up to approximately $2 B in annual revenues, product management is expected to take the lead. Once the $2B threshold is attained cross-functional teams take the lead.

Product Management’s Leadership Role in Innovation Activities

Our data shows that product management is being held accountable in the majority of organizations (between $50 M to $2B in annual revenues) for driving innovation. There is a clear hand-off from executive leadership in the startup/scaleup phase to product management as organizations achieve mid-sized scale. This makes a large degree of intuitive sense as organizational revenue rises executives can afford specialization and need to rely upon others to lead these critical activities. Finally, as organizational size and complexity scale over $2B in annual revenue the baton is frequently handed-off to a cross-functional team rather than relying upon product managers.

In order for product management teams to successfully assume these responsibilities organizations need to ensure they have the right talent in place to smoothly transition these responsibilities and structure the team appropriately. Too often this hand-off is done in a manner that does not ensure continuity and, overtime, these issues can mushroom into problems that impede successful scaling.

How well is prepared is your organization to handle the innovation leadership transitions?

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A Bit of Background

Before I share the actual data it helps to provide a glimpse into the demographics underlying the study. Each year we conduct a survey that underpins our annual Study of Product Team Performance. Approximately, 1,200 to 1,500 global companies participate in our on-going research. Over 90% of survey participants tell us that they are actively involved in the development of their company’s products and services. Products range from technology (hardware and software) to consumer products and services.

A Closer Look at Historical Methodology Adoption Rates

2015 Actuation Consulting, all rights reserved.

If you closely examine the data an interesting picture starts to emerge. First, Blended product development methodologies peaked back in 2012 at 52.5%. Ever since then, they have pretty much flattened out and have been range bound between 45% and 43%. Blended methods remain the most commonly used approach to producing products. This has been true since we began tracking adoption rates.

Waterfall, on the other hand, also peaked in 2012 and had been on a steady decline. Waterfall usage reached a high of 18% in 2012 and a low of 10.2% in 2014. However, the trend line broke this year as Waterfall posted an unexpected gain bringing responses back up to 13.6%.

It is also worth noting that Agile methods did something we were not anticipating. In 2015, the Agile data broke with the historical trend as well. You can clearly see Agile’s rise to prominence in the 2012 and 2013 data. During this time Agile adoption rose from just less than 13% to 30.26% – in one year! Pretty staggering increase. Agile methods continued to be adopted in 2014 posting a heady increase of another 10% or so. Unexpectedly, the numbers for Agile adoption dropped off for the very first time in 2015. The data shows that Agile is in fact losing steam! Additionally, the decrease was pretty significant, roughly 7 percentage points.

In Conclusion

It is still too early to tell conclusively whether Agile methodology adoption has topped out for good but the 2016 survey data will give a strong indication if this is the case or simply an aberration. The 2015 data indicates that Waterfall is gaining ground at Agile’s expense. Next year’s data should bring some clarity to whether this change is a pattern that we should all pay attention to.

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The challenge for many businesses is encouraging the right voices to step forward while eliminating the office ogres who use their position or access to valuable information to intimidate others. This is not an uncommon problem as recent data suggests that 35% of workers deal with an office bully according to research from staffing firm OfficeTeam. Managers and staff need to face these troublemakers head on. No one should get a pass for negative behavior, it undermines teamwork and performance, no matter how valued that individual may be. As the saying goes “one bad apple can spoil the bunch.”

5 Tips to Keep In Mind

In order to ensure you are encouraging the right voices here are some things to keep in mind.

1. Seek out divergent opinions. Organizations should encourage team members to take a wide range of positions and not keep their opinions to themselves. Often company culture knowingly or unknowingly suppresses the honest opinion of employees who are more often punished than rewarded by voicing a divergent viewpoint. However, properly channeled corporate bravery can pay dividends. Leaders need to realize that diplomatic dissent can actually help the organization avoid debacles. If everyone is afraid to tell the emperor that he has no clothes the outcome can be disastrous.
2. Reach deep. Leaders tend to listen to the closest concentric circle of trusted advisers who act as a sounding board and to bounce ideas off of. Too few executives reach deeply enough into the organization to get candid viewpoints. Lower ranking employees tend to shy away from voicing their opinions if they hear executives table their opinions first. (If you have ever had a post interview session with a job candidate and had the most senior person table their view of the candidates fit and then ask for opinions from the rest of the interviewers you likely know what I mean!) Let lower ranking employees table their opinions before the most senior employees that way they can be encouraged to be candid without fear of being impolite.
3. Devils advocates are valuable. Encourage team members to play devils advocate and stake out contrarian points of view, even if they don’t reflect their personal opinions. Piercing questions about assumptions being made, potential risks or consequences prevents group thinking and tables a wider array of perspectives that can improve organizational decision-making.
4. Canary in the coal mine. How a leader reacts to an appropriately presented question or comment that goes against the corporate grain sends a signal to everyone in the company about the risks or rewards of stretching the bounds of the existing culture. If an executive adroitly addresses the question or comment and sincerely thanks the person who asked the question it encourages those who have something meaningful to say and contribute. The inverse also holds true.
5. In repetition lies danger. When jobs and cultures become routine it is a sign that the culture is enabling complicity with the status quo. The telltale signs are employees who settle in, keep their heads down and do as little as possible. Complacency breeds a lazy risk averse culture. Heed the warning signs.

Conclusion

The truth is contrarian viewpoints should be more highly valued than they often are. How well does your organization enable the voices of contrarians and address the antics of the office ogres?

You know who you are!

Source: Investors Business Daily, Manage Office’s Ogres by Sonja Carberry

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Setting Context

In order to fully understand survey respondents responses to the question about product profitability I want to provide you with some data on 2015 adoption rates for various product development methods that are currently in use. (You can read our prior blog post on this topic here.) When asked which product development methods their organization was utilizing survey respondents told us the following:

Which of the following methodologies best describes the way your organization develops products?

43% of survey responders – by far the highest percentage – indicate that their company utilizes a Blended approach to product development that combines both Waterfall and Agile methodologies. Agile/Scrum is the second most recorded answer, representing slightly more than a fourth of responses at 25.9%. Waterfall, with 13.6% of responses, is a trailing third. Nearly as many respondents (10.6%) indicate they did not know the methodology their organization employs in the development of products. Kanban, representing just 3.2% of responses, came in last among preferred methodologies listed.

Now Onto Product Profitability

It is clear from the previous bar graph that Blended methods continue to dominate as the primary method organizations are using to produce their products. Agile, particularly Scrum, methods come in second place. However, when we look at the perceptions that survey respondents have about which method most favorably impacts profitability the picture shifts.

Which of the following methodologies do you associate with increasing your product’s profitability?

For the third year in a row, dramatically more respondents (36.4%) believe Agile/Scrum would increase their product’s profitability than actually use it (25.9%). There are also more who believe Kanban would increase their product’s profitability than actually use it. Over half of Waterfall users would choose something else. With a third of Blended users opting for something else for profitability’s sake, it’s clear they think it is not the best method when the measure is profitability.

The Bottom Line

It is quite clear from this year’s findings that many organizations realize that the actual product development method that they are using is not the optimal one for enhancing a products profitability. This is particularly true of those organizations utilizing Blended methods. This will not come as a surprise to many who recognize that organizational constraints, such as annual planning processes, may preclude some organizations from fully implementing an Agile approach. Waterfall also drops precipitously. Many organizations utilizing this product development method do so for other valid reasons such as the ease of documentation (E.g. highly regulated industries). Regardless, survey respondents clearly view Agile methods as the hands-down winner.

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The importance of user experience to an organization’s products grows each year. User experience first emerged as a statistically significant factor in our 2014 study when we discovered that strong product teams had a user experience professional embedded. So it does not come as a surprise that user experience has shown up in our regression analysis again this year. Our 2015 data reveals that when user experience professionals are actively involved in the product development process and working closely with the product team, superior results follow.

Where Does User Experience Report To Today?

According to our survey, user experience reports to Engineering, Development, Technology or a similar department in nearly a third (29.8%) of companies surveyed.

User experience is perceived as becoming increasingly important to the design and development of successful products. Where does user experience report in your organization?

In slightly more than one-fourth (26.4%) of organizations user experience reports into Product Management, with another 8% reporting directly to the Chief Product Officer. The remaining responses are split fairly evenly between reports going to Technology Architecture, Product Architecture or a similar department (11.4%); Marketing (12.2%); or “Other” (12.2%). Included among the “Other” responses are a wide variety of departments and titles including CEO, Chief Content Officer, COO, Consumer and Public Affairs Unit, Client Services and many more.

Product team members also provided insight into challenges organizations have integrating UX into their hierarchies. 30% of respondents indicate that user experience currently reports to the Engineering or Development function. But when asked where UX should report to be most effective, survey respondents by a wide margin pointed to product management or the Chief Product Officer. (More on this in an upcoming post!)

The Bottom Line

Product teams that successfully integrate user experience professionals into the product development process are more likely to perform at a high level.

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Stand-Up Frequency Matters and Significantly Impacts Performance

Survey respondents were asked the following question “How effective are stand-ups in your organization?” Here is what they told us.

When asked to share their experiences with stand-ups, product team members clearly value well run and regularly conducted stand-ups. Forty percent of respondents report that regularly conducted stand-ups are an effective cornerstone of the product development process.

These best-in-class organizations are followed by another 41% that report stand-ups are effective, but not conducted on a regular basis. Unfortunately 19% of survey respondents indicate that stand-ups are either ineffective or contentious and a waste of time.

Reflecting back on findings from past studies, we know that 20% of product teams report issues with cross-functional hand-offs and transitions. Analysis from the 2013 study revealed that while some hand-offs are more problematic than others, poor hand-offs and transitions are responsible for degradation in team performance.

Conclusion: True

The regression analysis demonstrates that stand-up meetings are vital to effective product team communication and help eliminate or reduce issues that impede high performance. It also shows that product teams that invest the time and energy necessary to make stand-ups both effective and part of their daily routine will see significant performance benefits.

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What Survey Respondents Told Us in 2015

As in prior years we asked global survey respondents the following question “Which of the following methodologies best describes the way your organization develops products?” Here’s what they told us this year.

43% of survey responders – by far the highest percentage – indicate that their company utilizes a Blended approach to product development that combines both Waterfall and Agile methodologies. Agile/Scrum is the second most recorded answer, representing slightly more than a fourth of responses at 25.9%. Waterfall, with 13.6% of responses, is a trailing third. Nearly as many respondents (10.6%) indicate they did not know the methodology their organization employs in the development of products. Kanban, representing just 3.2% of responses, came in last among preferred methodologies listed.

2015’s Findings Broke A Historical Trend Line

This was the very first time that we saw an ebbing of market share for Agile product development methodologies which had been on the rise since 2012. It was also the very first time we saw Waterfall gain share. Interestingly, Blended methods remained virtually unchanged and largely consistent, in terms of responses, since 2013. It will be interesting to see if this deviation from the trend is sustained in next years market research!

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