Business Strategy | A Framework for Discovery
Business Strategy, when done correctly, provides a framework for decision making throughout an organization. It informs decisions from the C-suite down to the front-line worker. For the Product Team, this means that it is a fundamental part of their work. They are tasked with discovering what will truly deliver value to their users. Properly applied, the Business Strategy provides a framework for this discovery.
I recently published an article, The Miracle of the Product Requirements Hierarchy. In it, I outline in great detail the Product Requirements Hierarchy.
The Hierarchy, in all its simple glory
- Business Requirements
- User Requirements
- Solution Requirements (Functional & Nonfunctional)
- Transition Requirements
The order of the Hierarchy certainly sparked some trepidation to those who have a user-first mindset, given that Business Requirements are prioritized above User Requirements. I received a reply to this article which summed up the concern perfectly.
“Interesting article. How do you think putting business needs first can help the business success? Isn’t it all based on the users and what they need. Aren’t the users driving the business trajectory?”
This is such an amazing question. The truth is that the question is absolutely correct in its logic. The majority of Product Management literature propounds this user-first mentality, but they don’t emphasize strongly enough the nuance that Business Strategy provides in guiding the Product Team’s efforts. Yes, user needs are driving business trajectory to some degree and they even inform strategic intents of the organization. But Business Strategy, which is what I define Business Requirements to be, is much larger than the user’s needs for features and functionality. Melissa Perri, in her book Escaping the Build Trap, puts it best when she describes Business Strategy as a framework that helps you make decisions.
“Good strategy isn’t a detailed plan. It’s a framework that helps you make decisions… A good strategy should transcend the iterations of features, focusing more on the higher-level goals and vision. A good strategy should sustain an organization for years. ” — Melissa Perri, Escaping the Build Trap
The framework that Business Strategy provides informs the user research process, giving the Product Team a structure to work within. This is mainly what puts it above User Requirements in the Product Requirements Hierarchy. It tells us how we should conduct our research, and the constraints the business must meet in order to survive and continue delivering value to its users.
Gibson Biddle, who was a VP of product at Netflix from 2005 to 2010, talks about aligning his team around a common guideline for evaluating its product strategy. That guideline was to “delight customers, in margin-enhancing, hard-to-copy ways.” He set goals that would accomplish this and would help Netflix execute on the company vision around key initiatives, including personalization, instant access to entertainment, and ease of use. — Melissa Perri, Escaping the Build Trap
If we take Netflix as an example, Biddle’s Business Strategy is setting the framework for the Product Team to conduct user research and deliver on user needs. He is effectively giving the team the research prompt: Find ways to delight our users which are also going to gain us margin, and which are difficult for our competitors to copy. He is still giving the Product Team full freedom to meet the user’s needs in creative ways which are driven by their research, but is setting constraints that they must also gain margin and be difficult to copy.
The constraints are set in place to keep the company operating in its strategic niche. Companies who are driving for long term success in their market must stay focused within their realm of expertise. Jim Collins, in his book How the Mighty Fall, describes that companies need to ensure that their initiatives and expansions do not fail any of these three test:
1. Do they ignite passion and fit with the company’s core values?
2. Can the organization be the best in the world at these activities or in these arenas?
3. Will these activities help drive the organization’s economic or resource engine? — Jim Collins, How the Mighty Fall
Constraints set in the Business Strategy, help to ensure that the efforts of the business to meet the needs of their ever-evolving users don’t push them too far outside their strategic fit. That is how some businesses fail. The business still needs to ensure that it will be the best in the world at the products it is delivering.
So, Business Requirements come before User Requirements in the Product Requirements Hierarchy, not because user needs are not as important but because Business Strategy sets the framework for the Product Team’s discovery of the user’s needs. It helps the Product Team to conduct its research by giving them the prompt for discovery. It does set constraints on that discovery to ensure it fits the core competency of the business, but not to a degree which would inhibit free discovery of what users truly need. The Business Strategy is simply a framework for discovery.
Sources
Escaping the Build Trap: How Effective Product Management Creates Real Value
by Melissa Perri
How the Mighty Fall: And Why Some Companies Never Give In
by Jim Collins
