What Is Product Strategy? How to Think and Act Strategically as a Product Leader
Let’s get something out of the way.
A roadmap is not a product strategy.
Shipping features faster isn’t a product strategy.
And having “AI,” “platform,” or “mobile-first” in your slide deck? Still not a strategy.
Real strategy—especially in product—starts with clarity. Not ambition.
Strategy Means Making Hard, Smart Choices
Richard Rumelt, in his book Good Strategy/Bad Strategy, describes good strategy as a coherent mix of policy and action designed to surmount a high-stakes challenge.
It’s not a list of goals. It’s not a bundle of aspirations.
It’s a disciplined way of diagnosing the problem that matters most, choosing an approach, and committing to a focused set of actions.
And that’s exactly what great product strategy does.
So, What Is Product Strategy?
At its core, product strategy is this:
A structured way of identifying the most valuable customer problem, deciding how you’ll solve it differently, and executing a coherent set of product bets to win.
This means saying no.
This means learning fast.
This means aligning product work with business outcomes—and user value.
Let’s break that down using Rumelt’s timeless three-part framework.
1. Diagnosis: What’s the Problem?
You can’t design a good product strategy without first identifying the right problem.
This means digging deep into customer behaviour, market shifts, and friction points.
You’re not guessing. You’re observing.
“Churn is rising among new users due to onboarding drop-off.”
“Usage frequency has flattened. The product isn’t sticky.”
“We’re being commoditised. No one knows what makes us unique.”
No vision statement matters if you don’t know what’s broken.
Great product teams diagnose like doctors. They look for the real cause, not just the surface symptoms.
2. Guiding Policy: What’s Your Unique Approach?
Once the diagnosis is clear, it’s time to define the strategic lens.
This is your point of view on how you’ll win.
Not “we’ll build more features.” Not “we’ll serve everyone.”
Instead, something like:
“Being the easiest-to-start analytics tool for early-stage teams.”
“Differentiate through radical personalisation.”
“Becoming a self-serve, enterprise-grade API.”
The guiding policy creates focus.
It gives your teams a filter for what matters—and what doesn’t.
3. Coherent Actions: What Are You Actually Going to Do?
Here’s where strategy turns into reality.
Coherent actions are the bets you place that directly support your guiding policy.
They’re not random experiments. They’re not feature requests from sales.
They’re tightly aligned product initiatives.
Want to reduce onboarding friction? Build guided tours. Strip out optional steps. Add in-product help.
Want to differentiate with personalisation? Invest in a recommendation engine. Build user behaviour models. Design flexible UI components.
This is where strategy becomes tangible. Actionable. Testable.
Four Strategic Anchors Every Product Strategy Needs
Want to build a strategy that scales? Ground it in these four anchors:
1. Target Audience & Problem Space
Who are you for? What job are you solving?
2. Differentiation Strategy
Why should anyone pick you over the next tool? What’s your edge?
3. Strategic Bet Areas
What big initiatives will move you closer to your vision?
4. Metrics That Matter
Are you tracking the right signals—not just outcomes, but early indicators?
This framework connects product thinking to real-world results.
It’s not about buzzwords. It’s about traction.
Strategy Is a System, Not a Slide Deck
Product strategy isn’t something you present once a quarter.
It’s something you live every week—through the problems you choose to solve, the experiments you prioritise, and the trade-offs you defend.
Tools like continuous discovery (à la Teresa Torres), outcome-oriented roadmaps, and strategic bets aren’t strategy replacements.
They’re your strategy operating system.
When used well, they turn theory into a team-wide habit.
Common Pitfalls (a.k.a. Bad Strategy in the Wild)
Most “strategies” fall flat for one of three reasons:
No diagnosis. They skip the real problem and jump straight into action.
No coherence. Every team is doing something different, chasing their own KPIs.
No commitment. The moment someone important says “Can we just add this one thing?”—focus evaporates.
Bad strategy is reactive.
Good strategy is resilient.
You Know You Have a Good Product Strategy When...
Everyone on your team can explain it clearly.
It makes hard choices easier.
It evolves—but never loses its focus.
You can say “no” to 80% of what gets asked.
Because a good product strategy doesn’t chase everything. It commits to something.
The Real Job of a Product Leader
Your real job isn’t building the product.
It’s building the conditions for your product to learn faster than the market changes.
And that starts with strategy.
Not just a plan.
Not just a pitch.
But a living, breathing system for making the right decisions—consistently.