Product strategy and organization strategy in terms of systems engineering
Ivan Podobed, Director of Game Platform at Awem, spoke about the strategy in terms of systems engineering. It will be useful to everyone who wants to understand the basic concepts of building a product strategy and organization.
I often came across the concept of “strategy” during the career of a decision architect and was skeptical about it: a strategy usually understood too different and contradictory frameworks, ideas, and descriptions. Each organization collected and adapted them for itself in the hope that it would guess with a “set”. But what could be common, for example, in the strategy of the blue ocean, SWOT, and the five forces of Porter? Then I got acquainted with systems engineering, and there I found a clear and reasonable (and most importantly, practically applicable and useful) explanation of what a strategy is and why it is needed.
I tried in practice working with a strategy in my organization and exchanged ideas on this topic with friendly companies. As a result, I want to share my thoughts on why a product and organization strategy is needed, how they are connected and how to work with them in terms of systems engineering.
The terms that I will use are taken from systems engineering - this is a body of knowledge and principles about creating complex engineering systems.
All artificial systems that people create to meet someone’s needs are engineering systems. This definition covers all products that are developed and developed by companies and, in particular, product managers.
Companies are also systems that are created to meet someone’s needs. Usually this is the need of the founder, who wants to create a good product and builds an organization for this.
Any strategy is all important system requirements. For example, important requirements for a product are a product strategy, important requirements for an organization are an organizational strategy. These strategies are closely related.
Suppose your product has an important requirement "to have the best ergonomics in your niche", which dictates the choice of priorities and implementation method. This is already a product strategy, and it can be input to an organization’s strategy. For example, you will have to create or highlight some team that will be engaged in research in the field of ergonomics.
How to understand which requirement is important and which is not? Very simple: it can be measured in time and money.
For example, if there is a requirement “the organization must test ten hypotheses per week”, you begin to gain resources - people and tools. You must understand how much time and money this or that decision will take.
A few more terms from systems engineering. The target system is the product, and an important requirement for the target system is the product strategy. A supersystem is a market segment that comes into contact with a particular product, that is, all its users, competing products, all processes in which it is involved.
When you understand how the product will be used, you can highlight important product requirements. If you connect the supersystem (market) and the target system (product), then you can easily identify important requirements for the organization (system in support). An organization’s strategy is always a derivative of a product’s strategy — no one has yet managed to defeat Conway’s law .
Important product requirements are not the requirements that you get from customer interviews. The customer says what he thinks about the current moment and in the current context. Strategy is always about the future and important requirements for the future: how the product will be used when the world changes.
Product managers do not have to fulfill customer wishes. They must market products to meet their needs. You are unlikely to find these needs in the heads of users - they must be sought in the market. Most often, products replace some processes - or make them more convenient, fast, interesting.
Another issue worth mentioning is how strategy relates to mission and vision. The mission is how you want to see the supersystem (market): for example, Apple wanted every family to have a personal computer. Vision is how you see your organization as a result of implementing strategies.
Under Conway’s law, the structure of a product always reproduces the structure of an organization — and therefore successful organizations adjust their device to what should be the right product, and not vice versa. Traditional organizations, which first build their structure, and then try to “marry” it with the structure of the product, usually experience many problems. Flexible companies that learn to change the structure and processes to meet the needs of product development are more successful.
Organizational strategy, as a derivative of the grocery, is equally important. You need to work with it no less scrupulously, because your clients will not be abstract users, but employees. For example, your strategy may be focused on the development of creatives, while production may feel undeservedly forgotten. You will need to show empathy, because organizational strategy is always organizational change and a clash with the inertia of people.
The important requirements for the product and the organization correctly conveyed to the team help reduce uncertainty, make decisions more efficiently and quickly, and increase people's involvement in the work. That is, they directly contribute to the culture.
Building a culture through strategy is an interesting way to build good companies. But this is not part of systems engineering, which considers people through their roles: the role of an engineer, the role of a product manager, the role of a marketer, etc. These roles have their own functions, and you can design an organization based on them.
Culture is a “lubricant” between roles. For example, your role is a marketer, but you noticed a bug in the product. Culture tells you, “Tell the team to be repaired faster,” but this is not directly your part. Therefore, culture cannot be “engineered”, but at the same time, it greatly affects the organization’s productivity.
Lack of strategy is always an illusion. Most likely, someone has a strategy in their head (usually the founder), but for others it is incomprehensible or inaccessible. Only on the ability of the founder to convey and justify the strategy does the impression depend on whether there is a strategy or not. Everything is much more complicated if the company is managed by a board of directors or another collegial body - then everyone can pull the blanket over themselves.
You can conditionally do without a strategy if there is a highly centralized power or a small company. If it seems that there is no strategy, but in fact someone makes decisions, then someone definitely has a strategy in his head. It is important to get it out of your head (or out of your head) and discuss it with key people.
Take part in a company strategy study. We conduct a short survey to understand:
We will share the results of the study with everyone. The data will be anonymous and generalized - with their help you can compare your problems with strategy with the problems of other companies.
Learn more about the study and take the survey.
I often came across the concept of “strategy” during the career of a decision architect and was skeptical about it: a strategy usually understood too different and contradictory frameworks, ideas, and descriptions. Each organization collected and adapted them for itself in the hope that it would guess with a “set”. But what could be common, for example, in the strategy of the blue ocean, SWOT, and the five forces of Porter? Then I got acquainted with systems engineering, and there I found a clear and reasonable (and most importantly, practically applicable and useful) explanation of what a strategy is and why it is needed.
I tried in practice working with a strategy in my organization and exchanged ideas on this topic with friendly companies. As a result, I want to share my thoughts on why a product and organization strategy is needed, how they are connected and how to work with them in terms of systems engineering.
What is a strategy?
The terms that I will use are taken from systems engineering - this is a body of knowledge and principles about creating complex engineering systems.
All artificial systems that people create to meet someone’s needs are engineering systems. This definition covers all products that are developed and developed by companies and, in particular, product managers.
All man-made artificial systems are engineering systems.
Companies are also systems that are created to meet someone’s needs. Usually this is the need of the founder, who wants to create a good product and builds an organization for this.
Any strategy is all important system requirements. For example, important requirements for a product are a product strategy, important requirements for an organization are an organizational strategy. These strategies are closely related.
Suppose your product has an important requirement "to have the best ergonomics in your niche", which dictates the choice of priorities and implementation method. This is already a product strategy, and it can be input to an organization’s strategy. For example, you will have to create or highlight some team that will be engaged in research in the field of ergonomics.
How to understand which requirement is important and which is not? Very simple: it can be measured in time and money.
Important (architectural) requirements are those that have a high cost and resource intensive implementation.
For example, if there is a requirement “the organization must test ten hypotheses per week”, you begin to gain resources - people and tools. You must understand how much time and money this or that decision will take.
Solutions that are not worth the time and money should not be included in the strategy.
Principles of building a strategy
A few more terms from systems engineering. The target system is the product, and an important requirement for the target system is the product strategy. A supersystem is a market segment that comes into contact with a particular product, that is, all its users, competing products, all processes in which it is involved.
In what processes, at what moments of life, and by whom is the product used - this is the supersystem from which the product strategy is born.
When you understand how the product will be used, you can highlight important product requirements. If you connect the supersystem (market) and the target system (product), then you can easily identify important requirements for the organization (system in support). An organization’s strategy is always a derivative of a product’s strategy — no one has yet managed to defeat Conway’s law .
Important product requirements are not the requirements that you get from customer interviews. The customer says what he thinks about the current moment and in the current context. Strategy is always about the future and important requirements for the future: how the product will be used when the world changes.
Product managers do not have to fulfill customer wishes. They must market products to meet their needs. You are unlikely to find these needs in the heads of users - they must be sought in the market. Most often, products replace some processes - or make them more convenient, fast, interesting.
Another issue worth mentioning is how strategy relates to mission and vision. The mission is how you want to see the supersystem (market): for example, Apple wanted every family to have a personal computer. Vision is how you see your organization as a result of implementing strategies.
Organization Strategy
Under Conway’s law, the structure of a product always reproduces the structure of an organization — and therefore successful organizations adjust their device to what should be the right product, and not vice versa. Traditional organizations, which first build their structure, and then try to “marry” it with the structure of the product, usually experience many problems. Flexible companies that learn to change the structure and processes to meet the needs of product development are more successful.
Flexibility is not about how to “bend right or left” as you wish, but how to quickly and actively adapt your organization to new strategies and products.
Organizational strategy, as a derivative of the grocery, is equally important. You need to work with it no less scrupulously, because your clients will not be abstract users, but employees. For example, your strategy may be focused on the development of creatives, while production may feel undeservedly forgotten. You will need to show empathy, because organizational strategy is always organizational change and a clash with the inertia of people.
The impact of strategy on culture
The important requirements for the product and the organization correctly conveyed to the team help reduce uncertainty, make decisions more efficiently and quickly, and increase people's involvement in the work. That is, they directly contribute to the culture.
Building a culture through strategy is an interesting way to build good companies. But this is not part of systems engineering, which considers people through their roles: the role of an engineer, the role of a product manager, the role of a marketer, etc. These roles have their own functions, and you can design an organization based on them.
Culture is a “lubricant” between roles. For example, your role is a marketer, but you noticed a bug in the product. Culture tells you, “Tell the team to be repaired faster,” but this is not directly your part. Therefore, culture cannot be “engineered”, but at the same time, it greatly affects the organization’s productivity.
Without the right culture, there will be no flexibility, no matter how you try to “engineer” the organization.
If there is no strategy
Lack of strategy is always an illusion. Most likely, someone has a strategy in their head (usually the founder), but for others it is incomprehensible or inaccessible. Only on the ability of the founder to convey and justify the strategy does the impression depend on whether there is a strategy or not. Everything is much more complicated if the company is managed by a board of directors or another collegial body - then everyone can pull the blanket over themselves.
You can conditionally do without a strategy if there is a highly centralized power or a small company. If it seems that there is no strategy, but in fact someone makes decisions, then someone definitely has a strategy in his head. It is important to get it out of your head (or out of your head) and discuss it with key people.
findings
- All man-made artificial systems are engineering systems. Strategy is all important system requirements.
- The strategy should include only those solutions that can be measured by time and money.
- To build a product strategy, you need to understand how it will be used. Then you can highlight the important requirements for the product and through them determine the important requirements for the organization.
- Mission is how you want to see the market. Vision is how you see the organization when the strategy is implemented.
- Conway’s law says that the structure of a product always follows the structure of an organization. But there is also a “reverse Conway maneuver” that allows you to do “the opposite .”
- The strategy helps to motivate and engage the team, that is, directly affects the culture of the organization.
- Lack of strategy is an illusion. Usually, a strategy needs to be pulled out of someone’s head (for example, a founder) or goals (for example, a board of directors).
Will be useful
- The textbook " Systemic Thinking " A.I. Levenchuk.
- A free course in systems thinking at Coursera.
- An article by Ivan Podobed about system engineering.
- Make sense podcast with Ivan Podobed.
Take part in a company strategy study. We conduct a short survey to understand:
- what knowledge about the strategy is lacking for the founders, top management and product managers;
- what understanding of the strategy do product team members need in order not to lose motivation.
We will share the results of the study with everyone. The data will be anonymous and generalized - with their help you can compare your problems with strategy with the problems of other companies.
Learn more about the study and take the survey.
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