As product people, we love to build great things that delight our customers. Wouldn't it be great if that was our only responsibility? An important part of a product leader's role is annual planning; establishing a great vision and strategy for the coming year. I know it can be one of the most annoying, time-consuming, and painful parts of the duties but it is also a very important, high-stakes part. Why?

A compelling product vision and strategy are what differentiates good product leaders from great ones. Becky Flint writes “A strategic plan requires big picture mission and vision, data, team input, and creative solutions. This is why strategic planning typically involves almost half of the company, from execs to directors, managers, and teams.” “To avoid chaos,” she continues, “a common solution we see companies apply is to remove teams from the process. This can simplify the planning, however, it often results in out-of-touch plans that lack creativity and are harder to execute.” She offers a four step process for the process of creating a strong annual plan in her blog How to Lead Strategic Annual Planning to Achieve More With Less.

A compelling product vision and strategy are what differentiates good product leaders from great ones. Strategic planning typically involves almost half of the company, from execs to directors, managers, and teams. As Becky Flint, CEO of DragonBoat, notes in How to Lead Strategic Annual Planning to Achieve More With Less it’s important to involve individuals where they can have the highest impact. When the process is done right, it builds confidence with the board, other execs, your product teams, and frankly the entire company by providing direction and alignment.

Need some tips and tricks to do this successfully? I’ve got you covered!

Keep reading for what I believe are the important steps to craft an inspiring strategy and how to evangelize it throughout your company.

Where to start Data or Vision?

Well, the answer depends on where you are as an organization with establishing a growth strategy and tracking metrics around it. If you don’t have robust data, start small; if you do, be intentional and focused on which metrics you choose to inform your strategic decisions. Either way, you need a strong sense of where you want to go before you dive deep into data about where you are now. A strong combination of both will lead to understanding your options for achieving your goals.

This seems to be the right time to remind everyone that a vision is 3-5 years out and that there are three levels of vision related to the product. Each of them has different core metrics to monitor which inform annual planning.

Company Vision is measured by your North Star metric as well as ARR, NRR, EBITA, and overall NPS. Reviewing how the company performed last year against those will help set new goals for getting closer to the vision in the coming year.
Product Portfolio Vision is created by considering your annual product portfolio goals. How did the product portfolio perform last year? LTV, CAC and Churn could be good starting points to assess performance.
Individual Product Vision helps with focus. By narrowing in on the individual products that can help increase adoption, engagement, or NPS for example, and based on how the individual product performed last year.

I’ll assume you have a strong company vision and North Star metric (if you don’t read this and listen to this) When you are ready to set your Product Portfolio vision... Start here:

Steps to creating your vision:

Clarify and get alignment on how the product portfolio vision should help drive the company vision.
Create a product portfolio vision in collaboration with the CRO, CMO, and CSO with associated North Star.
Select the biggest problems standing in your way of achieving your vision which you can potentially improve in the upcoming year.

Read Steps to Setting a Vision for more tips and concrete examples to guide you in this process.

Steps to Understanding your Current State with Data:

Define the key metrics which will surface strengths and opportunities for improvement.
If you’re focused on revenue it should be new business ARR, net retention revenue, close rate, and time to recognize revenue
If churn and retention are the focus, be sure to deep dive into how product engagement metrics are associated with customer satisfaction and churn.
Segment all data based on geography, customer groups, tenure of the customer, size of the customer, and anything else which is crucial to the way your company thinks about grouping its users.
Leverage the data to identify the biggest opportunities to include in your overall portfolio and individual product strategies.

Read Defining your Current State for more tips and concrete examples of evaluating the current state.

Steps to Choose a Strategy:

Review the 16 Strategies for Growth to ensure you explore all options.
Establish a scoring and voting protocol to evaluate the different options available.
Prioritization-Area of Focus: Work with leaders in your organization for alignment around the top priority problems including what not to focus on.
Choose which strategy is aligned with your vision, goals, and current state.

Read for more tips and concrete examples of Generating Ideas and selecting an Overall Strategy.

Steps to Deploy/Evangelize Your Strategy:

Establish themes related to the set vision, goals, and focus areas for this year and share them with the individual product teams. You may be using OKRs for this, but product key results are often delayed.
Allow the product managers to create more precise goals for their teams and to generate outcome and feature-driven roadmaps for their products for the upcoming year.
Consolidate the most strategic items into a portfolio-level roadmap for the exec team and internal stakeholders. Share it with smaller groups so that you can iterate based on feedback and get buy-in before sharing widely with the board and customers. (This is important!)
Evangelize the established goals and themes throughout the company and make sure to communicate this will continue to be revisited throughout the year as progress is made.

Read more about Outcome and Feature Driven Roadmaps as well as How to Broadcast Them.

What's Next???

Now that you’ve established and promoted your annual plan based on the set vision and current state, it’s up to you as a Product Leader to empower the product team to reach the goals you’ve set. Ensure that they have enough time to invest in customer discovery, building prototypes for testing, and solution validation and that they are involving the whole balanced team in these activities.

Remember, annual planning is a snapshot in time…then the real work of execution starts! During the coming year, it is your responsibility as a Product Leader to push the product managers to always be working on the most valuable items and to help them navigate when plans need to shift based on market changes or new information. Good luck and stay tuned for more helpful tips on how to do that.

Hi! I’m Tami, the founder of The Product Leader Coach where I work with product leaders and teams to realize their potential by focusing on their strengths.

If you enjoyed this post, I am available for product leadership coaching or team training. Learn more about my services and upcoming children’s book.