Strategic Capability: How to Actually Develop It When No One Will Teach You (Part 2 of 2)

Hey there,

Last week I argued that when engineering accelerates and product "falls behind," the pressure to "speed up PM" solves the wrong problem. The real issue isn't speed—it's that AI's compression of tactical work is exposing how unclear we've been about where PM value actually comes from. If tactical coordination was never supposed to be the core value, then engineering acceleration isn't a matching problem. It's a role clarity problem.

And if the role is supposed to be strategic, that creates an uncomfortable question most organizations have been avoiding: Do your PMs actually know how to do strategic work? And if not, how do you develop that capability when you never invested in building it systematically?

Several of you wrote back with exactly that question: "Okay, but HOW? How do you actually develop strategic capability when we never built it in the first place?"

Fair question. Let me answer it.

But first, I need to address something that came up in the LinkedIn discussion.

Several engineers responded to Part 1 saying I positioned engineering as purely tactical when it's fundamentally strategic work. You're right. I oversimplified.

Engineering IS strategic—architecture decisions, systems thinking, technical trade-offs that shape what's possible. This piece focuses on PM strategic capability not because it's the ONLY strategic work that matters, but because it's the strategic work most at risk of disappearing. When tactical PM work compresses, organizations default to "let engineers handle it" rather than elevating PM to strategic work.

That's the crisis we're solving here. Your strategic work matters too. This just isn't the piece about developing it.

Now, back to the question.

I was talking with a CPO recently about developing strategic thinking in her PM team. She said something that surprised me: "I have never cracked the how do you coach that, train that, or hire for it. I'm still in a position of it comes out of my brain to them."

She's not alone. A CEO once told me: "You can't teach people to think innovatively like that."

This belief—that strategic thinking is somehow innate, mystical, unteachable—is pervasive. And it's complete nonsense.

I teach strategy at University of Washington and Seattle University. Every quarter, I watch undergrads and MBA students develop strategic thinking capability systematically. Not because they're uniquely gifted. Because strategic thinking, like any other cognitive skill, can be taught when you break it down into learnable components.

The reason it SEEMS unteachable, I believe, is more subtle than just lack of investment. It's that strategic thinking is a way of thinking—and unless you understand the mechanics of how it works, from the outside it just looks like regular thinking.

When I graduated from engineering school, I noticed something odd. I thought about problems differently than my non-engineering friends, but not differently than my engineering peers. Four years of rigorous coursework had taught me a cognitive framework I couldn't articulate but definitely possessed. Years later, my MBA did the same thing—gave me another set of tools for analyzing and deciphering the world.

That's what makes strategic thinking feel mystical. It's not a skill you do, it's a lens through which you see. And teaching someone to see differently feels impossible until you break down the components of that vision into learnable frameworks.

Most organizations never invested in teaching it because they didn't realize there was anything concrete to teach. They assumed strategic thinking would emerge organically from years of tactical work. Spoiler: it doesn't.

You don't become a strategic thinker by writing user stories faster. You become a strategic thinker by practicing strategic thinking with feedback, frameworks, and deliberate development. Organizations that never created space for that practice now wonder why their PMs can't do strategic work.

The problem isn't that strategic thinking can't be taught. The problem is we never built the systems to teach it.

Let me be specific about what systematic capability development looks like. Not theory. Actual components.

You can't develop what you can't assess. And most organizations have no idea how to evaluate strategic capability. They use proxies: years of experience (doesn't predict strategic thinking), domain expertise (helps but isn't sufficient), credentials (mostly irrelevant), or—my personal favorite—"you know it when you see it" (which means you don't actually know it).

Here's a diagnostic question: Can you articulate what strategic product work looks like in your organization? Not what it SHOULD look like. What it actually looks like when done well.

If you can't answer that specifically, you don't have an assessment framework. You have vibes.

I developed the Six Personas of Product Leadership framework to articulate what I had to learn through years of mistakes—all the different roles a product leader must embody to succeed. I got promoted from individual contributor to manager of product managers four times in my career and was never told I needed to do anything differently. So I figured it out the hard way.

But what that framework also did was make strategic capability assessable. It gave us language for what was previously just "you know it when you see it." It breaks down leadership into distinct, learnable skill clusters:

These aren't personality types. They're learnable skill clusters. When I assess a PM's strategic capability, I'm evaluating: Which of these can they do well? Which are development areas? What's the gap between current capability and role requirements?

That's assessable. That's developable. That's how you move from "it comes out of my brain to them" to systematic capability development.

Strategic thinking requires depth. You can't develop it in the gaps between meetings.

In 2007, I implemented Product Management Day for my team. Every Wednesday, the entire product team worked from home or coffee shops. Their out-of-office messages said: "Today is Product Management Day. I'm doing focused strategic work. I'll check email at 11:30 and 4:30."

It was controversial. I got called into the CEO's office. Twice. It almost got me fired.

What I learned from that experience was: Organizations don't trust invisible work.

A PM spending four hours analyzing competitor pricing models or synthesizing customer feedback patterns across six months—that doesn't produce immediate artifacts. It looks unproductive to people who judge productivity by responsiveness and visible coordination.

So I required each PM to send me a brief note at end of day—just a sentence or two about the strategic work they focused on. Not detailed status reports. Just enough to make invisible work legible.

Examples of what they sent:

Those notes weren't accountability. They were translations of invisible strategic work into organizational currency.

I wasn't checking if they were working. I was creating air cover so they COULD work strategically.

If you want to develop strategic capability, you need protected time to practice strategic thinking. Not "when you have time." Not "in addition to everything else." Protected. Recurring. Non-negotiable.

Most organizations won't do this. They'll say "that sounds nice but we're too busy" which really means "we don't actually value strategic work enough to make space for it."

Strategic thinking improves through feedback loops. But most organizations provide feedback on tactical execution (did you ship on time?) not strategic judgment (was that the right thing to ship?).

This is where frameworks become essential. The Six Personas give you language to discuss strategic work: "Your Vision Translator work on connecting strategy to execution was strong, but your Political Navigator instinct about stakeholder dynamics was off. Here's what you missed..."

That's specific. That's actionable. That's how people develop capability.

I also use case studies extensively in my Strategy courses—not just to teach concepts, but to create low-stakes practice environments. Students analyze real business situations, make strategic recommendations, get feedback on their reasoning, iterate. They're building judgment muscle in situations where wrong answers don't cost the company millions.

Here's a diagnostic question for your organization: When was the last time a PM got substantive feedback on their strategic judgment rather than their execution effectiveness?

If you can't remember, you're not developing strategic capability. You're just hoping it appears.

A reader who commented on Part 1 made a crucial distinction about AI maturity levels. Most organizations operate at "Task-Based AI"—individuals using chatbots for isolated tasks with no infrastructure investment. They want "Workflow-Level" results—20-35% productivity gains—but won't build the enablement infrastructure required.

The same gap exists for strategic capability development. Organizations want strategic thinking but won't build the infrastructure that enables it.

What infrastructure means:

Without this infrastructure, strategic thinking becomes individual heroics rather than organizational capability. That CPO I mentioned—"it comes out of my brain to them"—doesn't have an infrastructure problem. She IS the infrastructure. Which doesn't scale.

Here's where this gets interesting. AI can actually help develop strategic capability, but only if you use it correctly.

I created a custom GPT for my Strategy students that acts as a tutor. I loaded the textbook (open educational resource) and my lecture slides, but I instructed it specifically to emphasize learning rather than just providing answers. When students ask questions, it doesn't just give them the answer—it asks leading questions that help them generate their own insights. It guides them through reasoning processes rather than handing them conclusions.

That's AI as learning accelerator. It compresses the feedback loop. It provides scaffolding for strategic thinking practice. It makes expertise more accessible while ensuring students still do the cognitive work that builds capability.

But—and this matters—it only works because I built systematic learning frameworks first. Students learn what makes good strategy (diagnosis, guiding policy, coherent actions), practice applying frameworks to analyze industries and companies (external analysis, internal analysis), develop their understanding of strategic options (business-level and corporate-level strategies), and wrestle with real business cases throughout. The AI doesn't replace that structured progression—it amplifies it by providing on-demand coaching when students get stuck.

The AI amplifies good pedagogy. It doesn't replace it.

The same principle applies in organizations. AI can help PMs practice strategic thinking:

But this requires treating AI as a learning tool, not an answer machine. Most organizations will fail at this distinction.

Before you can develop strategic capability systematically, you need to confront your current state honestly. Here are the forcing questions:

1. Can you articulate what strategic product work looks like in your organization?

Not what it should look like. What it actually looks like when done well. If you can't describe it specifically, you can't assess it or develop it.

2. Do you have any PMs who consistently do strategic work?

If yes: How did they develop that capability? (Probably not through your systems—they likely arrived with it or developed it despite your systems.)

If no: Why not? What's preventing strategic work from happening?

3. What would happen if a PM spent a full day doing pure strategic thinking work with no visible output?

Would that be celebrated or questioned? Your honest answer reveals whether the organization actually values strategic work or just says it does.

4. When you evaluate PM performance, what percentage is based on strategic judgment vs. tactical execution?

If it's mostly tactical metrics (velocity, feature delivery, sprint goals hit), you're measuring what you're getting, not what you need.

5. When was the last time a PM got substantive feedback on their strategic judgment?

Not "good job on that launch" but "here's what you got right and wrong about the strategic reasoning behind that decision, and here's how to improve your judgment."

6. If you had to hire 10 strategic PMs next month, how would you assess whether candidates have strategic capability?

If your answer is "years of experience at good companies," you're using a proxy that doesn't predict strategic thinking. You don't have an assessment framework.

These aren't rhetorical questions. They're diagnostic. If you can't answer them confidently, you don't have the foundation for systematic capability development. You're hoping strategic thinking emerges magically.

It won't.

Let me make this concrete with a real example from my own teaching.

In my Business Strategy course, students analyze real company cases—LEGO's dramatic turnaround from near-bankruptcy, Netflix's content strategy shift, Tesla's vertical integration decisions. They're not just learning theories; they're practicing strategic judgment.

Here's how the practice structure actually works:

Building the analytical toolkit systematically: Students learn frameworks in a deliberate sequence. First, what makes good strategy: diagnosis, guiding policy, coherent actions. Then external analysis frameworks (PESTEL, Five Forces, strategic groups) and internal analysis tools (VRIO, value chain). These become the diagnostic instruments.

Next, strategic options: business-level strategies (cost leadership, differentiation, innovation strategies, Blue Ocean), then corporate-level strategies (diversification, vertical integration, organizational structures). These inform guiding policy and coherent actions.

Finally, ethics in corporate strategy—because strategic decisions have consequences.

Case studies running throughout: Every few lectures, students analyze a new case. They come to class having read it, applied relevant frameworks, formed hypotheses about what the company should do. Then we discuss. Not "here's what they did"—though sometimes that's revealed—but "given this diagnosis, what strategic options make sense?"

Students defend their reasoning. Challenge each other's analyses. Discover gaps in their framework application. Learn that strategic thinking isn't about being right every time—it's about developing judgment that's right more often than random chance.

The feedback mechanism: I provide feedback not just on conclusions but on reasoning. "Your Five Forces analysis missed supplier power—here's why that matters for your recommendation." "Your VRIO framework identified the right resources, but you didn't connect them to sustainable competitive advantage."

This is where capability develops—when students see HOW their strategic thinking succeeds or fails, not just WHETHER their answer matched mine.

Why this structure works: Notice what's happening: systematic framework development, repeated practice with increasing complexity, and feedback on strategic reasoning itself.

That's not magic. That's instructional design. The same principles apply to organizational capability development.

Of course you're not running a ten-week course for your product team. But you CAN create practice structures:

Most organizations won't do this. They'll say "we don't have time" which really means "we don't value this enough to prioritize it."

I just gave you a systematic approach to developing strategic capability. Assessment frameworks, protected practice time, feedback mechanisms, enabling infrastructure, AI as learning accelerator.

Unfortunately, most organizations won't implement any of it. Not because it's impossible. Because it's uncomfortable.

Developing strategic capability requires:

Accepting short-term productivity dips. When you protect time for strategic thinking, tactical output temporarily decreases. That looks like regression to executives measuring velocity.

Trusting invisible work. Strategic thinking doesn't produce immediate artifacts. Organizations that judge productivity by visible coordination can't handle this.

Changing evaluation systems. You can't develop strategic capability while measuring success through tactical metrics. But changing performance management systems is politically fraught.

Investing resources with unclear ROI. "Spend money training people in strategic thinking" is a harder sell than "reduce headcount and capture cost savings."

Admitting current capability gaps. If strategic thinking is what matters and most of your PMs can't do it, you have to confront: Did you hire wrong, or did you never develop the capability? Both answers are uncomfortable.

The easier path is obvious: reduce headcount, keep the PMs who already think strategically (probably the ones who developed it elsewhere), hope you can continue hiring "fully formed" strategic thinkers.

That's what most organizations will do. They'll treat strategic capability as something you acquire through hiring rather than something you develop systematically.

What's more troubling: Some organizations won't even take that path. They'll just keep PMs focused on tactical work because that's what they actually value. They'll say they want strategic thinking while their systems reward velocity, responsiveness, and keeping engineering fed with specs.

These organizations aren't confused about capability development—they've made a choice about what product management should be. They want tactical coordinators who move fast, not strategic thinkers who might slow things down to think deeply. AI's compression of tactical work won't change their minds. They'll just expect fewer PMs to coordinate faster.

For organizations that DO value strategic capability but won't invest in developing it: You'll face a tight market for strategic talent. Experienced strategic PMs become expensive and scarce. You compete with everyone else for the same small pool. And when you finally hire that strategic PM, they don't know your business, your customers, or your organizational dynamics. It takes months before they're effective—if they stay that long.

Nothing wrong with hiring external strategic talent when you need it. But if that's your ONLY strategy for building strategic capability, you're always playing catch-up. You never develop the organizational muscle to grow strategic thinking internally.

That's the real risk: not just that you won't develop strategic capability, but that you'll cement tactical thinking as your product culture while competitors invest in building something deeper.

The organizations that succeed at this won't be the ones who made PMs faster. They'll be the ones who got serious about systematic capability development.

Here's what that looks like:

They'll answer those diagnostic questions honestly. Not with aspirational rhetoric about "we value strategic thinking." With brutal clarity about current capability gaps and organizational barriers.

They'll build assessment frameworks that recognize strategic work. Using something like the Six Personas or developing their own frameworks that make strategic capability visible and measurable.

They'll create protected time for strategic practice. Not "when you have bandwidth" but structured, recurring, non-negotiable space for strategic thinking.

They'll provide substantive feedback on strategic judgment. Not just "good job" or "missed the target" but specific coaching on strategic reasoning that improves judgment over time.

They'll build infrastructure that enables strategic work. Knowledge systems, integration layers, quality frameworks, governance structures that make strategic thinking organizational capability rather than individual heroics.

They'll use AI to accelerate learning, not replace thinking. Treating AI as a tool that compresses feedback loops and provides scaffolding for practice, not an answer machine that eliminates the need for judgment.

They'll accept short-term productivity dips. Because they understand that the alternative—tactical speed without strategic direction—leads to shipping faster toward the wrong destination.

These organizations will have massive competitive advantage while others are still arguing about whether PMs should be faster.

Part 1 laid out the false choice between speed and strategy. AI compression of tactical work doesn't mean PMs need to be faster—it means the role needs clarity about where value actually comes from.

This piece gave you the systematic approach to developing that capability. Assessment frameworks, protected practice, feedback mechanisms, enabling infrastructure, AI as learning accelerator.

Now you have a real choice:

Option 1: Ignore all of this. Reduce PM headcount, capture cost savings, hope you can hire strategic thinkers when you need them.

Option 2: Implement systematic capability development. Make the investments I described. Accept the short-term discomfort. Build organizational capability that becomes competitive advantage.

There's no Option 3 where strategic thinking emerges magically without investment.

The capability gap is real. AI compression is happening now, not in some distant future. Organizations that wait to invest will be too late—they'll be competing for scarce strategic talent while their competitors developed it systematically.

The choice isn't whether strategic capability matters. The choice is whether you'll build it deliberately or hope it appears magically.

It won't.

Break a pencil,

Michael

Want to see what this looks like in practice? Join me for a free Lightning Lesson on November 18th at 9:30am PT: "How to 'Be Strategic' When No One Will Teach You."

I'll be talking with a PM who successfully made this transition—someone who figured out how to position themselves as a strategic thinker. We'll cover what strategic work actually looks like, the concrete differences between strategic and tactical work, and specific methods to develop strategic capability yourself. You'll leave with actionable experiments you can start immediately.

Sign up here.

P.S. Want the Six Personas of Product Leadership framework I mentioned? Download it here - it breaks down the six distinct modes of strategic work product leaders need to master.

P.P.S. If you're a product leader who needs to develop strategic capability across your entire team—not just yourself—I work with product organizations on systematic capability development through workshops, assessments, and team training. Learn more here.

P.P.P.S. Know a product leader whose team is struggling with the shift from tactical execution to strategic thinking? Forward this to them. They're probably feeling the pressure to "speed up PM" when what they really need is role clarity about where value comes from.