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May 21 - May 21, 2021
We shifted away from having lists of metrics to increase and outputs to deliver. Now we have fewer goals, more clarity, and a focus on solving the customer’s problem in ways that drive business value.
The more folks involved in each decision, the longer it will take to reach that decision. You want to balance speed of decision-making with inclusiveness.
1. Outcome-oriented:
start thinking in outcomes rather than outputs. That means rather than defining your success by the code that you ship (your output), you define success as the value that code creates for your customers and for your business (the outcomes). Rather than measuring value in features and bells and whistles, we measure success in impact—the impact we have had on our customers’ lives and the impact we have had on the sustainability and growth of our business.
2. Customer-centric: The second mindset places the customer at the center of our world. It requires that we not lose sight of the fact (even though many companies have) that the purpose of business is to create and serve a customer. We elevate customer needs to be on par with business needs and focus on creating customer value as well as business value.
3. Collaborative: The third mindset requires that you embrace the cross-functional nature of digital product work and reject the siloed model, where we ...
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4. Visual: The fourth mindset encourages us to step beyond the comfort of spoken and written language and to tap into our immense power as spatial thinkers. The habits in this book will encourage you to draw, to externalize your thinking, and to map what you know.
At a minimum, weekly touchpoints with customers By the team building the product Where they conduct small research activities In pursuit of a desired outcome
The implication for product trios is that two of the most important steps for reaching our desired outcome are first, how we map out and structure the opportunity space, and second, how we select which opportunities to pursue.
Chip and Dan Heath, in their book Decisive, outline four villains of decision-making that lead to poor decisions. The first villain is looking too narrowly at a problem. This is exactly why we want to explore multiple ways of framing the opportunity space. The second villain is looking for evidence that confirms our beliefs. This is commonly known as confirmation bias. We’ll be discussing this bias often throughout the book. We’ll be exploring several habits that will help us overcome this bias and ensure that we are considering both confirming and disconfirming evidence. The third villain is
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How does this work with the Four Big Risks?
Instead of asking, “Should we solve this customer need?” we’ll ask, “Which of these customer needs is most important for us to address right now?” We’ll compare and contrast our options. Instead of falling in love with our first idea, we’ll ask, “What else could we build?” or “How else might we address this opportunity?” Visualizing your options on an opportunity solution tree will help you catch when you are asking a “whether or not” question and will encourage you, instead, to shift to a compare-and-contrast question.
When we learn through testing that an idea won’t work, it’s not enough to move on to the next idea. We need to take time to reflect. We want to ask: “Based on my current understanding of my customer, I thought this solution would work. It didn’t. What did I misunderstand about my customer?” We then need to revise our understanding of the opportunity space before moving on to new solutions.10 When we do this, our next set of solutions get better. When we skip this step, we are simply guessing again, hoping that we’ll strike gold.
The depth and breadth of the opportunity space reflects the team’s current understanding of their target customer. If our opportunity space is too shallow, it can guide us to do more customer interviews. A sprawling opportunity space, on the other hand, reminds us to narrow our focus. If we aren’t considering enough solutions for our target opportunity, we can hold an ideation session. If we don’t have enough assumption tests in flight, we can ramp up our testing.
Organizational change happens unevenly. Even when a company tasks a team with a clear desired outcome, it can be hard for leaders to let go of dictating outputs. This is especially true during times of stress, when we tend to fall back on old habits. As a result, it’s not enough for a product trio to make evidence-based decisions about what to build; they also need to justify those decisions to key stakeholders along the way.
The key to bringing stakeholders along is to show your work. You want to summarize what you are learning in a way that is easy to understand, that highlights your key decision points and the options that you considered, and creates space for them to give constructive feedback.
Could OSTs unlock the opportunity for stakeholders to relinquish micromanaging outputs and stay entrusting them to deliver outcomes?
Your tree should visually show what solutions you are considering and what tests you are running to evaluate those solutions. Instead of communicating your conclusions (e.g., “We should build these solutions”), you are showing the thinking and learning that got you there. This allows your stakeholders to truly evaluate your work and to weigh in with information you may not have.
When we manage by outcomes, we give our teams the autonomy, responsibility, and ownership to chart their own path. Instead of asking them to deliver a fixed roadmap full of features by a specific date in time, we are asking them to solve a customer problem or to address a business need. The key distinction with this strategy over traditional roadmaps is that we are giving the team the autonomy to find the best solution.
A fixed roadmap communicates false certainty. It says we know these are the right features to build, even though we know from experience their impact will likely fall short. An outcome communicates uncertainty. It says, We know we need this problem solved, but we don’t know the best way to solve it. It gives the product trio the latitude they need to explore and pivot when needed. If the product trio finds flaws with their initial solution, they can quickly shift to a new idea, often trying several before they ultimately find what will drive the desired outcome.
managing by outcomes communicates to the team how they should be measuring success. A clear outcome helps a team align around the work they should be prioritizing, it helps them choose the right customer opportunities to address, and it helps them measure the impact of their experiments. Without a clear outcome, discovery work can be never-ending, fruitless, and frustrating.
When considering outcomes for specific teams, it helps to distinguish between business outcomes, product outcomes, and traction metrics. A business outcome measures how well the business is progressing. A product outcome measures how well the product is moving the business forward. A traction metric measures usage of a specific feature or workflow in the product.
product outcomes measure how well the product moves the business forward. By definition, a product outcome is within the product trio’s span of control. Business outcomes, on the other hand, often require coordination across many business functions.
when setting product outcomes, we want to make sure that we are giving the product trio enough latitude to explore. This is where the distinction between product outcomes and traction metrics can be helpful. It’s also a key delineation between an outcome mindset and an output mindset.
assign traction metrics to more junior product trios. Improving a traction metric is more of an optimization challenge than a wide-open discovery challenge and is a great way for a junior team to get some experience with discovery methods before giving them more responsibility.
The key is to use traction metrics only when you are optimizing a solution and not when the intent is to discover new solutions. In those instances, a product outcome is a better fit.
the product trio will need some time to learn what might move the metric. This is why a stable product trio focused on the same outcome over time is so critical. Every time we mix up the team or change the outcome, we take a learning tax as the team gets up to speed.
studies found that encouraging teams to “do their best” was more effective than setting specific, challenging goals. Additionally, these studies found that setting an initial learning goal (e.g., discover the strategies that might work) was more effective than setting a performance goal. Only once appropriate strategies were identified did performance increase with a specific, challenging performance goal.
research suggests that product trios, when faced with a new outcome, should first start with a learning goal (e.g., discover the opportunities that will drive engagement) before being tasked with a performance goal (e.g., increase engagement by 10%). This approach can be particularly helpful because it’s common to have uncertainty around the best way to measure your outcome.
Product trios tend to fall into four categories when it comes to setting outcomes: 1) they are asked to deliver outputs and don’t work toward outcomes (this is, by far, the most common scenario); 2) their product leader sets their outcome with little input from the team; 3) the product trio sets their own outcomes with little input from their product leader; 4) the product trio is negotiating their outcomes with their leaders as described in this chapter.
When your product leader assigns a new initiative to your product trio, ask your leader to share more of the business context with you. Explore these questions: Who is the target customer for this initiative? What business outcome are we trying to drive with this initiative? Why do we think this initiative will drive that outcome?
If you are being asked to deliver a business outcome, try mapping out which product outcomes might drive that business outcome, and get feedback from your leader.
If you are being asked to deliver a product outcome, ask your leader for more of the business context. Try asking, “What business outcomes are we trying to drive with this product outcome?”
What’s most important to the business right now? Try to frame this conversation in terms of business outcomes.
Is there a customer segment that is more important than other customer segments?
Are there strategic initiatives we shou...
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Use the information you gain to map out the most important business outcomes and what product outcomes might drive those business out...
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Choose a product outcome that your team has the mos...
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Is your team being tasked with a product outcome and not a business outcome or a traction metric?
If it’s the first time you are working on a new metric, are you starting with a learning goal (e.g., discover the relevant opportunities) before committing to a challenging performance goal?
Setting individual outcomes instead of product-trio outcomes. Because product managers, designers, and software engineers typically report up, to their respective departments, it’s not uncommon for a product trio to get pulled in three different directions, with each member tasked with a different goal.
The goal is for the product trio to collaborate to achieve product outcomes that drive business outcomes. This isn’t possible if each member is focused on their own goal. Instead of setting individual outcomes, set team outcomes.
outputs can creep in. I worked with a team that helped students choose university courses who set their outcome as “Increase the number of course reviews on our platform.” When I asked them what the impact of more reviews was, they answered, “More students would see courses with reviews.” That’s not necessarily true. The team could have increased the number of reviews on their platform, but if they all clustered around a small number of courses, or if they were all on courses that students didn’t view, they wouldn’t have an impact. A better outcome is “Increase the number of course views that
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In addition to your primary outcome, a team needs to monitor health metrics to ensure they aren’t causing detrimental effects elsewhere. For example, customer-acquisition goals are often paired with customer-satisfaction metrics to ensure that we aren’t acquiring unhappy customers. To be clear, this doesn’t mean one team is focused on both acquisition and satisfaction at the same time. It means their goal is to increase acquisition without negatively impacting satisfaction.
To get started, you’ll want to first set the scope of your experience map.
To prevent groupthink, it’s critical that each member of the trio start by developing their own perspective before the trio works together to develop a shared perspective. This is counterintuitive. It’s going to feel inefficient. We are used to dividing and conquering, not duplicating work. But in instances where it’s important that we explore multiple perspectives, the easiest way to get there is for each product-trio member to do the work individually.
Start with the scope of your experience map. Our product trio that opened the chapter started with the question, “What’s preventing our customers from completing the application today?” In our streaming-entertainment example, we might start with the question, “How do consumers entertain themselves with video?”
The purpose of customer interviewing is not to ask your customers what you should build. Instead, the purpose of an interview is to discover and explore opportunities. Remember, opportunities are customer needs, pain points, and desires. They are opportunities to intervene in your customers’ lives in a positive way.
The Challenges With Asking People What They Need
During a workshop, I asked a woman what factors she considered when buying a new pair of jeans. She didn’t hesitate to answer. She said, “Fit is my number-one factor.” I then asked her to tell me about the last time she bought a pair of jeans. She said, “I bought them on Amazon.” I asked, “How did you know they would fit?” She replied, “I didn’t, but they were a brand I liked, and they were on sale.”
Her first response tells me how she thinks she buys a pair of jeans. Her second response tells me how she actually bought a pair of jeans. This is a crucial difference. She thinks she buys a pair of jeans based on fit, but brand loyalty, the convenience of online shopping, and price (or getting a good deal) were more important when it came time to make a purchase.
Gazzaniga named this tendency to rationalize our behavior even when we can’t possibly know the reason as the “left brain interpreter,” and later studies have shown that we all have an active “left brain interpreter.”
This could be very fundamental understanding
