Continuous Discovery Habits: Discover Products that Create Customer Value and Business Value

by Teresa Torres

the best teams also work bottom-up. They use their assumption tests to help them evaluate their solutions and evolve the opportunity space. As they learn more about the opportunity space, their understanding of how they might reach their outcome (and how to best measure that outcome) will evolve.

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. A well-constructed opportunity solution tree does exactly this.

When sharing your discovery work with stakeholders, you can use your tree to first remind them of your desired outcome.

Instead of communicating your conclusions (e.g., “We should build these solutions”), you are showing the thinking and learning that got you there.

As you embark on the wandering paths of discovery, your tree will act as your roadmap, helping you find the best path to your desired outcome.

“An outcome is a change in human behavior that drives business results.”

her team were tasked with improving a core business outcome, customer retention.

increasing the perceived value of tailor-made dog food and if they increased the number of dogs that liked the food. Their customer interviews helped them identify two product outcomes that were more actionable—they could measure their impact on both metrics right away, and they believed if they drove both, they would, in turn, drive their business outcome of increasing retention.

Teams tasked with a new outcome often have no idea how to measure that outcome, how to impact it, or even if it’s the right outcome to be pursuing.

shifting from dictating outputs to managing by outcomes is critical to a company’s success.

When we manage by outcomes,

we are asking them to solve a customer problem or to address a business need.

giving the team the autonomy to find the best solution.

this strategy leaves room for doubt. A fixed roadmap communicates false certainty.

An outcome communicates uncertainty. It says, We know we need this problem solved, but we don’t know the best way to solve it.

Managing by outcomes is only as effective as the outcomes themselves. If we choose the wrong outcomes, we’ll still get the wrong results. 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.

Business outcomes start with financial metrics (e.g., grow revenue, reduce costs), but they can also represent strategic initiatives (e.g., grow market share in a specific region, increase sales to a new customer segment).

They measure something after it has happened. It’s hard for lagging indicators to guide a team’s work because it puts them in react mode, rather than empowers them to proactively drive results.

product trios will make more progress on a product outcome rather than a business outcome.

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.

Assigning product outcomes to product trios increases a sense of responsibility and ownership.

Finally, 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.

if you have a mature product and you have a traction metric that you know is critical to your company’s success, it makes sense to assign this traction metric to an optimization team.

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.

Setting a team’s outcome should be a two-way negotiation between the product leader (e.g., Chief Product Officer, Vice President of Product, etc.) and the product trio.

The product leader brings the across-the-business view of the organization to the conversation and should communicate what’s most important for the business at this moment in time.

the leader should be identifying an appropriate product outcome for the trio to focus on. Outcomes are a good way for the lea...

The product trio brings customer and technology knowledge to the conversation and should communicate how much the team can move the metric in the designated period of time (usually one calendar quarter). The trio should not be required to communicate what solutions they will build at this time, as this should emerge from discovery.

This then sets the stage for the two-way negotiation. If the business needs the team to have a bigger impact on the outcome, the trio will need to adjust their strategy to be more ambitious, and the product leader will need to understand that more ambitious outcomes carry more risk. The team will need to make bigger bets to increase their chance of success, but these bigger bets typically come with a higher chance of failure. Similarly, the product leader and product trio can negotiate resources (e.g., adding engineers to the team) and/or remove competing tasks from the team’s backlog, giving them more time to focus on delivering their outcome.

when teams are assigned an outcome for the first time

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 outc...

teams who participated in the setting of their own outcomes took more initiative and thus performed better than colleagues who were not involved in setting their outcomes

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%).

If you are being asked to deliver outputs with no regard for outcomes, try these tips to shift toward a more outcome-focused mindset:

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?

Try to connect the dots between the business outcome and potential product outcomes. Can you clearly define how this new initiative will impact a product outcome?

If your product leader is asking you to deliver an outcome with no input from your team, try these tips

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?”

clearly communicate how far you think you can get in ...

If your team is setting their own outcome with no input from the product leader, try these tips to sh...

Before you set your own outcome, ask your product leader for more business context. Try these questions: 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...

Use the information you gain to map out the most important business outcomes and what product outcomes might drive those business outcomes. Get feedback from your leader. Choose a product ...

If your product trio is already negotiating outcomes with your product leader, congratulations! However, remember to keep these tips in mind as you set outcomes with your leader: Is your team being tasked with a product outcome and not a business outcome or a traction metric? If you are being tasked with a traction metric, is the metric well known? Have you already confirmed that your customers want to exhibit the behavior being tracked? 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 opport...

Avoid These Common Ant...

Most teams will have more of an impact by focusing on one outcome at a time.

When we ping-pong from outcome to outcome, we never reap the benefits of this learning curve.

set an outcome for your team, and focus on it for a few quarters. You’ll be amazed at how much impact you have in the second and third quarters after you’ve had some time to learn and explore.

Perhaps the product manager is tasked with a business outcome, the designer is tasked with a usability outcome, and the engineer is tasked with a technical-performance outcome. This is most common at companies that tie outcomes to compensation. However, it has a detrimental effect. 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.

I see teams set their outcome as “Launch an Android app” instead of “Increase mobile engagement” or “Get to feature parity on the new tech stack” instead of “Transition customer to the new tech stack.”