ON CONTINUOUS PRODUCT DISCOVERY — OUTCOME ORIENTEDNESS
Navigating the Shift: Embracing Outcome-Centric Product Management
Overcoming Challenges and Unlocking Benefits
Shifting towards outcome-centric product management — Challenges and benefits
Outcome-centric product management represents a paradigm shift with the potential to redefine how we create, measure, and deliver value. By navigating the challenges and reaping the rewards of this transformation, product managers can lead their teams toward more meaningful and impactful product development journeys. As the field continues to mature, the dialogue surrounding outcomes versus outputs will likely become richer, providing even greater insights for the product management community.
Defining outcomes: More than mere changes
At its core, outcome-centric product management revolves around the concept that outcomes are the true drivers of business results.
Outcomes are changes in human behavior that drive business results — Josh Seiden
This definition transcends the simplistic notion of outputs — the tangible deliverables we often equate with success. Outcomes, on the other hand, center on the transformation of user behavior. They involve deciphering how your product or service influences customers’ actions, habits, and perceptions.
This shift in perspective marks the first step in understanding why outcomes matter
Challenges in shifting to an outcome-oriented mindset
While the concept of outcomes might seem compelling, transitioning from a traditional output-focused mindset to an outcome-centric one poses substantial challenges including:
- Measurement and Impact: Measuring outcomes isn’t as straightforward as tallying outputs. It demands the establishment of clear, quantifiable metrics linked directly to changes in user behavior. This shift necessitates a fresh approach to analytics and data collection, often requiring product teams to adapt their tools and processes.
- Lagging Indicators: The reliance on lagging indicators, such as 90-day retention, can impede rapid experimentation cycles. Waiting for extended periods to evaluate the impact of changes inhibits agility and can lead to missed opportunities for optimization.
- Discovery Work: To make the outcome mindset work, product teams often find themselves needing to conduct extensive discovery work. This involves probing deeper into customer behavior, preferences and needs to identify the outcomes that truly matter. Discovery work is a continuous process that bridges the gap between product outcomes and overarching business objectives.
Why outcomes?
If the transition to outcome-centric product management poses such challenges, why bother? The answer lies in the numerous advantages it offers:
- Historical Advocacy: Some of the most respected names in management, like Peter Drucker and Andy Grove, have championed managing by outcomes for decades and it has now become an established management culture to be driven by outcomes.
- Empowering Teams: Shifting towards outcomes empowers product teams by granting them greater autonomy, responsibility, and ownership of problem-solving. Rather than adhering rigidly to fixed roadmaps, teams are encouraged to explore and innovate to achieve the desired outcomes.
- Room for Doubt: Outcome-centricity acknowledges the uncertainty inherent in product development. Unlike traditional roadmaps that promise unwavering certainty, outcomes provide room for doubt. This skepticism encourages product teams to adapt and pivot when necessary, resulting in more flexible and dynamic strategies.
- Measuring Success: Clear outcomes act as guiding stars for product teams. They help align work priorities, pinpoint customer opportunities, and provide the means to measure the impact of experiments accurately. This clarity is invaluable in an industry characterized by rapid change.
Challenges and research on managing through outcomes
While outcome-centric product management offers an enticing vision of more effective and customer-oriented practices, it is not immune to scrutiny and skepticism. The ongoing discourse on this approach revolves around the need for concrete empirical evidence to substantiate the numerous claims made in its favor.
- Best Practices vs. Research: At first glance, the principles of managing by outcomes appear compelling, supported by the voices of industry experts and leaders. Best practices, oftentimes driven by anecdotal success stories, have propelled the adoption of this approach across many organizations. Product managers have been enticed by the promise of greater customer satisfaction, enhanced agility, and superior business results. However, the crux of the debate lies in the disparity between these widely embraced best practices and the empirical research examining their actual impact. While practitioners passionately endorse the shift towards outcomes, the research on its effectiveness remains relatively scarce and, at times, inconclusive. This dissonance between the enthusiastic advocacy in practice and the limited empirical validation gives rise to valid questions about the true efficacy of adopting an outcome-centric approach.
- Navigating the Empirical Void: One significant challenge in assessing the value of outcome-centric product management is the scarcity of rigorous empirical studies. This gap in research makes it challenging to conclusively determine whether this approach consistently leads to superior outcomes, such as increased customer retention, revenue growth, or market share. Without robust empirical data, skeptics argue that organizations may be implementing outcome-centric practices based on faith rather than quantifiable evidence. This can create a situation where companies are investing significant resources, reorienting their product development strategies, and overhauling their processes without a clear understanding of whether these changes truly deliver the promised benefits.
The road ahead: A balanced approach
As product management continues to evolve, the adoption of outcome-centric practices is expected to grow, driven by the persuasive arguments put forth by thought leaders and industry best practices. Yet, in this journey of transformation, maintaining a balanced perspective becomes crucial. Embracing outcome-centricity should not be an all-or-nothing proposition. Instead, it’s essential to approach this paradigm shift with a critical mindset. Here’s a roadmap for a balanced approach:
- Embrace Empowerment: Recognize the inherent value of outcome-centric product management in granting product teams greater autonomy, responsibility, and ownership. These attributes can lead to more innovative and customer-centric solutions.
- Acknowledge the Need for Validation: While industry best practices provide valuable guidance, acknowledge the importance of empirical validation. Actively seek opportunities to engage in research and experimentation within your organization to assess the impact of an outcome-centric approach.
- Foster a Culture of Learning: Encourage a culture of continuous learning and adaptation. Be open to feedback, experimentation, and iterative improvement. This approach ensures that your product management practices are not stagnant but evolve in alignment with empirical evidence.
Exploring different types of outcomes for strategic product management
Your choice of outcomes wields a profound influence over the results you attain, making it a critical aspect of your product strategy. To navigate this complex terrain, it’s imperative to not only understand the various types of outcomes but also to grasp their nuances and implications. There are three main types of outcomes that product managers will encounter:
1. Business outcomes — Measuring progress and beyond
At the heart of any product strategy lies the pursuit of business outcomes. These outcomes serve as the ultimate yardstick for assessing the overall progress of a business. Traditionally, business outcomes revolve around financial metrics like revenue growth and cost reduction. However, they can also encompass broader, more strategic initiatives, such as expanding market share in specific regions or targeting untapped customer segments.
- The challenge of lagging indicators: One of the inherent challenges with business outcomes is their nature as lagging indicators. They provide insight into events or trends after they have already transpired. Relying solely on lagging indicators can potentially render a product team reactive, as they are forced to respond to past events rather than shape future outcomes.
- The quest for leading indicators: To empower product teams with the ability to proactively drive results, the focus has shifted towards identifying leading indicators. Leading indicators are early signals that provide foresight into the direction of lagging indicators.
Leading indicators are key metrics or signals that provide early insights into the direction of lagging indicators, allowing teams to proactively assess and influence outcomes. These indicators are forward-looking and help teams make informed decisions to drive desired results. Examples of leading indicators in various contexts include:
1. Sales and Revenue: i) Leads generated: An increase in the number of leads can be a leading indicator of future sales growth. 2) Conversion rate: Improvements in the conversion rate from leads to customers can signal higher revenue in the coming months. 3) Upsell and cross-sell opportunities: Identifying opportunities for upselling or cross-selling to existing customers can lead to increased revenue.
2) Customer Retention: i) Customer Engagement: Higher levels of customer engagement, such as frequent logins or interactions with your product, can indicate better retention rates. ii) Customer Satisfaction Surveys: Early feedback from customer satisfaction surveys can highlight potential issues and predict changes in retention. iii) Usage Patterns: Monitoring how often and how extensively customers use your product can indicate their likelihood to remain loyal.
3) Product Development: i) Feature Adoption: Tracking the adoption rates of new product features can provide insights into their long-term success and impact. ii) Bug Reports: An increase in the number of bug reports may signal upcoming user dissatisfaction and potential retention issues. iii) User Testing Feedback: Early feedback from user testing sessions can help identify usability and functionality issues before they become major problems.
4) Employee Performance: i) Employee Engagement Surveys: Regular employee engagement surveys can reveal early signs of disengagement, which may lead to decreased productivity or higher turnover. ii) Training Completion Rates: Monitoring the completion rates of employee training programs can indicate the readiness of staff to take on new roles or responsibilities. iii) Project Milestone Attainment: Tracking the achievement of key project milestones can predict the successful completion of larger initiatives.
5) Financial Performance: i) Cash Flow: Monitoring cash flow can be a leading indicator of a company’s financial health and its ability to meet financial obligations. ii) Accounts Receivable Aging: An increase in the aging of accounts receivable may suggest potential collection issues. iii) Inventory Levels: Changes in inventory levels can signal shifts in demand or supply chain disruptions.
6) Marketing and Advertising: i) Click-Through Rate (CTR): An increase in CTR for online ads can indicate improved ad performance and, potentially, higher conversion rates. ii) Social Media Engagement: Early engagement metrics on social media posts can predict the overall success of a marketing campaign. iii) Lead Quality: Assessing the quality of leads generated through marketing efforts can help predict sales success.
These examples demonstrate that leading indicators vary across industries and functions, but they all share the common goal of providing early visibility into trends and potential outcomes, allowing organizations to make informed decisions and take proactive measures to achieve their goals.
Examples of business outcomes for product teams include:
- Financial metrics: i) Revenue growth: This is one of the most fundamental business outcomes. It measures the increase in a company’s total revenue over a specific period. This can be a Year-over-Year (YoY) or Quarter-over-Quarter (QoQ) measurement. ii) Cost Reduction: Reducing operational costs is a common business objective. The metrics used for this can be the Cost-to-Revenue Ratio and/or Operating Expense Reduction Rate. iii) Profit margin improvement: Increasing the profit margin indicates improved profitability. Metrics to be used to measure this include the Gross Profit Margin or Net Profit Margin.
- Strategic Initiatives: i) Market Diversification: Entering new markets or industries to reduce risk. Metrics could include Revenue from New Markets. ii) Customer Segment Targeting: Focusing on specific customer segments to tailor offerings. Metrics include Revenue from Targeted Segments and Customer Segment Growth Rate.
- Market expansion and penetration: i) Market share growth: Expanding the company’s market share within a specific industry, region, or market segment. Metrics for this, if measurable, include Market Share Percentage or Market Share Growth Rate. ii) Customer acquisition: Gaining new customers or clients is crucial for business growth. Metrics for this outcome can include the Customer Acquisition Cost (CAC) or Customer Lifetime Value (CLTV). iii) Geographic expansion: This entails expanding into new regions or territories. Metrics to measure progress include the Number of New Locations or Sales in New Regions.
- Product and service innovation: i) Product adoption: Measuring how quickly and widely a new product or service is adopted by customers. Metrics to measure include Product Adoption Rate and Time to Product Adoption. ii) Customer satisfaction: Ensuring high levels of customer satisfaction is essential for long-term success. Metrics include Customer Satisfaction Score (CSAT) and Net Promoter Score (NPS).
- Operational efficiency: i) Supply chain optimization: Streamlining the supply chain to reduce costs and improve efficiency. Metrics include Inventory Turnover Ratio and On-Time Delivery Performance. ii) Process Efficiency: Improving internal processes to increase productivity with metrics that could include Process Cycle Time or Cost per Process.
2. Product outcomes: Within the product team’s control
Product outcomes represent the pivotal measure of how effectively a product contributes to advancing the overarching business objectives. Unlike business outcomes, product outcomes squarely fall within the jurisdiction of the product trio — product manager, designer, and engineer. This places them in a position of direct control and influence over these outcomes.
- A rule of progress: In practice, product trios tend to make more substantial progress when focusing on product outcomes rather than broader business outcomes. The rationale is straightforward — product outcomes align directly with the responsibilities of the product trio, thereby empowering them to take ownership and drive results with precision and agility.
- Coordination for holistic impact: While product outcomes are often the primary purview of a product team, it’s essential to recognize that many business objectives necessitate collaboration across various departments. In such instances, cross-functional teams, comprising members from diverse domains like product, marketing, and customer support, must synchronize their efforts to achieve overarching business outcomes.
Examples of product outcomes for product teams include:
- User engagement metrics: These product outcomes focus on how effectively a product engages its users. Examples include Daily Active Users (DAU): The number of users who engage with the product daily. Monthly Active Users (MAU): The number of users who engage with the product every month. Session Duration: The average amount of time users spend in each session. Feature Adoption Rate: The number of users that actively use specific features within the product.
- User retention: These outcomes assess the ability of a product to retain users over time. Examples include User Churn Rate: The rate at which users stop using the product. Customer Retention Rate: The percentage of customers who continue using the product over a defined period.
Cohort Analysis: Examining the behavior of specific groups of users over time to identify trends in retention. - User satisfaction and experience: These outcomes measure the overall satisfaction and experience of users. Examples include Net Promoter Score (NPS): A metric that assesses the likelihood of users recommending the product to others. Customer Satisfaction (CSAT): A measure of user satisfaction with the product’s features and functionality. User Feedback and Ratings: Gathering and analyzing user feedback, ratings, and reviews to gauge satisfaction.
- Conversion metrics: These outcomes focus on how well the product converts users into customers or leads. Examples include Conversion Rate: The percentage of users who take a specific desired action, such as signing up for a trial or making a purchase. Sales Funnel Metrics: Tracking users’ progress through various stages of the sales or conversion funnel.
- Feature performance: Assessing the effectiveness of specific product features. Examples include Feature Adoption and Usage: Measuring how frequently users engage with particular features. Feature Abandonment Rate: Identifying features that users start but do not complete or use regularly. Feature Impact on Retention: Determining if specific features positively influence user retention.
- Usability and accessibility: Ensuring that the product is user-friendly and accessible to a wide audience. Examples include Usability Testing Results: Analyzing the outcomes of usability tests to identify areas for improvement. Accessibility Compliance: Ensuring that the product complies with accessibility standards to accommodate users with disabilities.
- Performance metrics: These outcomes focus on the product’s technical performance and reliability. Examples include Page Load Time: How quickly pages or screens within the product load. Uptime and Availability: Ensuring the product is available and reliable for users.
- Market expansion and growth: Assessing how well the product supports business growth. Examples include Market Share Growth: Expanding the product’s market share within a specific industry or region. Customer Segment Growth: Increasing the number of users within specific customer segments.
3. Traction metrics: Navigating latitude and limitations
Traction metrics zoom in on specific features or workflows within the product. They serve as instrumental tools for gauging the usage, adoption, or performance of these specific elements.
Assigning traction metrics to product teams involves a delicate balancing act that revolves around giving teams the flexibility to explore and adapt while maintaining a clear focus on achieving a particular outcome. This approach stands in contrast to rigidly confining teams to predefined outputs. This means:
- Latitude for exploration and adaptation: Traction metrics should be carefully chosen to strike the right balance. They should allow product teams the freedom to explore various avenues and adapt their strategies as needed. Instead of fixating on a predetermined output, teams should have the liberty to experiment and iterate in pursuit of the desired outcome. This flexibility is essential for responding to changing market dynamics and evolving customer needs.
- Optimization challenges: Traction metrics are particularly well-suited for optimization challenges. These challenges typically involve improving or fine-tuning an existing solution or product feature. In such cases, the objective is not to create something entirely new but to enhance what already exists. Traction metrics provide a clear target for these optimization efforts, allowing teams to focus on making incremental improvements that lead to better outcomes.
- Mature products seeking enhancement: Mature products, which have already established themselves in the market, often benefit from the application of traction metrics. These metrics help identify specific areas where improvements can be made to enhance the product’s overall performance or user experience. For instance, if a mature product recognizes that a particular feature is not performing as well as it could, traction metrics can be employed to optimize that feature, making it more effective and user-friendly.
- Traction metrics for new product teams: For junior or less experienced product teams, working with traction metrics provides a structured and controlled environment for learning and growth. It serves as a valuable stepping stone before taking on more complex and wide-ranging responsibilities. In this context, traction metrics serve as training wheels, allowing team members to become familiar with product discovery methods and the intricacies of product management. As these teams gain confidence and expertise, they can gradually transition to handling broader product outcomes and tackling more significant challenges.
Examples of traction outcomes for product teams include:
- User engagement and adoption: i) Feature adoption rate: Measures how quickly users adopt a specific feature or functionality. Metrics of measurement include Percentage of Users Using the New Feature and/or Time to Feature Adoption. ii) User Engagement: Tracks user interactions within the product to assess overall engagement. Metrics for measurement include Daily Active Users (DAU), Monthly Active Users (MAU), and Session Duration.
- Conversion and retention: i) Conversion Rate: Evaluates how effectively the product converts visitors or users into customers measured by metrics such as Conversion Rate Percentage and/or Funnel Drop-off Rate. ii) User Retention: Assesses the percentage of users who continue to use the product over time. Metrics for measurement include Retention Rate and/or Churn Rate.
- Performance and efficiency: i) Load Time: Measures the time it takes for the product or specific features to load. Metrics include Page Load Time and/or Feature Load Time. ii) Resource utilization: Evaluates the efficient use of resources, such as server capacity or bandwidth through metrics such as Server Response Time and Bandwidth Consumption.
- Customer support and satisfaction: i) Response Time: Tracks the time it takes for customer support to respond to inquiries or issues. Metrics include Average Response Time and/or First Response Time. ii) Customer Satisfaction: Monitors customer feedback and satisfaction scores via metrics such as Customer Satisfaction Score (CSAT) and/or Net Promoter Score (NPS).
- Conversion funnel optimization: i) Funnel Progression Rate: Measures how smoothly users move through the conversion funnel using metrics such as Step Completion Rate or Funnel Dropout Rate. ii) Cart Abandonment Rate: Assesses how many users add items to their cart but do not complete the purchase via metrics such as Cart Abandonment Rate and/or Recovery Rate.
- Product usability and user experience: i) User Interface (UI) Feedback: Gathers feedback on the product’s user interface and design using metrics such as UI Improvement Rate and/or User-Friendly Design Rating.
ii) Feature Usability: Evaluates how easily users can interact with specific product features. Metrics such as Usability Score and Feature Usability Improvement Rate can indicate the health of feature usability. - Content Performance: i) Content Engagement: Measures user interaction with content, such as articles or videos using metrics such as Content Views or Content Engagement Rate. ii) Content Conversion: Tracks how content influences user actions, like signing up for a newsletter. Metrics include Conversion Rate from Content and/or Content Influence Score.
A tailored approach to outcomes
The key to effective product management lies in a tailored approach to outcomes. The choice of outcome type should align with your team’s maturity, objectives, and the phase of your product’s development. Here are some actionable takeaways to consider:
- Business outcomes: While critical, recognize the limitations of lagging indicators. Strive to identify leading indicators that empower proactive decision-making.
- Product outcomes: Embrace the product outcomes that squarely fall within your team’s control. This encourages a sense of ownership and responsibility.
- Traction metrics: Use traction metrics judiciously. They are particularly suited for optimization challenges and junior teams. Ensure they align with your specific objectives.
Ultimately, mastering the selection and execution of outcomes is a dynamic journey. It’s about fostering a culture of adaptability and continuous improvement within your product team. By navigating the diverse landscape of outcomes with wisdom and strategic intent, you can steer your product management efforts toward achieving not just any results but impactful and meaningful ones that drive the success of your product and business.
Mastering outcomes: Strategies for success
Product management is a dynamic field where success is measured not only by delivering outputs but also by achieving meaningful outcomes. Therefore it’s crucial for product managers, designers, and engineers, to master the art of setting and achieving outcomes fine-tuning its intricacies, and using strategies that shift focus from outputs to outcomes while also negotiating decisions with product leaders and avoiding challenges and anti-patterns.
Understanding the four categories of product team outcomes
Product teams typically fall into one of the following four categories, each with its own challenges and opportunities:
- Delivering outputs with no focus on outcomes: In this very common scenario, product teams primarily concentrate on delivering outputs — such as features or functionalities — without giving due consideration to the broader outcomes or the impact these outputs will have on the business. Challenges include i) lack of alignment with business goals ii) difficulty in measuring the success and impact of the delivered outputs iii) risk of building features that don’t provide value to users or the organization. Solutions can include: i) Establishing a clear connection, ensuring that there is a direct and well-defined connection between the outputs you’re building and the desired business outcomes. Ask critical questions like “How does this feature align with our business objectives?” and “What problem does it solve for our users?” ii) Baking in outcome-oriented metrics: Shift the team’s focus toward outcome-oriented metrics rather than output-oriented ones. Measure success based on key performance indicators (KPIs) that reflect the achievement of business goals. iii) Having a continuous feedback loop: Encourage a culture of feedback and learning within the team. Regularly assess the impact of delivered features and iterate based on user feedback and data.
- Product leader setting outcomes with little team input: In this scenario, the product leader unilaterally defines the outcomes, leaving the product team with limited influence or input in the outcome-setting process. Challenges of this approach include i) potential misalignment between leadership’s objectives and the team’s understanding ii) reduced team ownership and motivation when they feel disconnected from the decision-making process iii) risk of missing valuable insights from the team’s expertise. Solutions can include i) Collaborative outcome mapping that encourages collaboration between the product leader and the team to map out potential product outcomes that align with the desired business objectives ensuring a shared understanding and ownership of the outcomes. ii) Two-way communication that fosters open channels of communication where the team can provide valuable input on outcome definition that encourages discussions on how specific product outcomes can contribute to achieving broader business goals. iii) Data-driven insights that leverage data and user feedback to support proposed outcomes demonstrating the potential impact of certain outcomes can help gain leadership buy-in.
- Product teams setting outcomes with little product leader input: Here, the product team independently defines outcomes without substantial input from the product leader. This can lead to potential misalignment with overall business goals and strategies. Challenges entail i) Lack of contextual understanding of broader business priorities ii) Risk of pursuing outcomes that may not be strategically aligned iii)
Limited guidance and oversight, potentially resulting in suboptimal choices. Solutions can entail i) Seeking business context where teams actively engage with the product leader to gain essential business context to understand the current business priorities, strategic initiatives, and target customer segments. Frame your conversations in terms of business outcomes. ii) Two-way communication to encourage transparent and constructive communication with the product leader to share proposed outcomes and seek feedback and alignment with the broader business objectives. iii) Align with business objectives to ensure that the outcomes you set as a product team are closely aligned with the critical business goals and strategies and demonstrate how chosen outcomes contribute to these objectives. - Negotiating outcomes with the product leader: In this ideal scenario, active negotiation takes place between the product team and the product leader to define outcomes. Teams should ensure they are tasked with the right type of outcome — whether it’s a product, business, or traction outcome — to drive effective results. Challenges may include i) ensuring clarity on the type of outcome (product, business, or traction) that best aligns with the initiative. ii) Striking the right balance between ambitious and achievable outcomes. iii) Achieving consensus and alignment between the product team and the product leader.
Solutions entail i) Outcome type clarity: Define the type of outcome that best suits the initiative and determine whether it’s a product outcome (related to features or functionalities), a business outcome (focused on broader business goals), or a traction outcome (measuring user behavior and engagement). ii) Ambitious yet achievable — set specific and challenging goals that stretch the team’s capabilities while remaining achievable. Ensure that the outcomes are realistic within the given constraints. iii) Collaborative negotiation by engaging in collaborative negotiation with the product leader, discussing the expected impact, potential challenges, and the alignment of outcomes with the overall product and business strategy, and striving for a shared understanding and commitment to success.
Navigating the different categories of product team outcomes involves establishing alignment with business objectives, fostering collaboration, seeking essential context, and engaging in productive negotiations. By understanding the challenges and implementing these solutions, product teams can enhance their ability to set and achieve meaningful outcomes that drive business success.
Shifting toward an outcome-focused mindset
Shifting from a focus on outputs to outcomes requires a mindset transformation. Actionable steps to foster an outcome-focused approach include:
- Requesting more business context: When assigned a new initiative, seek comprehensive business context. Understand the target customer, the desired business outcome, and why the initiative is expected to drive that outcome. Effective questioning can unearth valuable insights.
- Connect business outcomes with potential product outcomes: Establish a clear connection between the desired business outcomes and the product outcomes. Ensure that your product outcomes serve as leading indicators for the ultimate business objectives.
- Align product outcomes with leading indicators: It’s essential to align product outcomes with leading indicators that signal progress toward achieving the desired business outcomes. This alignment empowers product teams to proactively steer toward success.
Mastering two-way negotiation with product leaders
Successful product management thrives on collaboration and effective negotiation with product leaders. To excel as a successful product team in this realm:
- Map product outcomes to desired business outcomes: Visualize how your product outcomes contribute to the overarching business objectives. Creating this alignment helps product leaders understand the strategic value of your initiatives.
- Seek additional business context: When tasked with a product outcome, don’t hesitate to seek more business context from your leaders. Understand the business outcomes associated with your product outcomes to better inform your decisions.
- Transparently communicate progress: Effective communication is key. Keep your product leaders informed about the expected progress within the specified timeframes. Transparency builds trust and ensures everyone is aligned toward the same goals.
Setting team outcomes with input from product leaders
To maximize effectiveness, product teams need to set outcomes in collaboration with product leaders by:
- Requesting business context: Before defining outcomes, engage with product leaders to gain a deep understanding of current business priorities, customer segments, and strategic initiatives. Frame your conversations in terms of business outcomes.
- Prioritize critical business outcomes: Focus on outcomes that have the most significant impact on critical business objectives. Prioritization ensures that your efforts align with overarching business goals.
- Choose impactful product outcomes: Select product outcomes where your team can exert significant influence. This empowers your team to take ownership and drive results effectively.
Negotiating outcomes with product leaders
When negotiating outcomes with product leaders, consider the following strategies:
- Define the type of outcome: Clarify whether your team is tasked with a product outcome, a business outcome, or a traction metric. Understanding the nature of the outcome helps set the right expectations.
- Assess familiarity and relevance of traction metrics: When dealing with traction metrics, evaluate their familiarity within the team and their relevance to customer behavior. Ensure that these metrics align with your product’s objectives.
- Start with a learning goal: For new metrics or unfamiliar areas, consider beginning with a learning goal. This allows your team to explore opportunities and gather insights before committing to challenging performance goals.
- Set specific and challenging goals: If your team is experienced with a particular metric, aim for specific and challenging goals. Well-defined objectives inspire teams to push their limits and achieve exceptional results.
Avoiding common anti-patterns
Successful product teams steer clear of common anti-patterns that hinder progress including:
- Avoid pursuing numerous outcomes concurrently: Spreading efforts too thin across multiple outcomes often results in minimal impact. Focus on one outcome at a time to achieve substantial progress.
- Resist ping-ponging between outcomes: Continuously shifting between outcomes each quarter prevents teams from capitalizing on the learning curve. Dedicate multiple quarters to a specific outcome to maximize impact.
- Opt for team outcomes, not individual ones: Collaborate on team outcomes rather than setting individual goals for product managers, designers, and engineers. This promotes alignment and collective achievement.
- Differentiate outputs from outcomes: Clearly distinguish between outputs (e.g., launching a feature) and outcomes (e.g., increased user engagement). Outcomes should represent measurable impacts on the business.
- Balance primary outcomes with health metrics: While focusing on primary outcomes is crucial, don’t neglect health metrics. Monitor these metrics to ensure that progress in one area doesn’t adversely affect other aspects of your product.
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