This is an important read for Product Managers especially. A great tool to include in your mental tool kit. Here are my notes:
This book coaches us to Think and Lead our teams by Outcomes inorder to focus on customer behaviors that bring business results, as well as meaningful transformations in any organization.
What is an Outcome?
An Outcome is a change in customer behavior that drives business results.
What is the outcome that your business seeks?
To reiterate….an Outcome is a change in customer behavior that drives business results. What is then the Customer Behavior Change that we are looking for?
Lets talk about what are the most common ways in which we think and lead our teams.
Distinguishing between Leading by Outputs vs Impacts vs Outcomes
Leading by Outputs: Manage the team by telling them what to make. This isn’t the best way because features don’t guarantee to deliver value.
Leading by Impact: Ask the team to deliver high level value by increasing the revenue. This isn’t very specific enough.
Leading by Outcomes: Ask teams to create a specific customer behavior that drives business results. That allows them to find the right solution and keeps them focused on delivering value.
What is the outcome that your business seeks?
We know, an Outcome is a change in customer behavior that drives business results. This than brings us to a very important question. What is the Customer Behavior Change that we are looking for?
When to use an Outcome based Approach?
When there is an uncertainty around a new initiative/product/feature. Will our new product release make customers happier? Is it going to have the desired result for our business? As PM’s, at the beginning of any initiative, most often than not, we are starting out on things that have a high degree of uncertainty.
When teams are facing this kind of uncertainty, outcomes are a great way to set goals because they allow teams to experiment, to try different solutions until they hit on the one that works.
When NOT to use an Outcome based Approach?
For Operations for example, that ensure the day to day functioning of the business is fine. Here when you have a high degree of confidence that the solution will work, the outcome based approach is less useful. Planning with outputs is appropriate.
And the Companion tool of an Outcome Based Approach is…
Experimentation!
When you combine outcome-based targets with a process thats based on running experiments, you really start to unlock the power of agile approaches.
Think of agile projects as a series of hypotheses and experiments, all designed to achieve an outcome.
Ask this question over and over again…”What could we do to deliver value early?”
Combining experiments with outcomes is really a powerful way to work, especially in situations of high uncertainty.
When you plan work in this way, a combination of outcome goals and experiments, you give yourself and your team the permission to go after a meaningful business goal, and you give people the freedom to experiment their way forward even when the way forward is not clear.
To figure out if your outputs create the outcomes you seek, you need to test and run experiments. MVP is a buzzword that means experiment.
Which Outcomes to work on first?
To find the right outcomes to work on, we start with a simple question: ‘What are the customer behaviors that drive business results?’
These are Magic questions!
- What are the user and customer behaviors that drive business results?
- How can we get people to do more of those behaviors?
- How do we know we’re right?
Outcome based Roadmaps
Use Outcomes (not features) to plan initiatives. Ask ‘what new behaviors will this initiative create that will deliver business value? How can we deliver that value sooner?
Plan around themes of work, problems to solve or outcomes to deliver
More Reads:
Technique for articulating important Outcomes
https://amplitude.com/blog/2018/03/21/product-north-star-metric
To Innovate: Who do want your Customers to Become?
https://medium.com/producthood/who-do-you-want-your-customers-to-become-michael-schrage-5a0f634ae2ee
To Innovate: Unlocking the customer value chain
https://medium.com/@feelinspired/unlocking-the-customer-value-chain-thales-s-teixeira-97c8b0e0ca81
