Leverage cascading buyer > product > enterprise outcomes to align groups and speed up progress.
Outcome-driven administration fashions and mantras are ubiquitous today. You’ll discover authors and coaches selling the worth of being final result oriented in enterprise, product administration, advertising and marketing, training, and even life teaching circles.
A fast Google search yields articles by Harvard Enterprise Evaluate and Boston Consulting Group, books like “Outcomes Over Output” by Josh Sieden, and frameworks like OKR’s and Jobs-To-Be-Performed.
Within the product administration area, outcome-driven pondering is taught as a core precept of the self-discipline — see Marty Cagan’s newest guide, “Remodeled”, as a latest, high-profile instance.
An outcome-driven focus can also be prescribed by product leaders for particular product actions like discovery and roadmapping — see Teresa Torres’s Alternative Resolution Tree mannequin and “Product Roadmaps: Relaunched” by Lombardo, McCarthy, Ryan, and Connors, as notable examples.
All of this instructing has impressed leaders throughout numerous organizations to endeavor to raise themselves to a stronger final result focus.
And but, numerous organizations stumble of their journey to embrace outcome-driven product growth. They continue to be caught in a “extra options and effectivity” output-oriented mentality.
Why is that? The explanations often stem from a lack of know-how of the various kinds of outcomes, how they’re interconnected, and the way to align groups round them.
A misalignment of focus and possession round outcomes can have sharply damaging penalties on each the success potential and the tradition of a product growth group. Certain, you may get fortunate with an output-driven focus for a brief time frame, but it surely’s exhausting to remain fortunate.
On the flip aspect, the precise alignment of possession and focus round outcomes can dramatically speed up worth creation whereas fostering empowerment, effectivity, and a extra acute sense of enterprise influence throughout a product growth staff. It is a sturdy benefit.
Have you ever ever questioned or debated questions like:
“What’s the distinction between a enterprise final result and a buyer final result?”
“What’s a product final result?”
“How do these outcomes relate to 1 one other?”
“Who owns which outcomes?”
“How does our buyer worth proposition and enterprise mannequin slot in?”
“How can we get began with outcome-driven product growth?”
In that case, article is for you!
There are three distinct sorts of outcomes for a product growth group: buyer outcomes, product outcomes, and enterprise outcomes.
These outcomes are joined by particular working relationships. I refer to those outcomes and their relationships because the Final result Chain:
There’s lots to unpack right here. Let’s begin by reviewing every kind of final result intimately:
Buyer outcomes contain progress in direction of unmet wants, unfulfilled wishes, issues, and/or jobs-to-be-done. They usually manifest as social, emotional, financial, or mental advantages. You may hear prospects articulate their realized advantages as:
“I’m extra empowered to attach and talk with individuals”
“I’m extra assured in myself”
“I made and/or saved cash”
“I used to be in a position to purchase the factor I wished”
“I do know extra about my pursuits and passions”
“I used to be entertained”
Buyer outcomes are owned by prospects and skilled by customers. These outcomes are the results of their very own selections to deploy their restricted time, consideration, and cash.
Whereas prospects and customers are most frequently the identical individuals in a B2C product context, they are often completely different individuals in a B2B or enterprise product context.
Lastly, buyer outcomes are ENABLERS of product outcomes by way of the worth proposition of the product.
You may be questioning: how do merchandise have outcomes? Product outcomes are certainly much less intuitive than buyer and enterprise outcomes as a result of we don’t usually consider merchandise as being implicitly motivated to pursue their very own progress and betterment.
It’s necessary to acknowledge that prospects and companies have an oblique relationship by way of the product being bought. Each prospects and companies make selections to behave relative to the product.
A buyer comes to a decision to buy and undertake a product based mostly on its perceived worth proposition and the relative trade-offs they face with their time, consideration, and cash. Equally, a enterprise comes to a decision to construct and preserve a product based mostly on its forecast of buyer adoption and enterprise success.
What’s extra, a realized buyer final result doesn’t instantly translate to a enterprise final result. Actually, a product might be wildly priceless for purchasers however not generate enterprise outcomes resulting from a poorly match enterprise mannequin. The other might be true too: a product with an excellent enterprise mannequin could not see any adoption in any respect.
So, between a enterprise and its prospects lies an intermediate set of outcomes: product outcomes. Product outcomes reveal how compelling your worth proposition is whereas controlling for the enterprise mannequin “variable” within the equation.
To place a finer level on the definition, product OUTCOMES are captured as adjustments in consumer habits with the product. They’re usually measured by metrics equivalent to adoption, utilization, or engagement. These metrics may embody sentiment metrics.
Product outcomes are LEADING indicators of enterprise outcomes. In the way in which {that a} product’s “North Star” displays the consumer’s “aha” second of worth realization, product outcomes are the realm of North Star Metrics.
Lastly, product outcomes are reworked into enterprise outcomes by way of the enterprise mannequin of the product.
Enterprise outcomes are skilled by the enterprise. They’re outlined and owned by enterprise house owners or the C-suite.
Enterprise outcomes are usually measured with metrics like income, revenue, market share, and churn. They’re achieved by way of contributions from all enterprise capabilities: gross sales, advertising and marketing, finance, product growth, buyer companies, and extra.
Enterprise outcomes are LAGGING indicators of enterprise and product exercise, that means that they mirror actions which have already occurred.
Earlier we established that prospects themselves consider and personal their very own outcomes. If a buyer’s alternative to make use of or purchase a given product doesn’t adequately produce their desired outcomes, that buyer will take their time, consideration, and cash elsewhere.
We additionally famous that enterprise house owners and/or the C-suite owns enterprise outcomes as they maintain organizational management and financing over all the contributing enterprise capabilities.
That leaves us with product outcomes. A perfect alignment of product final result possession is one by which the roles closest to the event of the product, and the worth it affords to prospects, personal product outcomes.
By way of job capabilities, that’s the cross-functional product growth staff: product administration, engineering, design, and doubtlessly different operationally built-in roles (enterprise analysts, product ops, and so forth.).
Nevertheless, a product growth staff can’t merely construct adoption, utilization, engagement, and sentiment. They’re beholden to prospects realizing their outcomes by way of the worth proposition of the product.
This brings us to the matter of focus, and maybe a very powerful takeaway of this text: whereas a product growth staff ideally owns product outcomes, they have to make sure that what they construct (their day-to-day focus) produces buyer outcomes to strengthen a compelling worth proposition.
Product growth groups OWN product outcomes, and BUILD TOWARDS buyer outcomes.
You absolutely seen the arrows indicating the directionality between outcomes. I hope this made some quick intuitive sense.
Merely put, you may’t have enterprise outcomes with out product outcomes, and you may’t have product outcomes with out buyer outcomes. Nevertheless, with the the precise channeling and move (by way of the working relationships described above), every final result could cascade into the subsequent.
Whereas it’s solely legitimate to think about your worth proposition as a part of your small business mannequin (the favored Enterprise Mannequin Canvas consists of worth proposition as an enter), a worth proposition can exist and not using a enterprise mannequin. A price proposition and not using a enterprise mannequin may very well be regarded as a present or a favor.
Charity apart, the 2 necessary “move” rules listed here are:
- As every kind of final result builds on the belief of the prior final result and cascades into the subsequent, the pure focal place to begin on the Final result Chain is buyer outcomes
- It’s not sustainable to maneuver backwards throughout the chain
What do I imply by transferring “backwards” throughout the chain? Shifting backwards means forsaking the influence on buyer outcomes and your worth proposition for a deal with product or enterprise outcomes.
I’ll acknowledge that in some circumstances, it’s doable (often quickly) to use issues like product dependency, habit, or excessive switching prices. Nevertheless, even these conditions should not with out moral implications, damaging externalities, or different problematic penalties. Moreover, it opens the door for opponents to supply a extra compelling worth proposition.
All product growth efforts must be motivated by an alternative to make progress in direction of buyer outcomes in ways in which work for your small business.
A product imaginative and prescient and mission ought to inform the scope of buyer alternatives which are related to the product and enterprise outcomes you’re attempting to attain. For instance, a product chief may job a product growth staff with conducting the result: “improve adoption of the Whiz-bang Module”.
The style by which “improve adoption of the Whiz-bang Module” impacts enterprise outcomes by way of the enterprise mannequin of the product must be properly understood by the product growth staff and enterprise leaders alike. The Whiz-bang Module technique also needs to learn by insights on why it issues to prospects.
Armed with this route from their product chief, the cross-functional product growth staff could then start discovery of alternatives on buyer wants, wishes, and issues which are related and relevant to the Whiz-bang Module.
The next diagram is a model of Teresa Torres’ Alternative Resolution Tree mannequin. You’ll discover that buyer worth alternatives are organized in opposition to a product final result on high. An expanded diagram may embody a number of product outcomes, every with their very own alternative and resolution timber under.
