I talk a lot about the importance of maximum outcomes with minimum output.
And I realize it’s one thing to talk about focusing on outcomes. It’s another thing entirely to actually put that idea into practice.
So the next couple of weeks I’m going to take a look at how you can put a focus on outcomes into action.
Use outcomes to help you decide what investments to make
This week may seem a tad more idealistic if for no other reason that you may not find yourself involved when an initial decision gets made to start some work.
I’m going to refer to that as an investment decision.
If your organization still organizes work by projects that investment decision means deciding whether to start a project and hopefully finish, a project intended to accomplish a particular result. The investment is in terms of money, people’s time, and other resources. This is the situation I’m going to explore today because that’s how most internal product work is started, even if the organization looks at itself as “product-focused.”
I chose to use the word investment decision to keep away from some baggage that the project term often drags along with it.
So even though your organization is still making discrete decisions about whether or not to pursue an investment with a defined timeframe, budget and scope, there is still value in approaching those decisions through an outcome lens.
What you want to do is frame the decision around whether you should make an investment in order to satisfy a particular need. The trick is getting all the people involved with that decision to build a shared understanding about what that need is and decide that it should be solved within certain constraints (for how much and by when) rather than making an explicit decision about how that need is satisfied.
That is, I realize, easier said than done.
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Structure your investment decision around outcomes
Most organizations that make investment decisions with a project paradigm tend to decide whether or not to do a specific project, meaning they are deciding whether to implement a specific solution. You’ll know when your organization is falling into this trap you discuss investments similar to these:
- Rewrite a 20 year old client server app that supports a crucial business process
- Bring customers for a given product line on the same ordering system that three other product lines are on
- Introduce an express pickup service
On the surface, these all appear to be good investments, and it should be easy to tell when each is done. Right?
Sure, you could claim that the rewrite is done when the new product is up and running. But does that mean you have to recreate all of the functionality on the existing system, even if something isn’t relevant after 20 years?
You know you’re done moving customers over to a new ordering system when they are on the new ordering system. (Yes, that is a bit tautological) But do you know for sure that moving the customers to the new ordering system is going to accomplish what you set out to do? Do you know what you set out to do? Let me rephrase that. Do you know why you wanted to move customers over to a new ordering system?
You know you’re done introducing a new express pickup service when people can use it. But again, how do you know that service was a success.
To know when those investments were successful, you need to know what need each investment as trying to solve. You need to know why it’s worth making an investment.
You need to understand the outcome.
The best way I’ve found to drive investment decisions with an outcome focus is to have a discussion with the person or people who are proposing the investment, key stakeholders who are impacted by the investment, and the people who ultimately decide whether or not to make the investment.
I gather those people in a room, and write 10 questions up on a white board, leaving plenty of space between each question to write notes and answers.
The questions I like to use come from my variation of Marty Cagan’s opportunity assessment to guide the discussion around why to consider the investment:
- Exactly what need will this satisfy?
This question may be difficult to answer, but it’s very important to get it right so that you can ensure that you are trying to satisfy a clearly defined need and don’t just have a solution in search of a problem.
- For whom do we satisfy that need?
This question seeks to identify the key stakeholders and the people who will have a vested interest in the product.
- What can be gained from satisfying this need?
This question identifies the benefits to be gained from the product. Don’t feel as if you need a highly precise answer at this point. An order-of-magnitude answer is usually good enough to determine whether the need is worth satisfying.
- How will we measure success?
This is a way of identifying outcome based metrics relevant to the product.
- What alternatives are out there now?
This is another way of asking what would happen if you don’t satisfy this need, as well as identifying different ways of satisfying it.
- Do we have the right people to satisfy this need?
This question seeks to identify whether you have the appropriate skill sets working on the team, and if not, whether you need to bring in help from inside or outside the organization.
- Why now?
This question asks what time constraints, if any, exist for delivering the product.
- How will we encourage adoption?
This is to get you thinking about change management and implementation.
- What factors are critical to success?
This singles out any specific requirements identified during the discussion or subsequent analysis. This question is not meant to identify the solution; rather, it highlights any dependencies or constraints that may exist.
- Is this problem worth solving?
This question sums up the discussion. Based on what you’ve discussed up to this point, is this project worth it?
Start with the first question and don’t move to the next question until you have agreement on what the need is, or if you identified more than one you know which of those need(s) is the most important.
That need will drive the answers to the remaining questions. So it’s important to settle on one.
I should note that you may run into a situation where you get about halfway through and the group’s understanding of the need changes. If you need to circle back and clarify, do that.
If the group is having difficulty expressing a need, you may want to use the problem statement exercise as a way of stating the need. That way, you’ll end up with an answer to the first question that goes something like:
- The problem of <Describe the problem>
- Affects <Who are the stakeholders affected by the problem>
- The impact of which is <What is the impact of the problem?>
- A successful solution would <List the critical benefits or key capabilities that the solution–however implemented–must have to be successful>
If you structure your discussion this way and get to question 10, you’ll no doubt get some push back that “we can’t decide whether it’s worth it without knowing how much it will cost.”
If you get that push back, reframe the question. Instead of trying to figure out how much it’s going to cost to fix – you can’t know that with any reasonable accuracy at the point when you should be having this discussion – ask how much people are willing to invest.
It’s a subtle difference, but an important one. You’re providing a constraint that may actually lead to a more innovative solution.
Make outcome informed decisions
I’ve had experience with investment decisions very similar to the examples I mentioned above.
I had the opportunity to lead an organization through a discussion laid out as I described above to discuss introducing a service similar to the express pickup service. By talking through the ten questions, we uncovered that there wasn’t a clear understanding of the need the investment proposer was trying to address.
Once the group did determine the need they were trying to satisfy, they determined the originally identified solution would not have addressed that need. The organization ended up avoiding a great deal of work and were able to focus efforts on other efforts that were addressing clear needs.
This is the power of outcome informed decisions. Avoid doing unnecessary work before you even start.
Coming up next week
There are going to be times when you don’t have an opportunity to head off an ill conceived investment at the pass.
Next week I’ll take a look at how you can use outcomes to make the most out of an investment that your organization has already decided to make.