Why Outcomes?

Business thought leaders have been advocating for managing by outcomes for decades. Peter Drucker, a renowned managerial thought leader, wrote about its benefits countless times¹². Andy Grove, the former CEO of Intel, utilized the practice at Intel and wrote about it in his best-selling book High Output Management. More recently, Google, Google Ventures¹³, and John Doerr¹⁴, a venture capital partner at Kleiner Perkins, have popularized the topic again with their advocacy for objectives and key results (OKRs)¹⁵, one flavor of managing by outcomes. You’ll hear from prominent thought leaders in most industries and broadly across the technology sector (including from me) that shifting from dictating outputs to managing by outcomes is critical to a company’s success.

When we manage by outcomes, we give our teams the autonomy, responsibility, and ownership to chart their own path. Instead of asking them to deliver a fixed roadmap full of features by a specific date in time, we are asking them to solve a customer problem or to address a business need. The key distinction with this strategy over traditional roadmaps is that we are giving the team the autonomy to find the best solution. If they are truly a continuous-discovery team, the product trio has a depth of customer and technology knowledge, giving them an advantage when it comes to making decisions about how to solve specific problems.

Additionally, this strategy leaves room for doubt. A fixed roadmap communicates false certainty. It says we know these are the right features to build, even though we know from experience their impact will likely fall short. An outcome communicates uncertainty. It says, We know we need this problem solved, but we don’t know the best way to solve it. It gives the product trio the latitude they need to explore and pivot when needed. If the product trio finds flaws with their initial solution, they can quickly shift to a new idea, often trying several before they ultimately find what will drive the desired outcome.

Finally, managing by outcomes communicates to the team how they should be measuring success. A clear outcome helps a team align around the work they should be prioritizing, it helps them choose the right customer opportunities to address, and it helps them measure the impact of their experiments. Without a clear outcome, discovery work can be never-ending, fruitless, and frustrating.

All of this sounds fantastic. Is managing by outcomes really as good as it sounds? This is a hard question to answer. Industry best practices are clear. The best teams are adopting an outcome-focused mindset. However, the research is limited and conflicting. In this chapter, we’ll start with what we can learn from industry practice, and then we’ll look at how the research either supports or refutes that practice.