Outcomes Are the Result of a Two-Way Negotiation
Setting a team’s outcome should be a two-way negotiation between the product leader (e.g., Chief Product Officer, Vice President of Product, etc.) and the product trio.
The product leader brings the across-the-business view of the organization to the conversation and should communicate what’s most important for the business at this moment in time. But to be clear, the product leader should not be dictating solutions. Instead, the leader should be identifying an appropriate product outcome for the trio to focus on. Outcomes are a good way for the leader to communicate strategic intent. For example, if Sonja’s team is focused on increasing the number of dogs who like the food, her product leader can encourage her to keep focusing on the number of dogs who like the food broadly. Or, based on the strategic needs of the business, the leader might refine this outcome to have the team focus on specific breeds or strategic geographic regions. The key is that the leader should not narrow the scope so much that the team is tasked with a traction metric—engagement with the transition calendar.
The product trio brings customer and technology knowledge to the conversation and should communicate how much the team can move the metric in the designated period of time (usually one calendar quarter). The trio should not be required to communicate what solutions they will build at this time, as this should emerge from discovery.
For example, Sonja’s team, if asked to focus on a specific customer segment, might summarize what they know about that customer segment, share how successful past attempts to get dogs to like the food in that customer segment have been, and estimate how much impact they can have on the metric in the designated time period (e.g., we can increase the number of dogs in that segment who like the food by 10% in the next three months).
This then sets the stage for the two-way negotiation. If the business needs the team to have a bigger impact on the outcome, the trio will need to adjust their strategy to be more ambitious, and the product leader will need to understand that more ambitious outcomes carry more risk. The team will need to make bigger bets to increase their chance of success, but these bigger bets typically come with a higher chance of failure. Similarly, the product leader and product trio can negotiate resources (e.g., adding engineers to the team) and/or remove competing tasks from the team’s backlog, giving them more time to focus on delivering their outcome.
A particular scenario of note is when teams are assigned an outcome for the first time—as we saw in Sonja’s story. In these cases, the product trio will need some time to learn what might move the metric. This is why a stable product trio focused on the same outcome over time is so critical. Every time we mix up the team or change the outcome, we take a learning tax as the team gets up to speed.
Encouraging a two-way negotiation between the product leader and the product trio ensures that the right organizational knowledge is captured during the selection of the outcome. It, however, has another benefit. Bianca Green, business faculty at University of Twente (in the Netherlands), and her colleagues found that teams who participated in the setting of their own outcomes took more initiative and thus performed better than colleagues who were not involved in setting their outcomes16. This is an area where the research supports industry best practice.