Effective Goal-Setting without the Semantical Debate of Outcomes vs. Outputs
Frederik Vosberg
The discussion surrounding outcomes over outputs is crucial in the shift towards a product-led organization. In traditional project management, teams focus on deliverables like MVPs, features, sales slide decks, or webinars and optimize for their swift delivery.
However, transitioning as an organization to a new mindset requires some individuals to become evangelists for the new approach - in this case, thinking about outcomes, aka what we really try to achieve.
Learning this new way of thinking is incredibly challenging, and numerous forces of inertia within organizations can hinder these evangelists. Understandably, they become frustrated and fixate on the promised land the product thought leaders have taught them. This can lead to difficult and even emotional discussions between them and the rest of the organization.
In my experience, these discussions become very semantical. People may start to argue what the terms output, outcomes, and impact mean and whether a specific goal is an outcome or not. Then a discussion kicks off if we must define an outcome in the first place.
Instead, we should engage in more goal-oriented discussions.
In this article, we will dig into the first principles of goal-setting, which are the mechanics behind this semantic discussion of outcomes vs. output. We will foster alignment in the team on the outcome and the output, establish a metric that guides our work, and commit to clear actions.
Aligning on Success Criteria Without Criticizing Ideas
The first principle is the core reason why a shift to outcome thinking is so important and will sound familiar to you because this might be the discussion you are already having. Let us start with an example:
We are a team of product coaches and want to organize a webinar about "Outcomes over Output".
The action we plan: Organizing a webinar about "Outcomes over Output" for product managers in 4 weeks.
One of our team members - Steve - has been reading Marty Cagan, though. He notes that we just set an output goal. We need to define outcome goals; the best webinar is useless if no one shows up.
The team gets defensive and insecure. How can they commit to an outcome like "generated leads through the webinar" or the number of attendees if it was so hard to do it by organizing a webinar?
While Steve is right in theory, the team is stuck and is wasting a lot of energy in theoretical debates and emotional discomfort. Let us help him shift the discussion to a more result-oriented perspective.
Let us step back and have a look at the first principles of this problem: The team is trying to solve a complex and ill-defined problem. They expect two effects from their action:
- We expect that people will attend.
- We expect that our business will benefit from it.
The thing is: it is almost impossible to predict these two things when you start out and have not done any webinars for this target group.
Stephen Bungay identified in his book "The Art of Action" these three gaps when we plan for an ill-defined complex problem:
- Knowledge Gap: We cannot know everything about our customers
- Alignment Gap: There is always a gap between what we want our team members to do and what they do
- Effect Gap: We cannot predict how customers will react
There are two levers to fight these gaps: First, we need to define the outcome/effect we want to achieve. Second, we must give the teams permission to learn through early feedback from real customers and adapt. They must have permission to deviate from the original implementation idea.
But when we challenge the ideas of people, they can get offended easily.
So acknowledging that we cannot reliably plan how to achieve the desired effects (outcomes), we challenge the ideas of our coworkers. We ask why they think something would be a good idea. We want to know how they can be so sure that this webinar with this topic will lead to the desired results.
They get protective of their ideas instead of listening to you.
We don't want their guards up, so we need to make them feel safe. Make sure that this discussion is not to challenge their idea, but to be aligned on all levels. What are our ambitions with this webinar, and what people do we expect to attend?
When are you proud of our achievements when we organize this webinar? How does success look like for us?
The action we plan: Organizing a webinar about "Outcomes over Output" for product managers in 4 weeks.
Success Criteria: 40 attending Product Managers - by attending to the webinar we get a signal, that this topic is relevant to them.
Now they feel heard and share their valuable thoughts. You don't come across as pushy but interested and curious.
So, with this step, we have established an idea of what we want to do and what we want to achieve.
Establishing Learning Metrics to Guide Our Work
We are aligned on what we want to do and what results we expect from it.
We already know that the link between what we do and what we want to achieve (Success criteria) is hard to plan in advance. It's often determined by how we do what we do.
So how can we learn how our webinar should be marketed, structured, and how the exact target group looks like?
Our measurement of success (40 product managers attend) is something we measure after the webinar has been conducted; this is too late. We market the webinar, prepare it, and host it, and afterward, we know how many have attended.
This means our current goal cannot guide our learnings.
So let's define a measurement we can observe while we are preparing the webinar. This is something experienced marketers and product managers will do automatically, but this step ensures the team aligns beforehand on their ambitions and understanding of the problem area.
To do that, let's just ask: What can we observe while we work, which is a predictor of our success of 40 product managers attending?
If your team is overwhelmed by this question, think about the customer journey. What customer behavior can we observe, which must happen (and therefore is an indicator) so 40 product managers will attend?
- X Product Managers become aware
- X product managers register for the webinar
- 40 product managers attend the webinar
The critical step here for us is registration. This is something we can observe while we work, and it is tightly linked to our success criteria of 40 attendees. So how many product managers have to register so 40 of them will attend? We can calculate backward. With a show-up rate of 40%, we need 100 webinar registrations.
Our webinar is supposed to take place in 4 weeks. So we need 25 registrations per week.
The action we plan: Organizing a webinar about "Outcomes over Output" for product managers in 4 weeks.
Success Criteria: 40 attending Product Managers - by attending to the webinar we get a signal, that this topic is relevant to them.
Learning Metric: 100 registered product managers (25 per week)
This is a metric that can guide our work, and we can learn if what we do is sufficient to reach the target. Just to give you a backlink to the theoretical discussions: The learning metric is the leading indicator to the lagging success criteria - both are outcomes.
Committing to Clear Actions and Learning Which Drive Goal Achievement
The team is aligned on what success looks like and how we can learn if what we're doing has the desired effect.
When we have a lofty outcome, teams can still struggle to commit to it.
What do I mean by lofty outcomes? Our team has never organized or marketed a webinar. Now they know how they can learn if they're on the right track, but they still don't know how to acquire participants. The outcome doesn't give them enough structure to know what to do. We have barely discussed what it takes to attract attendees. So, how can they even commit to it? What if they don't make it?
First, we have to acknowledge the emotions this requested commitment elicits.
Most people aren't used to committing to outcomes. Committing to an outcome means something different than committing to delivering a webinar. If you fail to deliver a webinar, you've fallen short. This is "solely" your responsibility.
If you don't achieve an outcome, that's okay. Nobody can guarantee it. Committing means we achieve it, and if we don't, we learn what questions we should have been asking in the planning phase (e.g., how can we narrow down the target group?).
But this is scary, and people are uncertain about what they are committing to, so what helps in this situation is aligning on clear actions initially.
To do that, we brainstorm what actions you can take to achieve your learning goal of 25 registrations per week over 4 weeks (and eventually 40 product managers attending). You are looking for different strategies to evolve. Now you can choose the 2 or 3 best and try them and learn how they perform.
First, brainstorm strategies without any metrics to speed up the process (you don't have to argue about the exact number in a strategy you won't choose):
- We can message X product managers on LinkedIn, and a Y% of them respond.
- We can place an ad that converts X product managers to visit the landing page.
- We can invite X of our customers via email.
- We can share the webinar in our newsletter with X product managers.
Second, we can choose 2-3 of these strategies and commit to them for the first week. Then we can measure the impact of the strategies and learn: Is one of these strategies sufficient to achieve our ultimate goal of 100 registrations? Which one is the most effective?
The team can commit to clear actions and learning about a hypothesis. These are actions they can own!