Outcomes, Outputs and OKRs, what do these mean? Internalizing the difference between Output and Outcome distinguishes a project management mindset from a product management mindset. Chapter 3 of Continuous Discovery Habits is a great primer. Let’s continue with the premise that we are product managers at a video streaming service, like Netflix.
Outcome is a change in human behavior, that drive business results.
- Outcomes require you to define a customer and have a nuanced understanding of your customer.
- There are layers to outcomes and it is helpful to scope an outcome to who can drive it.
- A product team focuses on a Product Outcome, which is within their control. A Product Outcome is a leading indicator that drives a Business Outcome. For example: increase number of monthly 20+ minute viewing sessions by sports fans.
- A Business Outcome is the business result from changes in customer behavior. It is a lagging indicator and not typically a daily focus of a product team. For example: increase recurring revenue.
OKRs are a flavor of managing by outcome.
- Objective is the qualitative direction and Key Result is the quantitative measure.
- Objective Example: become the best platform for sports fans to watch their game.
- Key Result Example: increase median number of 20+ minute viewing sessions per month for sports fan by 1 session.
Opportunity is a customer need, pain point or desire.
- Opportunity is the step between Outcome and Output.
- The opportunity space is your nuanced understanding of your customer.
- Example opportunity: I can’t find anything to watch.
Output is what is built; hopefully a solution.
- An output may solve an opportunity that may change human behavior that may drive business results. As a product manager, you want to increase the chance of the mays.
- Example solution: Live Sports is viewable on the platform from partnering with local sport networks.
Opportunity Solution Tree (OST) charts the best path to your Desired Outcome; it gives you options.
- It takes significant critical thought to understand how opportunities relate to: each other, solutions, and your desired outcome.
- The OST gives you that structure: the root of the OST is your desired outcome, its children are opportunities and solutions are children of the leaf opportunities.
- The desired outcome is typically a product outcome.
- In color is an example OST.