Josh Seiden and Melissa Perri discuss the challenges companies face in transitioning to an outcome-centric approach, emphasizing the importance of understanding impact and outcome. They highlight the significance of focusing on data, avoiding fixation on processes, and storytelling for shifting focus. Additionally, they explore the value of evidence-based decision-making, data-driven strategies, and creating psychological safety in organizations.
Legacy work management practices hinder companies from adopting an outcome-centric approach.
Identifying user behaviors that drive value is crucial for defining successful outcomes.
Creating models and telling stories can help teams align towards achieving meaningful outcomes.
Deep dives
Understanding Key Business Levers and Systems
It is crucial for product teams to comprehend the key levers within their business model to drive success effectively. This involves building a model that identifies and understands these essential elements. Product success is not solely reliant on product managers but also on organizational support, processes, and cultures that contribute to delivering value to customers.
Transitioning from Outputs to Outcomes
Moving from measuring outputs like features developed and velocity to focusing on meaningful business and customer metrics is a significant shift. Organizations face challenges in shifting their mindset towards outcome-centric approaches due to legacy work management practices and the inherent difficulty of prioritizing outcomes. Defining and understanding outcomes, with a focus on behavior change that adds value, is crucial for effective product management.
Identifying and Measuring Outcomes in Product Management
Defining outcomes involves recognizing significant user behaviors that lead to desired results. By examining leading and lagging indicators in a customer journey like foot traffic in a store or customer interactions before a purchase, product managers can pinpoint key behaviors that impact overall outcomes. Measuring outcomes involves understanding and influencing these critical user actions for improved product success.
The Role of Models and Storytelling in Business Analysis
Creating models and telling cohesive stories about user interactions and business processes are essential for effective product development and decision-making. Developing clear models that outline how customers engage with a product or service can help teams identify crucial metrics and areas for improvement. Storytelling and modeling also assist in unifying team understanding and alignment towards shared business goals.
Cultural Shifts for Outcome-Centric Organizations
Achieving outcomes-oriented strategies requires a culture that promotes risk-taking, psychological safety, and learning from experiments. Organizations need to foster an environment where team members feel secure in challenging assumptions, running tests, and learning from failures. Leaders play a pivotal role in modeling uncertainty and collaborative learning to encourage a culture focused on achieving tangible outcomes.
Josh Seiden is Melissa Perri’s guest on this episode of the Product Thinking Podcast. Josh is a consultant and bestselling author of Lean UX, Sense and Respond, and his latest book, Outcomes Over Output: Why Customer Behavior Is the Key Metric for Business Success. In this week’s show, he and Melissa explore why saying “outcomes over outputs” is a lot easier than actually committing to it in practice, measurable outcomes, correlation versus causation, the problem with getting fixated on process, and how to keep your team focused on outcomes as a leader.
Here are some key points you’ll hear Melissa and Josh talk about:
One of the challenges companies face that prevents them from becoming outcome-centric is the legacy of how they manage their work, Josh says.
“Change in human behavior creates value, which helps us to take a huge step forward.”
Josh advises that you build a logic model with impact and outcome. Identify the leading and lagging indicators that help you determine if your business model could be successful.
Teams get so fixated on processes or methods that they don’t look at the big picture in what they’re trying to achieve and the whole ecosystem of their market. What data is out there already so that you don’t have to reinvent the wheel?
The surprising power of the words, “just tell me a story…” to help shift focus to data and figuring out what outcomes to go after.
Josh talks about the success of the book and what he might add to a second edition.
Josh says that most companies need to develop a risk-tolerant, psychologically safe environment, where employees are allowed to experiment freely to find what works best for the company.
Resources:
Josh Seiden on LinkedIn
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