Beyond Features — Chapter V
Outcome Orientation
Outcome Orientation
Originally published in GoRetro
After an extensive workshop, Odin Enterprises had new directions. Lagertha managed to show Ecbert the importance of focus and clarity. Now, teams Jorvik and Kattegat know what to work on and, most importantly, what not to. The challenge now lies in succeeding with the pressure on their shoulders.
Ivar and Björn understand they will have to work differently than they used to. Both teams cannot assume impact without measuring the outcome. Until now, they’ve been acting as feature machines. Yet, they’ve got to move from output maximizes to value creators. What frightens Björn and Ivar is they don’t even know where to start; their hope lies on which cards Lagertha hides under her leaves.
As the workshop concluded, Lagertha promised to help team Jorvik and Kattegat shape their work mode to increase the odds of creating value. Everyone expects her to open new perspectives and inspire the team to take a different course than they have so far.
Start With the End In Mind
The day after the workshop, Lagertha arrived earlier in the office; she knew she had to guide Ivar and Björn. Otherwise, they both would fail. She prepared a meeting room for a morning session with Ivar and Björn. She wrote the goals agreed upon during the previous workshop on the whiteboard.
At 08:53, Ivar read a message on his table “Please, come to Thor’s meeting room.” Shortly after that, Björn arrived and got the same message. As they walked into Thor’s meeting room, they saw Lagertha smiling; they smiled back and asked, “What’s up?”
Lagertha: “Today, we set teams Jorvik and Kattegat on a successful direction. I want to share how you can lead this team’s successes.”
Ivar: “That sounds good. I was about to ask you where we could start. Although we have a goal, I don’t know where to begin.”
Björn: “I have the same doubt. And now our teams know we cannot work the same way, yet we have no idea how to work differently.”
Lagertha: “No worries. We will figure that out. The most important aspect is that we have a goal to pursue and support our CEO and key business stakeholders. Now, we need to work backward.”
Ivar: “Yes. And how are we supposed to do it? For example, our goal is to become an attractive marketplace for partners. We agreed on two metrics: 50% of partners can activate their offerings without talking to anyone and reduce partner activation time by 70%, but measuring such metrics will take quite a while.”
Björn: “That’s my confusion as well. I fought hard for this; I always wanted to be empowered and make decisions to reach a goal instead of delivering features. But now, we’ve got a goal, and I’m staring at it, unable to decide which step to take. Now I feel the burden of accountability; we better figure out how to reach our goals.”
Lagertha: “OK! Shall we take team Jorvik as a starting point?”
Ivar: “That would be great.”
Björn: “Sure. I can learn from it and then apply with team Kattegat.”
Lagertha: “Have you ever heard about DMAIC?”
Björn and Ivar looked puzzled. And looked at them and said: “That’s how we will change how we work for the better.” Lagertha went to the whiteboard and wrote: Define Measure Analyse Improve Control.
Ivar: “Sounds interesting, and we already have defined our goal, so I assume now we need to figure out how to measure it.”
Lagertha: “Not that fast, Ivar. We know the end of the whole story. Now, we still need to define the metrics that will help us get there and define how to measure them as fast as possible so that we can analyze and improve their results.”
Defining Actionable Metrics
Björn and Ivar were curious about DMAIC but still skeptical about how to react quickly as this is unfamiliar to them. Lagertha wore her teacher’s hat and gave them a lesson about metrics.
Metrics are helpful when they are actionable. However, it’s easy to fall into traps while measuring results. For example, if Team Jorvik only measured partners activating products, it would take too long for them to learn and improve. Such metrics are laggard ones; you know the problem once it’s too late. However, when you ask what would lead to a specific result, you can define actionable metrics, which are the leading ones.
The faster you learn, the sooner you succeed.
On top of laggard and leading metrics, Lagertha named the importance of understanding the circle of influence. What can Odin Enterprises directly impact and what not? For example, the conversion rate is something external; only end-users can decide whether to conclude the purchase or not; this would be an output metric. Meanwhile, Odin Enterprises can reduce the number of searches with no results, and this would be an input metric as the influence lies internally and not externally.
After such a lesson, Björn and Ivar understood they had to come up with leading metrics and learn from results as fast as possible. Also, they understood the importance of categorizing metrics into input and output.
Feeling convinced, Ivar when to the whiteboard and tried to name the metrics he would use for team Jorvik.
Output Metrics
Page views: number of leads arriving on the partner landing page
Conversion funnel: rate of leads converting into partners
Offer activation: rate of partners making their offers available at our marketplace
Sale activation: rate of partners who are effectively selling
Idle partners: rate of partners inactive
Input Metrics
Number of partners contacted: a total of potential partners reached
Search availability: rate of search results with the available offers
Partner form time: required time to fill out the partner forms
Average Partner Revenue: evaluate if the average revenue per partner grows on a monthly rate
Ivar looked at Björn and Lagertha as he enthusiastically explained his mean by each metric. He told them he understood that output metrics would be the ultimate goal, but the actions taken by Odin Enterprises would be crucial to reaching the expected results. That’s why he would like to focus on input metrics that lead to desired results.
Lagertha looked surprised and excited about the results; she said, “Ivar! You amazed me with how fast you got it! I am impressed by how quickly you could connect the dots and develop such valuable metrics. To make even it more actionable, I need to challenge one metric, Average Partner Revenue. It seems like a laggard metric and outside your control; how would that help you make decisions to reach your goal?”
Ivar: “Lagertha, I imagine if partner revenue isn’t growing, it means something is going wrong, and I could act upon it.”
Lagertha: “That’s exactly the point. What would something be? It would help if you got that before the problem happened. Revenue is a laggard metric that takes too long to measure.”
Ivar: “Hum. You’ve got me. That’s alright. So I want to measure the efficacy of our onboarding and product activation. If that fails, no revenue will come. So I would move this metric to output and create a new one for input metrics. Product activation time: required time to activate products. What do you think of it?”
Lagertha: “Now you nailed it down. If product activation time isn’t satisfactory, you can act immediately and change the revenue fate.”
Björn: “Great job Ivar! And I am with you on this journey. Some metrics imply we need to collaborate closely to work on them. We must work together if we don’t want to fail.”
Ivar: “Thanks Björn. Now I understand the importance of focus. Reflecting on the metrics, I can understand the amount of work ahead of me to reach valuable results. I’d have no chance of success if I had to split my attention between two completely different audiences. I’m confident I know where to start.”
Björn: “After looking into your metrics, I think I can do the same exercise for team Jorvik. Thanks, Lagertha, for enlightening us with your expertise. Honestly, we’d be doomed without you.”
Lagertha: “You both are great. It’s just a matter of having the right ingredients available. Now, I’m curious to see how team Jorvik and Kattegat will embrace the new way of working.”
After this exchange, Lagertha left the room. Björn and Ivar knew what to do and where to start. They could see the light at the end of the tunnel. The only question was how fast they could learn and how to begin changing how their Sprint would unfold.
How will team Jorvik and Kattegat react to the empowerment they’ve received?
Until today, they’ve never measured the results and only put their energy into building features. Now, it’s different. They talked a lot about metrics but have no defined features.
During the next chapter, Ivar and Björn will work on their first Sprint, focusing on the outcome. They will focus on learning instead of building. The job won’t finish after releasing features but only after measuring results. Will they know how to do it? Wait for the next chapter to learn more about it.
The story continues …
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