Product Goal is an Intermediate Strategic Goal

The Evidence-Based Management Guide  describes not only a Strategic Goal  but also an Intermediate Strategic Goal  that is needed to evaluate and adapt your progress towards your intended visions of your product.

The key to realising an agile mindset within the business is the idea of experimentation and that we don’t know where we want to get to, largely because the future of our business is clouded in the fog of war. There is always a high degree of uncertainty of the future and nothing has illustrated that more in recent times than the COVID-19 pandemic. Every business had to reassess its Strategic objectives more than normal, and normal is often a lot.

The fog of war (German: Nebel des Krieges) is the uncertainty in situational awareness experienced by participants in military operations. The term seeks to capture the uncertainty regarding one’s own capability, adversary capability, and adversary intent during an engagement, operation, or campaign. Military forces try to reduce the fog of war through military intelligence and friendly force tracking systems.

Wikipedia

Since presenting Evolution not Transformation: This is the Inevitability of change  I have come to realise more and more that it is the Business and Executive leadership that is holding back the retirement of the traditional practices that were developed to manage factory workers  in favour of those needed to manage cognitive work. Even a cursory look at many of the modern organisations that are able to adapt to business changes shows a far greater success than other more traditionally run businesses. Think Spotify, Zappos, Microsoft, Apple, Google.

We need to adopt the key practices of Product Discovery  that is adapted for the modern world. These are:

• Outcome over Output - In order to reassess our existing management practices we need to ask the question “Does the practice increate our output or outcome?”. Don’t be trapped into delivering lots of poorly made, poorly targets deliverables. You want your smart creative people spending time on the valuable outcomes that change your customer’s behaviour to benefit the organization. Some examples of traditional practices that were developed to maximise output rather than outcome are; Task and Bonus, Departments (Sales, Marketing, HR, Engineering, Test), Work Breakdown Structure, progression through salary and job title. if you are not running a factory during the industrial revolution then you may need to reevaluate the impact of these practices on your desired outcomes. The Standish Group in Boston has an annual report that consistently shows, through data analysis, that traditional project management practices (Prince2/PMI/other) have a negative impact on your organisation’s ability to deliver value in cognitive work like Software, Sales, and Marketing.
• Investment Opportunities - We still need to budget but instead of traditional project-based that falls into the trap of output over the outcome, we need a new model that reflects Outcomes and Opportunities for discovery that will make our business more successful. This new Budgetary model can revolve around Delivery Teams that represent our investment. As yourself how many teams are we willing to invest in discovery for any given opportunity? Over the course of a year, you may readjust where the Delivery Teams spend their time based on what you learn. Stop investing Delivery Teams time in areas that it is clear that you are not getting an adequate return on investment. Each year we can assess how many teams, in each of our value streams, we are willing to fund.
• Experimentation - There are no failures only learnings and our goal needs to be to minimise the cost of these learnings and maximizing the success. Short iterative experiments in any investment opportunity. A good example is the Azure DevOps teams at Microsoft where they have ~42 teams that they can invest in Azure Pipelines, Azure Boards, Azure Repos, and other verticals in the product. Each vertical will have its Intermediate Strategic Goal (Product Goal) and a budget of “headcount” (read teams) that they can use to invest in moving towards that Intermediate Strategic Goal, one experiment at a time. If leadership believes that they are not making enough progress in a particular vertical they are free to relocate teams to address this based on market analysis.
• Hypothesis Driven - To understand the outcome of the experiment we need some sort of hypothesis. This is like an assumption, but with one important distinction; We have a measure that will tell us if our assumption is true. It is the accountability of Product Management (likely as a Product Owner) to validate their assumptions using data and minimise the spend to get there. Running many small experiments where the Delivery Teams create small valuable outcomes that you can test with real users and validate is imperative.

We need to reassess the use of the terms Scope & Failure in light of this new reality and evolve into a lean data-driven organisation based on experimentation and discovery that allows us to adapt to business changes as they arise!