Mapping Business Outcomes to Product Outcomes: A Strategic Approach for Success

Author: Anup Kumar Pallar

Introduction:

In the endless-evolving landscape of product development, customer satisfaction and business success is an art that product teams must master. Creating products that customers love is undoubtedly crucial, but without a clear understanding of how these efforts align with overarching business objectives, those products may fall short of achieving their true potential. This is where the practice of mapping business outcomes into product outcomes comes into play — a strategic approach that bridges the gap between vision and execution.

Business Outcomes vs Product Outcomes:

Successful product development is intrinsically tied to business objectives. Every product endeavor must be grounded in generating business value. This symbiotic relationship ensures that product teams maintain a clear understanding of the core WHY behind their efforts. However, gaps can emerge in this process. In the worst scenario, research and solutions are pursued without aligning with the product and business roadmap, potentially missing opportunities that align with company needs.

There are instances where a company may overlook or not communicate its business roadmap effectively, leading to a detachment between product efforts and business expectations. This disconnect could prove detrimental in the long run. Consider a situation where a product team lacks access to the product roadmap and inadvertently contributes directly to the business roadmap. This can result in a lack of insight into customer personas, market dynamics, value propositions, and competitors. While continuous product discovery can unearth opportunities, without a clear product strategy, there’s a risk of turning the product into a disjointed assortment of features, causing loss of focus and ultimately product failure.

Hence, the role of a product leader is to ensure that every product initiative contributes to product outcomes, which, in turn, drives business success. This alignment involves understanding customer needs and altering their behavior to benefit both customers and the company. For instance, if a company aims to boost revenue by targeting a new market segment with a weight loss solution, the product team must conduct market research, create a tailored strategy, and continuously seek ways to meet the needs of this segment.

This approach creates an interconnected web where product outcomes feed into business outcomes. By placing customer needs at the core and ensuring alignment, the product team takes ownership of product outcomes and consequently drives business success. This clarity facilitates progress tracking and draws a direct line from product achievements to business gains.

How we can achieve Business Outcomes through Product Outcomes

A good product discovery starts with a clear desired outcome. A well-defined deliverable is the product team’s focus and guide for their product development efforts. This helps the team quickly identify and save time and energy for the most important initiatives.

However, we often find product teams responsible for business results. We rarely see teams held accountable for product results. To explain the difference between these two terms: Business performance is a metric that drives the business forward, while product performance is a metric that helps us understand whether the product is driving the business forward.

Examples of business outcomes include:

· Increase income

· Increasing profits

· Margin of growth

· Increase market share

· Reduce operating costs

Examples of product results include:

· Improving search click-through rate (CTR).

· Improve conversions in Shop Channels

· Increase time spent/per user

Product teams struggle to deliver business results because many companies haven’t taken the time to define their strategy. Instead, product teams should focus on product results rather than business results because:

· Business outcomes are lagging indicators and measure the performance of the company

· Product results are leading indicators and measure human behavior

· Product results are influenced by the team

Business Outcomes are Lagging Indicators

What is a lagging indicator? It has already happened. Once you see revenue (or the lack of it) — whether it’s on your dashboard, cash in the bank, or the cancellation notice from a rejected customer — it’s too late to take corrective action. Your product team or company has already made the choices that led to this moment.

Let’s focus on income as an example. If your company’s goal is to grow revenue, someone in management needs to have a theory about how and why revenue grows. This should be factored into your company’s strategy. Here are some questions to help you imagine different scenarios.

· Are you increasing your revenue because you have more products to sell by capturing more total addressable markets (TAMs).

· Are you increasing your income because you can command a higher price for your products this year than last year?

· Is your revenue growing as your business gains new market share and new budgets/wallets?

Some behavioral changes that can be determined based on product results may include:

· Customers buy faster than now, so we generate revenue faster — product features that promote this can include reminder notifications, urgent messages (eg only 10 units left), etc.

· They buy more (more products, more licenses, more months) — product features that promote them can be cross-selling referrals (eg. those who bought this also bought)

· They will pay more for the same product — product features that encourage this can be things like creating an extension discount, subscription pricing, etc.

Product results are leading indicators and measure specific behavior change, and leading indicators ultimately lead to lagging indicators or trading results.

Product Outcomes are Leading Indicators:

Anticipated human behavior is a critical link between product performance and business performance. Recognizing that business results do not occur without expected changes in human behavior is an effective way to align managers with the unmet needs of the people (customers, prospects) they want to behave differently. This helps product teams because outputs become things that people do that are observable and measurable.

This paradigm shift in behavior change enables product teams to transform any residual business outcome into desired human behavior. New or different human behavior becomes a product result, which focuses on the work of the product team.

Conclusion:

Mapping business outcomes to product outcomes form the backbone of effective product management. It empowers product managers to translate high-level business goals into actionable steps, ensuring that the development efforts are strategically aligned and impact the company’s success. This holistic approach bridges the gap between strategic vision and practical execution, resulting in products that not only meet user needs but also drive tangible business value.

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