Shifting from Outputs to Outcomes: Using Opportunity Solution Trees for Product Discovery

Introduction

In the early days of software development, discovering and defining project requirements were often left to the control of business leaders who limited it to an annual exercise. These leaders would assign large-scale projects with predetermined deadlines to specific engineering teams, leaving little room for flexibility or exploration. Unfortunately, this cascading approach often resulted in wasted effort and resources. Although the Agile revolution in 2001 brought a much-needed shift toward shorter cycle times and more frequent customer feedback, teams continue to be primarily measured by what they deliver, rather than the customer or business value they create. This focus on delivery over outcomes has led to wasting time on useless features.

To address this issue, teams must shift their focus from delivery to outcomes, defining success by the value they create for their customers and business, rather than merely shipping code on time and on budget. Once outcomes are clear, the team can explore the opportunity space, select which opportunities to pursue, and discover the solutions that will address the opportunities and drive the desired outcome. To frame this discovery process in a structured way, teams can use a tool called the Opportunity Solution Tree (OST). This tool can help identify the most promising options and prioritize their efforts accordingly, creating more value for their customers and business.

OST is a simple and effective way to visually represent the paths you might take to reach a desired outcome. It encourages you to shift from asking “whether or not” questions to compare-and-contrast questions, avoiding common biases such as narrow framing, confirmation bias, and overconfidence that lead to poor decisions. In the rest of this article, we will explore the various stages of the discovery cycle and provide examples from a product team working on a streaming service application.

1. Define your outcomes
2. Map the opportunities
3. Explore solutions
4. Measure

1. Define your outcomes

There are two types of outcomes: business outcomes and product outcomes. Business outcomes are high-level measures related to an organization’s goals, which typically require coordination across multiple business functions to improve. On the other hand, product outcomes measure a change in human behavior that drives business outcomes and are usually within the control of the team responsible for the product.

To shift towards a more outcome-focused mindset, it’s essential to ask about the business context and connect the dots between the business outcome and potential product outcomes. For successful product development, leaders must identify an appropriate product outcome for a team to focus on. It is also crucial to choose a product outcome that the team can influence the most. At this stage, the team should not be required to communicate what solutions they will build, as this should emerge from discovery.

Research has shown that teams that set specific, challenging goals outperform those that do not. It is essential for the team to believe that they can achieve the goal, and continuous feedback on their progress is crucial. Goals should also be measurable, but challenging goals can decrease performance if the team does not have strategies for how to achieve them. When teams are assigned an outcome for the first time, they may need time to learn what might move the metric. Therefore, it’s perfectly acceptable to start with a learning goal and then work towards a S.M.A.R.T. performance goal. Health metrics should also be measured to ensure they are not causing detrimental effects elsewhere.

Some anti-patterns that should be avoided include pursuing too many outcomes simultaneously, ping-ponging from one outcome to another, setting individual outcomes instead of inter-area outcomes, choosing an output as an outcome, or focusing on one outcome to the detriment of all else.

2. Explore the opportunity space

Create a experience map

To effectively identify and navigate the opportunity space to achieve a desired outcome, it is essential to first map out your customers’ current experience. This collaborative exercise will serve as a reference for your customer interviews and bring structure to the opportunity space. To define the scope of your experience map, begin by clarifying your desired outcome. It is recommended to work individually to avoid groupthink, which can hinder progress.

When creating an experience map, your focus should be on your customer’s experience, rather than on your product. As you gather insights about your customers, you can add more details to the map. The objective of this exercise is to gain a comprehensive understanding of what you already know. To co-create the shared experience map, invite diverse perspectives from your team. Do not worry about right or wrong perspectives or advocate for your own drawing. Instead, focus on synthesizing your work as a team, and avoid selecting a single “best” drawing to move forward with.

While creating the experience map, it’s crucial to steer clear of prolonged debates and use visuals instead of words. Furthermore, do not assume that your map is final and neglect to revise and improve it as you gain new insights.

Interview your customers and identify their needs

After gaining a comprehensive understanding of your customer experience journey and aligning your team’s perspective, the next vital step is to continuously interview customers and explore new opportunities surrounding their experience. The aim is to use their own stories to uncover their unmet needs. However, it’s important to remember that our brains tend to create coherent but potentially misleading stories that deceive us. Hence, asking your customers about their behavior may not give an accurate answer. Instead, you need to focus on their actual behavior and reality by asking specific questions about recent instances. Narrow questions can help optimize existing products, while broader ones can uncover new opportunities. During interviews, it’s crucial to remain grounded in specific stories to ensure that you collect data about your participants’ actual behavior, not just their perceived behavior (i.e: instead of asking “what factors do you consider when defining which movie to watch on your streaming service?”, you can ask “tell me about the last time you chose a movie to watch”). You might encounter some participants who are uncooperative or who don’t provide the answers you need.

As you interview customers, it’s important to represent opportunities as needs rather than solutions. This approach opens up more of the solution space and frames needs using your customers’ words. Visual representations of what you learn from each interview can help you discover more opportunities continuously.

To streamline the recruitment process, you can recruit participants while they are using your product or service, use ads to drive traffic to a landing page, or ask customer-facing colleagues to recruit. Leaders from all areas should interview together to ensure that all team members are the voice of the customer. This will provide diversity in the room, allowing for more value from each interview.

Avoid relying on one person to recruit and interview participants, interviewing only when you think you need it, and sharing pages of notes or a recording without context. Instead, use interview snapshots to share what you’ve learned in a concise and meaningful way. The goal is to interview continuously and use customer stories to uncover new opportunities.

Map the opportunities

To effectively manage the complex opportunity space, a simple flat list may not be sufficient. Instead, visual tools such as the opportunity solution tree are recommended. This type of tree depicts parent-child and sibling relationships, with each opportunity being distinct from the others. By breaking down larger opportunities into smaller ones, it becomes easier to address problems and deliver value over time. To add structure to each branch, grouping siblings and identifying parent opportunities can result in a set of mini-trees that give enough structure to see the big picture without being overwhelmed with details.

It’s important to revisit the opportunity solution tree regularly and avoid common anti-patterns such as framing opportunities from the company’s perspective, focusing solely on vertical opportunities, having multiple parent opportunities, being too vague, not being specific, disguising solutions as opportunities, or capturing feelings as opportunities.

Prioritize

It’s important to remember that satisfying all of your customers’ desires is impossible. Therefore, it’s crucial to prioritize the customer opportunities that will have the greatest impact on your outcome. Strategy doesn’t emerge from the solution space but from decisions about the outcomes, customers, and opportunities we choose to pursue. To avoid being overwhelmed, focus on one target opportunity at a time, allowing for exploration of multiple solutions while limiting work in progress.

To assess and prioritize opportunities, start with top-level parent opportunities and iterate until a target opportunity with no children is identified. Assessing a set of opportunities requires considering opportunity sizing, market factors, company factors, and customer factors. Embrace the messiness of decision-making, recognizing that there may not be a clear winner and making the best decision for the moment. It’s important to frame discovery decisions as reversible, two-way doors, staying open to being wrong, and avoiding confirmation bias.

Common anti-patterns to avoid include delaying decisions until there is more data, over-relying on one set of factors at the cost of others, and working backwards from an expected conclusion.

Explore solutions

Brainstorm and narrow down ideas

Studies have demonstrated that our initial ideas are frequently suboptimal. In addition, our natural tendencies towards confirmation bias and the escalation of commitment can lead us to become overconfident in our ideas and reluctant to look for evidence that challenges them. So, as we venture into the solution space, it is imperative to keep in mind that quality often stems from quantity. We need to work with a set of ideas that can be compared and contrasted against each other.

It is advisable to start by scrutinizing one target opportunity and individually brainstorming potential solutions (as group ideation may engender a false sense of productivity, with individual ideation outperforming group brainstorming). Do not shy away from taking inspiration from competitors or exploring unconventional ideas, and take breaks frequently, trying to generate ideas at different times of the day. Once you have a pool of 15–20 ideas, share them with your team and repeat the process. Switching between individual and group ideation can lead to higher-quality ideas. Group evaluation can aid in narrowing down the ideas, and dot-voting can be used to identify three ideas that excite the entire team.

To circumvent common anti-patterns, ensure that diverse perspectives are incorporated and that the context for ideation is established by sharing the target opportunity. Avoid generating numerous variations of the same concept and don’t limit ideation to a single session. Finally, ensure that the chosen ideas address the target opportunity that you identified earlier.

Identify and test assumptions

Product teams often make the mistake of rushing into experimentation without adequate preparation. To ensure effective discovery, it’s crucial to move from testing ideas to testing the underlying assumptions that must hold true for the concepts to be successful. Understanding the assumptions upon which a solution is based is essential to determine whether it will work. The main goal of this approach is to reduce risk rather than seek the truth.

To generate assumptions, we can work backward from our solution to our outcome using an opportunity solution tree. Moreover, story maps can assist us in identifying and clarifying more assumptions by mapping out the steps that each key actor must take for the solution to provide value. Finally, we must evaluate and prioritize which assumptions to test based on their importance and the supporting evidence we have. We should start by testing our “leap of faith” assumptions, which are the most critical and least substantiated assumptions.

Defining evaluation criteria upfront (i.e., expected behavior) and testing with the appropriate audience is essential to avoid common anti-patterns such as overly complex simulations or testing for less than the best-case scenario. Without a clear definition of what we want to learn and what success looks like, we could end up with ambiguous findings. Additionally, remember that testing assumptions from only one idea can lead to confirmation and escalation of commitment biases, resulting in poor decisions. Thus, we should test assumptions from a set of ideas rather than testing one idea at a time.

Small tests using unmoderated user testing and one-question surveys on a handful of customers can provide valuable feedback and allow us to fail sooner. However, if an assumption carries more risk than the organization can bear, continued testing and large-scale experiments may be necessary.

It is crucial to remember that no method is perfect, and false positives and false negatives can occur, particularly in small tests. These come at a cost, but not so great that it is always necessary to begin large experiments. When a false negative occurs, our experiment fails even though our actual population exhibits the behavior; if this occurs, we typically iterate and test new assumptions until we gain new insights. We can afford false negatives at the end because ideas are plentiful, and if we keep our iterations short, the time it takes is also brief. False positives occur when our assumption seems to be accurate, but it is not; in those cases, if the assumption is critical, we typically move on to testing the idea and may catch it later.

Some important "shared" assumptions (of at least 2 ideas):
- Our subscriber wants to watch sports.
- Our subscribers know they can watch sports on our platform.
- Our subscriber can find where to go on our platform to find sports
- We know what sports are available right now.
- We can display what sports are available right now.
- etc.

Assumption test: "Our subscriber wants to watch sports"
1st→ We could mock up the home screen adding several sport options and simulate the moment with users; we would expect at least 3 o of 10 users choosing sporting events in our simulation to consider it true.
2nd → If this assumption is still the most risky, and we are not convinced (only 4 out of 10 users chose sports), we can perform an experiment on the actual home screen (smoke-test screen), adding a sports option, and when clicked, informing the user that we are considering adding it soon and asking for feedback; we would expect at least 100 of 500 participants giving thumbs up.

Measure impact

In addition to instrumenting what you need to evaluate your assumption tests, you also want to measure what you need to evaluate your progress toward your desired outcome. Tracking the long-term connection between your product outcome and business outcome is also critical to continuously improving your product and aligning it with your overall business strategy. However, attempting to measure everything from the start is not advisable. Instead, start with a small experiment and gradually build up to the best measurement plan. Remember you don’t need to test with the full solution to evaluate the impact on our outcomes.

Measurement: After partnering with a local channel, we can broadcast a sporting event on one day and measure the impact on minutes watched for subscribers who watched that sporting event.

Implementing the cycle

The process of managing product cycles involves making informed decisions about which opportunities to pursue and when to pursue them. It is important to remember that not all opportunities need solutions, and sometimes deciding not to build something can be just as fruitful as building something. On the other side, there are some opportunities that are better suited to tackling immediately, rather than in the future. It is essential to avoid common anti-patterns such as overcommitting to an opportunity, avoiding hard opportunities, drawing conclusions from shallow learnings, and giving up before small changes have time to add up.

When presenting solutions to stakeholders, avoid jumping straight to conclusions, slow down and show your work. This involves setting the context for how product decisions are made, assessing and prioritizing the opportunity space, sharing more context about your target opportunity, and sharing the set of three solutions you plan to move forward with. It is also important to continuously manage stakeholders and share your work along the way, rather than presenting a conclusion at the end. Some common anti-patterns to avoid when presenting solutions include telling instead of showing, overwhelming stakeholders with messy details, arguing with stakeholders about why their ideas won’t work, and trying to win the ideological battle instead of focusing on the decision at hand. Instead of asking for permission or waiting for someone to show you how, it is important to start small and iterate from there.

Wrapping up

• Manage by outcomes instead of outputs and focus on a few.
• Identify the opportunities to achieve your desired outcome and express them as customer unmet needs, not as solutions.
• Focus on one target opportunity at a time when brainstorming ideas and narrow the solution space to at least 3 solutions.
• Identify and test the most critical assumptions behind the solutions.
• Experiment and measure the impact of your ideas before investing in them.
• Keep iterating and evolving your Opportunity Solution Tree (OST).

If you want to go deeper into this topic, you can read the book on which this post was based: “Continuous Discovery Habits” by Teresa Torres