Continuous Discovery Habits_ Discover Products That Create Customer Value and Business Value - Teresa Torres  ## Metadata - Author: **Teresa Torres** - Full Title: Continuous Discovery Habits_ Discover Products That Create Customer Value and Business Value - Category: #books - Tags: #business #startup ## Highlights - We shifted away from having lists of metrics to increase and outputs to deliver. Now we have fewer goals, more clarity, and a focus on solving the customer’s problem in ways that drive business value. (Location 26) - We shifted away from falling in love with a single idea and building it. Now we come up with many ideas. And we learn faster by testing sets of ideas and running smaller simulations. (Location 27) - We shifted away from discovery and delivery being separate responsibilities. Now there’s more collaboration, with most of the team involved in customer interviews, mapping the customer journey, ideating on solutions, and discussing results. The whole team contributes at key points along the way, and we learn and adjust our course together. (Location 28) - Many work in organizations where the leaders have not had a chance to see how good product teams work up close. And as such, they’re unable to effectively coach and develop their people. (Location 45) - I was tired of having to convince my colleagues that a relentless focus on customers was a better strategy than obsessing about our competitors. Sadly, this is the work of a product executive. (Location 72) - Companies fell into the trap of chasing the next sale or obsessing about their competitors because many companies (especially startups) didn’t have a better model for product management. They didn’t know what good looked like. (Location 77) - My goal with this book is to share those habits with you in the hopes that you, too, will be inspired to spend more time with your customers. The world needs better products. It’s up to us to make that happen. This book will teach you how. (Location 85) - I’ll refer to the work that you do to decide what to build as discovery and the work that you do to build and ship a product as delivery. (Location 94) - Many companies put a heavy emphasis on delivery—they focus on whether you shipped what you said you would on time and on budget—while underinvesting in discovery, forgetting to assess if you built the right stuff. This book aims to correct for that imbalance. (Location 96) - Teams learned after the product shipped that customers weren’t excited about what they built. This way of working led to a lot of waste. Sadly, I still meet many teams and companies that work this way. Marty Cagan refers to these types of teams as delivery teams. (Location 110) - The authors of the Agile manifesto advocated for shorter cycles with more frequent customer feedback. Second, they proposed working at a pace that could be sustained continuously, rather than furiously scurrying from one milestone to another. Third, they advocated for maximum flexibility—having the ability to adapt to customer feedback quickly and easily. And fourth, they advocated for simplicity. They were concerned with how much of what they built was never used or offered limited value and instead advocated for teams to ruthlessly limit what they built. (Location 115) - As you read this book, if you choose to be more inclusive of who engages with these habits, just know that inclusion comes at a cost. The more folks involved in each decision, the longer it will take to reach that decision. You want to balance speed of decision-making with inclusiveness. For most teams, their trio needs to consist of at least a product manager, designer, and software engineer. (Location 160) - Outcome-oriented: The first mindset is both a mindset and a habit. The mindset requires that you start thinking in outcomes rather than outputs. That means rather than defining your success by the code that you ship (your output), you define success as the value that code creates for your customers and for your business (the outcomes). (Location 170) - Customer-centric: The second mindset places the customer at the center of our world. It requires that we not lose sight of the fact (even though many companies have) that the purpose of business is to create and serve a customer. We elevate customer needs to be on par with business needs and focus on creating customer value as well as business value. (Location 174) - Visual: The fourth mindset encourages us to step beyond the comfort of spoken and written language and to tap into our immense power as spatial thinkers. The habits in this book will encourage you to draw, to externalize your thinking, and to map what you know. Cognitive psychologists have shown in study after study that human beings have an immense capacity for spatial reasoning.3 The habits in this book will help you tap into that capacity. (Location 179) - Experimental: The fifth mindset encourages you to don your scientificthinking hat. Many of us may not have scientific training, but, to do discovery well, we need to learn to think like scientists identifying assumptions and gathering evidence. (Location 183) - “Managers must convert society’s needs into opportunities for profitable business.” — Peter Drucker (Location 199) - “If I had an hour to solve a problem, I’d spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.” — Albert Einstein (Location 200) - While Wells Fargo’s fraud is exceptional, the focus on outcomes at the cost of the customer is not uncommon. At many companies, there is a tension between business needs and customer needs. When you get bombarded with a handful of ads before you can start reading a newspaper article, it’s because the newspaper prioritized their need for ad revenue over the reader’s need for a pleasant reading experience. (Location 214) - As our product-discovery methods evolve, we are shifting from an output mindset to an outcome mindset. Rather than obsessing about features (outputs), we are shifting our focus to the impact those features have on both our customers and our business (outcomes). Starting with outcomes, rather than outputs, is what lays the foundation for product success. (Location 226) - At a minimum, weekly touchpoints with customers By the team building the product Where they conduct small research activities In pursuit of a desired outcome (Location 240) - To reach their desired outcome, a product trio must discover and explore the opportunity space. The opportunity space, however, is infinite. This is precisely what makes reaching our desired outcome an ill-structured problem. How the team defines and structures the opportunity space is exactly how they give structure to the ill-structured problem of reaching their desired outcome (Location 261) - It starts with defining a clear outcome—one that sets the scope for discovery. From there, we must discover and map out the opportunity space—this is what gives structure to the ill-structured problem of reaching our desired outcome. It’s the all-important problem framing that opens up the solution space. And finally, we need to discover the solutions that will address those opportunities and thus drive our desired outcome. (Location 275) - solution space. This is where we’ll visually depict the solutions we are exploring. (Location 282) - Assumption tests. This is how we’ll evaluate which solutions will help us best create customer value in a way that drives business value. (Location 283) - The team should explore the customer needs, pain points, and desires that, if addressed, would drive that outcome. The key here is that the team is filtering the opportunity space by considering only the opportunities that have the potential to drive the business need. By mapping the opportunity space, the team is adopting a customer-centric framing for how they might reach their outcome. (Location 289) - A continuous mindset requires that we deliver value every sprint. We create customer value by addressing unmet needs, resolving pain points, and satisfying desires. (Location 304) - Chip and Dan Heath, in their book Decisive, outline four villains of decisionmaking that lead to poor decisions. The first villain is looking too narrowly at a problem. This is exactly why we want to explore multiple ways of framing the opportunity space. The second villain is looking for evidence that confirms our beliefs. This is commonly known as confirmation bias. We’ll be discussing this bias often throughout the book. We’ll be exploring several habits that will help us overcome this bias and ensure that we are considering both confirming and disconfirming evidence. The third villain is letting our short-term emotions affect our decisions. In the product world, this often shows up when we fall in love with our ideas. The fourth villain is overconfidence. This, too, is common in the product world. We are often sure our ideas will be runaway successes. (Location 310) - The depth and breadth of the opportunity space reflects the team’s current understanding of their target customer. If our opportunity space is too shallow, it can guide us to do more customer interviews. (Location 355) - When it comes to sharing work with stakeholders, product trios tend to make two common mistakes. First, they share too much information—entire interview recordings or pages and pages of notes without any synthesis—expecting stakeholders to do the discovery work with them. Or second, they share too little of what they are learning, only highlighting their conclusions, often cherry-picking the research that best supports those conclusions. (Location 369) - Business outcomes into product outcomes you can deliver, negotiate appropriate product outcomes with your leadership team, and determine when to set learning goals versus performance goals. (Location 409) - A fixed roadmap communicates false certainty. It says we know these are the right features to build, even though we know from experience their impact will likely fall short. An outcome communicates uncertainty. It says, We know we need this problem solved, but we don’t know the best way to solve it. It gives the product trio the latitude they need to explore and pivot when needed. If the product trio finds flaws with their initial solution, they can quickly shift to a new idea, often trying several before they ultimately find what will drive the desired outcome. (Location 421) - Outcome. Finally, managing by outcomes communicates to the team how they should be measuring success. (Location 425) - Teams also need continuous feedback on their progress toward their goal, supporting the argument that goals should be measurable. (Location 501) - More recent research on goal setting involving more complex tasks, like the ones product trios face, found that challenging goals can decrease performance if the team doesn’t have strategies for how to achieve their goal. (Location 503) - Additionally, these studies found that setting an initial learning goal (e.g., discover the strategies that might work) was more effective than setting a performance goal. Only once appropriate strategies were identified did performance increase with a specific, challenging performance goal. (Location 505) - Try to connect the dots between the business outcome and potential product outcomes. Can you clearly define how this new initiative will impact a product outcome? Is that outcome a leading indicator of the lagging indicator, business outcome? (Location 522) - Most teams will have more of an impact by focusing on one outcome at a time. (Location 543) - However, you’ve already learned that it takes time to learn how to impact a new outcome. When we ping-pong from outcome to outcome, we never reap the benefits of this learning curve. Instead, set an outcome for your team, and focus on it for a few quarters. (Location 545) - In addition to your primary outcome, a team needs to monitor health metrics to ensure they aren’t causing detrimental effects elsewhere. For example, customer-acquisition goals are often paired with customer-satisfaction metrics to ensure that we aren’t acquiring unhappy customers. To be clear, this doesn’t mean one team is focused on both acquisition and satisfaction at the same time. It means their goal is to increase acquisition without negatively impacting satisfaction. (Location 564) - Some people say, “Give the customers what they want.” But that’s not my approach. Our job is to figure out what they’re going to want before they do. I think Henry Ford once said, “If I’d asked customers what they wanted, they would have told me, ‘A faster horse!’” People don’t know what they want until you show it to them. That’s why I never rely on market research. Our task is to read things that are not yet on the page. — Steve Jobs, CEO of Apple, in Walter Isaacson’s Steve Jobs. (Location 691) - “Confidence is a feeling, which reflects the coherence of the information and the cognitive ease of processing it. It is wise to take admissions of uncertainty seriously, but declarations of high confidence mainly tell you that an individual has constructed a coherent story in his mind, not necessarily that the story is true.” (Location 694) - That’s our job. That’s what Jobs meant when he said, “Our task is to read things that are not yet on the page.” We are the inventors, not our customers. However, this doesn’t mean we shouldn’t be talking to our customers. In this chapter, you will learn why interviewing on a regular cadence is critical to the success of any product trio and how to build a habit of interviewing weekly. The purpose of customer interviewing is not to ask your customers what you should build. Instead, the purpose of an interview is to discover and explore opportunities. Remember, opportunities are customer needs, pain points, and desires. They are opportunities to intervene in your customers’ lives in a positive way. (Location 699) - Direct questions require that we recall facts without context. This process is prone to cognitive biases—common patterns in mental errors that result from the way our brains process information. We are bad at quantifying how often we do something. We often speculate about what we did, when, and why. We tend to favor generalities over specifics. We give answers that are influenced more by our sense of identity rather than our actual behavior. And we tend to come up with coherent reasons to explain our behavior that are often not grounded in reality. (Location 740) - This is exactly why in Thinking, Fast and Slow, behavioral economist Daniel Kahneman claimed, “A remarkable aspect of your mental life is that you are rarely stumped.” Your brain will gladly give you an answer. That answer, however, may not be grounded in reality. In fact, Kahneman outlines dozens of ways our brains get it wrong. It’s also why Kahneman argues confidence isn’t a good indicator of truth or reality. He writes, “Confidence is a feeling, which reflects the coherence of the information and the cognitive ease of processing it.” Not necessarily the truth. (Location 764) - You can’t simply ask your customers about their behavior and expect to get an accurate answer. Most will obligingly give you what sounds like a reasonable answer. But you won’t know if they are telling you about their ideal behavior or their actual behavior. Nor will you know if they are simply telling you a coherent story that sounds true but isn’t true in practice. (Location 770) - If you want to build a successful product, you need to understand your customers’ actual behavior—their reality—not the story they tell themselves. (Location 784) - The key to interviewing well is to distinguish what you are trying to learn (your research questions) from what you ask in the interview (your interview questions). (Location 789) - Once we’ve explored the opportunities that matter most to the customer, we can dive into the specifics of any of those opportunities. You may have specific opportunities in mind, but you’ll want to let your participant set the direction of the interview. Remember, what matters most to your customer trumps what you need to learn. (Location 797) - To represent opportunities as needs and not solutions. If the participant requests a specific feature or solution, ask about why they need that, and capture the opportunity (rather than the solution). A good way to do this is to ask, “If you had that feature, what would that do for you?” (Location 878) - The experience map that you created in Chapter 4 will help guide each interview. As you collect each customer’s unique story, you’ll want to actively listen for how their story is similar to or different from your generalized experience map. One of the most important elements to capture on the interview snapshot is an experience map that captures each participant’s unique story. (Location 891) - Weekly interviewing is foundational to a strong discovery practice. Interviewing helps us explore an ever-evolving opportunity space. Customer needs change. New products disrupt markets. (Location 901) - The hardest part about continuous interviews is finding people to talk to. In order to make continuous interviewing sustainable, we need to automate the recruiting process. Your goal is to wake up Monday morning with a weekly interview scheduled without you having to do anything. (Location 916) - The more diverse your interviewing team, the more value you will get from each interview. What we hear in an interview will be influenced by our prior knowledge and experience. A product manager will hear things that an engineer might not pick up on, and vice versa. (Location 960) - Interviewing only when you think you need it. It’s easy to think discovery is a linear process. If we interview to identify customer opportunities, why can’t we stop interviewing once we’ve chosen a target opportunity? Remember, it’s much easier to continue a weekly habit than to start and stop a periodic behavior. Continuous interviewing ensures that you stay close to your customers. More importantly, continuous interviewing will help to ensure that you can get fast answers to your daily questions. (Location 982) - Most product teams are devoted to serving their customers, and, when they hear about a need or a pain point, they want to solve it. But our job is not to address every customer opportunity. Our job is to address customer opportunities that drive our desired outcome. This is how we create value for our business while creating value for our customers. (Location 1029) - Instead of managing an opportunity backlog, we’ll use an opportunity solution tree to help us map out and understand the opportunity space. The tree structure will help us visualize and understand the complexity of the opportunity space. (Location 1064) - Is this opportunity framed as a customer need, pain point, or desire and not a solution? Is this opportunity unique to this customer, or have we seen it in more than one interview? If we address this opportunity, will it drive our desired outcome? (Location 1123) - “The build trap is when organizations become stuck measuring their success by outputs rather than outcomes. It’s when they focus more on shipping and developing features rather than on the actual value those things produce.” (Location 1188) - This obsession with producing outputs is strangling us. It’s why we spend countless hours prioritizing features, grooming backlogs, and micro-managing releases. The hard reality is that product strategy doesn’t happen in the solution space. Our customers don’t care about the majority of our feature releases. A solution-first mindset is good at producing output, but it rarely produces outcomes. (Location 1200) - You don’t want to ask, “Should we pursue this opportunity?” That’s a “whether or not” question that leads to poor decisions. It makes us susceptible to confirmation bias, and we forget to consider opportunity cost. Instead, you’ll compare and contrast the set of parent opportunities against each other. (Location 1223) - Opportunity sizing helps us answer the questions: How many customers are affected and how often? (Location 1237) - We want to prioritize important opportunities where satisfaction with the current solution is low, over opportunities that are less important or where satisfaction with current opportunities is high. (Location 1265) - Jeff Bezos, founder and CEO of Amazon, made this exact argument in his 2015 letter to shareholders, where he introduced the idea of Level 1 and Level 2 decisions. He describes a Level 1 decision as one that is hard to reverse, whereas a Level 2 decision is one that is easy to reverse. Bezos argues that we should be slow and cautious when making Level 1 decisions, but that we should move fast and not wait for perfect data when making Level 2 decisions. (Location 1285) - The four sets of factors (opportunity sizing, market factors, company factors, and customer factors) are designed to be lenses to give you a different perspective on the decision. (Location 1317) - You’ll never stumble upon the unexpected if you stick only to the familiar. (Location 1328) - Tags: #rationality - Ed Catmull’s book Creativity, Inc. about Pixar’s creative process or Tom Kelley’s The Art of Innovation. (Location 1356) - People tend to work harder when working individually than when working in groups. This is called social loafing. When we are on our own, we have no choice but to put in the work, whereas when we are in a group, we can rely on the efforts of others. (Location 1367) - Common group trait known as downward norm setting—the performance of the group tends to be limited to the lowest-performing member. (Location 1374) - Brainstorming groups are subject to what they call “the illusion of group productivity.” This is a phenomenon in which groups overestimate their performance. They also report high levels of satisfaction with their work despite their lesser performance. (Location 1378) - The escalation of commitment is a bias in which the more we invest in an idea, the more committed we become to that idea. (Location 1497) - Tags: #cognitive-bias - The fruit of discovery work is often the time we save when we decide not to build something. (Location 2110) - One of the hardest challenges with opportunity selection is identifying the right opportunity for right now. (Location 2216)