De-Risk Product Development w/ Leading Indicators

Here’s one major reason why your OKRs are enabling waterfall projects and not product orientation.

And its related to the common advice to focus on Outcome OKRs …

We constantly talk about moving from outputs to outcome OKRs. Providing alignment to the real goal and enabling flexibility and discovery.

What we should talk about more often is that to steer towards outcomes in an environment of uncertainty, we need continuous feedback. We need leading indicators.

Easy to say, harder to practice. Especially when you’re working on larger investments (think portfolio-level bets or new products)

Coming up with leading indicators requires us to build a hypothesis around what will enable/drive the desired customer behaviors and outcomes.

That requires deep insight. This raises a question I’ve been pondering recently: When does it make sense to develop leading indicators? Key Results?

On one hand, developing leading indicators requires intimacy with the problem space.

On the other hand, it would be good to know whether we have a way to steer using feedback before going into a major investment.

Where I’m landing for now is:
- consider and prioritize potential investments based on desired outcomes (lagging indicators).
- For investments that require discovery (aka bets) determine leading indicators and a clear approach for steering/discovery based on feedback
- Consider the leading indicators and discovery approach when prioritizing/approving these bets.
- Break the bigger investment into smaller slices that each aim to move the needle on the leading indicator. (this is hard but is where the magic is!)
- Use the leading indicators to steer during discovery/delivery. Be open to pivoting both the investment as well as the leading indicators we use to manage it, based on new information.

What’s your take? Are you insisting on establishing leading indicators? What challenges are you facing using them to guide continuous product discovery/development?