Business (product) owners focus on the wrong things

Before we dive into the matters I want to give a few definitions:

Inputs: time, money, resources spent by the organization or individual

Activities: manufacturing, producing, serving – everything that the business is doing with the inputs

Outputs: products and services produced – the results of our activities

Outcomes: An outcome is the change of behavior or level of well-being experienced by a group of people, or the condition of the environment, as a result of an activity or the output. Immediate or short-term.

Impacts: Impact is a change in an outcome caused by an organization or individual. An impact can be positive or negative, intended or unintended. Long-term.

I talk daily to the Business Owners and Product Owners and discuss KPIs and results that the owners are looking for or optimizing their organizations for. I see time and again that their focus is on inputs, activities, and outputs. This is a short-term and narrow view that you can not afford to use as a Business (Product) Owner. 

Expanding your thinking to include outcomes and impacts is one of the biggest improvements you can make. 

Just look at the metrics of this manufacturing facility and see how much richer the picture is if we include outcomes and impacts:

We have used:

• 5 tons of fresh fish (input)
• 200 pounds of salt (input)
• 3000 gallons of water (input)
• 100 hours of manual labor (input)
• 900 kW electricity (input)

We did: 

• filet the fish (activity)
• dry the fish (activity)
• pack (activity) and ship (activity) it

We produced: 

• 1 ton of salted and dried fish (output)
• 1 ton of fishmeal (output)
• 1 ton of fish waste (output) which we thrown away ((negative outcome)
• 1 ton of CO2 emissions (output)
  which was released into the atmosphere (negative outcome) contributing to global warming (negative impact)
• 30 therms of heat (output)
  which was released into the atmosphere (negative outcome) contributing to global warming (negative impact)

We sold this fish to 100 customers. (output)

They created 5000 meals from it. (output)

Which were consumed by 5000 people who are not hungry anymore. (positive outcome)

Eating fish 2-3 times a week is beneficial for heart, eye, and brain health. (positive impact)

Measuring impact allows you as the Owner to answer the question “Why?”. What is the purpose of your business or product? How is your business or product’s existence impacts the lives of people and the environment we live in? What is the total balance of negative and positive impacts look like? 

To do: 

• make the balance positive and work to increase it
• invest in other activities creating a positive impact