Strategic intents, Beliefs and Bets

Last post was about the importance of managing by outcomes instead of outputs. In that context I used the more general terms: business outcomes, product outcomes and user needs to describe what each level in the organization should focus on. I believe those terms give a good theoretical distinction for the three types of responsibilities of upper management, middle management and teams. However: this nomenclature might not be the best from a practical perspective. Instead, in this post I’ll use “Strategic intents”, “Beliefs” and “Bets” that will add some color to the “output metrics” and are a better way to describe the actual difference between the three. 

Strategic intents are another way to describe desired business outcomes. A strategic intent should indicate a move the company wants to take over a longer period. This can be over a single year but could be as long as three years. The reason it’s possible to have the same strategic intents over several years is because of how general they are. Since a strategic intent is the general direction the company should move in, the need to change it often should be smaller. New competitors, technology or trends should most often not change the general direction the company wants to move in. Strategic intents are either formulated as metrics or as very broad stroke initiatives (e.g. “Become more customer centric”) that has a metric attached to them. This metric is often an aggregated metric meaning it has multiple drivers. It is then up to the middle management to form beliefs on how to move closer to the strategic intention.

In Poker, a player needs to form a belief on what the situation around the table is and thereafter put a bet down. The bet therefore is only as good as the beliefs that made the player place the bet. This is a helpful analogy to how a product organization need to break down the strategic intents into Beliefs and Bets. 

Beliefs are things you hold to be true and should be based on data and generated insights. In this breakdown the Beliefs are what we believe we can do to move closer to the strategic intent. E.g. How an improved product outcome such as conversion can move us closer to a strategic intent such as growth. The Belief are therefore not a solution but more of an unpacking and concretization of the strategic intent. Since Beliefs are not solutions they should always have a success metric so that Bets later can be evaluated against the success criteria. Generally the people defining Beliefs should not be the same as the ones defining the strategic intent or bets. This means that it’s usually “middle management” that are responsible for the Belief formation. 

Bets are finally where we start working with solutions to problems. The reason they are called Bets is that all solutions we apply to a problem have some degree of uncertainty. Calling it “implementation” indicates that we have high certainty whereas “Bets” give a more accurate expectation of the uncertainty. As in Poker it is often ill advised to make a few huge bets, instead bets should be smaller (many companies have an upper limit of 6 weeks time for a bet).

Inspiration: The Build Trap by Melissa Perri and Spotify video: “Software engineering culture” and Thinking in Bets by Annie Duke