We have now assigned one or more specific problems to solve to each product team, but we’re not quite done providing the necessary context. 

When leaders ask a team to work on solving a problem, it’s important to be clear with the team on the level of ambition they should strive for in their discovery work.  

Should the team focus on low-risk but low-reward “sure things,” or should they strive for more substantial and dramatic improvements?

One useful way to think about team objectives is that the leaders are placing a series of bets.  Some are low-risk, some are high-risk, and some are in between.  

They’re making bets primarily on the people, but also on new enabling technologies, changing market conditions, and the strength of the insights behind the product strategy.

As you’ll see, if something is important enough, the leaders might choose to have several teams each attack a problem in their own way; some going for low-risk, quick-wins, and others maybe going for much more ambitious but higher-risk approaches.

It’s important not to confuse the level of ambition, with the level of effort or sense of urgency.  

Work ethic and sense of urgency are more a function of the culture, and very likely also your company’s cash situation, and not what we are addressing here.

Teams that are pursuing low-risk/low-reward solutions will test much different product ideas than ones pursuing high-risk/high-reward solutions.  The nature of the product discovery work will be different, and the techniques they use will likely be different.

It’s also important not to confuse the level of ambition with a high-integrity commitment (which we’ll discuss next).  In this case they are related, but a commitment is a special and critically important concept in its own right (which we’ll discuss next).

This is really all about risk management.  If you have a very difficult and critically important problem – such as a churn rate that is far too high to sustain a business – then experienced leaders will want to attack that problem from different angles and different levels of risk.  They may have a couple teams pursuing “low-lying fruit” but they’re worried that won’t be enough, so they also have a couple teams pursuing much more ambitious approaches to the problem.

Some people like to refer to level of ambition as either a “roof shot” or a “moon shot.”

A “roof shot” refers to a team being asked to be conservative, and pursue lower-risk, but also highly likely, tangible results.  Optimization work fits well into this type of work.

On the other hand, a “moon shot” is a term for when the team is asked to be very ambitious, such as going for a 10X improvement.  It is expected that this is high-risk, but we also believe that it’s not impossible, and the team is well-positioned to make a serious attempt.  Yes, it’s high-risk, but it’s also potentially high-reward.

The point of a moon shot is to encourage the team to think beyond the small and safe optimizations, and revisit how the problem is solved today in the hopes of breaking through.

And still other companies prefer to attach a degree of confidence to the objective, such as 80% likely to achieve for a roof shot, versus 20% likely to achieve for a moon shot.

These techniques are useful for communicating the desired level of ambition to the teams.  But realize that in terms of managing a portfolio of risk, there can and should be any level of ambition in between.

Imagine a professional poker player in Las Vegas being told she could only place bets of $1 or $10,000.  That would seriously hinder her ability to work, because she would rather be able to place a range of bets in various amounts based on the circumstances.

The point is that the leaders are essentially managing a portfolio of risk and potential reward.  They may have certain teams being more ambitious than others, even for the same objective.

Whatever the level of ambition associated with your key results, be sure to clearly communicate this across the organization – you especially don’t want anyone to assume that something is a very high confidence result when it’s not.

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