Show Me The Money! Defining The Business Value Of Discovery

This is part 3 of our six part series exploring the 7 deadly sins of product discovery. Here we delve into one of the biggest elements that aligns discovery to business strategy and speaks to the commercial value of discovery. If you haven’t yet, check out part 2 for an overview of endless discovery and how discovery planning helps teams avoid this trap.

If discovery is so valuable in ensuring high-performing investments, providing competitive advantage and reducing failure risks, why is it so many businesses don’t want to pay for it? Even if your product team has continuous funding, it is likely you have had to defend the time invested in good quality customer, competitor and industry research at some time.

Perhaps it is something that is culturally not done in your organisation or something that is seen as someone else’s job (frequently sales or marketing). But more often than not, senior leaders have lost confidence in the return on discovery time spent because of historical experiences of poor discovery practice.

Teams with poor discovery practice see discovery as a product process, rather than a commercial activity. By instead framing discovery as a commercial activity that speaks directly to the needs of the business and treating discovery as an investment (rather than a process), product teams can start to re-build business confidence in discovery. It starts with using business language, strategy and goals to define the objectives of discovery.

Framing The Business Value Of Discovery

Frequently discovery either has no stated objectives or the objectives are stated in product language. For instance – “The goal is to understand whether customers prefer experience a over experience b”. This sponsors the immediate question – why?

Why do we need to do this? What happens if we don’t do this? What is the impact? If the answer is “Customers won’t like it” or “We won’t build the ‘right’ thing” – then discovery is missing the point and has become a product process that risks decreasing business confidence.

A high-quality discovery objective should justify the need for the research by speaking directly to business strategy and goals and how discovery is looking to impact them. For instance (illustrative only):

“The business strategy is to increase {business value metric} by x%. The highest impact experience in the product for this is {experience x} which currently attributes a% to {business value metric}.

There is significant opportunity to raise the impact of {experience x} by decreasing the customer drop-off rate, currently at b%. While anecdotal evidence exists as to why customers drop-off including {briefly reference prior information} there is no clear consensus as to which is the majority reason.

Direct customer research is needed to target the necessary improvements to increase customer retention in a cost-effective manner – with a c% impact to drop-off representing a d% impact to {business value metric}. Without correctly targeted improvements, we can expect further drop-off year-on-year, putting a drag on {business value metric} of between d% and e%.”

The above essentially frames the same discovery initiative, but in a way the business cares about by:

• Speaking the language of business strategy, goals, metrics and value, which usually go beyond customer value to impact the business (financially or otherwise).
• Demonstrating the problem discovery seeks to address and why the business should care about it including both upside impact and business risks.

Including a business-led discovery objective makes it clearer for business stakeholders why the research is being undertaken and what is in it for them. By directly tying discovery objectives to business strategy and metrics it also shows that the product team is aligned and deeply understands their role in delivering business strategy and value, making it a good communication tool as well.

Finally, it shows that the product team is a good custodian of commercial investments with sound commercial judgement. If business value is unclear or if potential business impact is minimal, why would we invest time and effort? Given more and more organisations are asking for their product teams to be more commercially minded, this is a practical way teams can start.

How To Write Business Objectives For Discovery

Including a business-led research discovery in your discovery plan may or may not come easy to you. For every business the language and presentation of this objective will differ (remember to speak the language of the business, particularly key business stakeholders), but generally should include the following:

• Business strategy connection: What business objectives / strategies will it help to address / is it aligned to?
• Business context: What is happening / changing in the current environment that makes this research necessary? What research (if any) has been done before and why is it inadequate?
• Decision context: What product & business decisions will be made based on the outcomes?
• Business risks: What is the risk to the business of not doing it?

The business objective for discovery represents the single most important element of the discovery plan and should guide the nature of discovery investments that are made. If there is not a strong connection to business strategy / goals and if the potential for valuable impact from discovery in this space is not there, then it is not a sound commercial investment.

While choosing the right discovery investments is the first step to high-quality discovery practice, conducting high-quality discovery is also essential. In part 4 of this series we will focus on discovery bias, what causes it and how it impacts business confidence in product discovery.