How to use the Stepwise Refinement technique for strategic thinking and planning

 

Here’s a little thing that sat in my drafts for a while: it’s a simple planning framework that we used to work with, back at ClickSoftware (now Salesforce). 

It focuses on breaking down a big challenge (or a goal) into smaller challenges (or outcomes) before diving into the actual tasks, and it's a pretty good technique when dealing with product roadmaps or strategic plans that spread across multiple teams.

The credit goes to Professor Moshe BenBassat, the founder and CEO of the company, and a great innovator. He took the well known “Stepwise Refinement” problem-solving method (not to be confused with scrum's product backlog refinement) and turned it into a useful planning tool, which I still use whenever I need to organize my thoughts and turn a big problem into a concrete plan. 

What the heck is Stepwise Refinement? 

The original stepwise refinement framework works as follows: 

1. Start with the initial problem statement
2. Break it into a few general steps
3. Take each "step", and break it further into more detailed steps
4. Repeat step 3 until the steps are simple enough to execute

When used for planning, the steps look as follows: 

1. Start with the top goal 
2. Break it into a few required outcomes
3. Take each "outcome" and break it further into more detailed outcomes (or milestones)
   
4. Repeat step 3 until those items are concrete and can be handled as tasks 

This technique helps to break down complicated problems into simpler ones while maintaining alignment between the planned activities and the top goal. 

So instead of following the natural instinct of throwing out ideas, fall in love with the suggested actions, and then think about their "expected outcomes" and how they'll contribute to the top goal (something that often feels awkward) - this top-down approach forces you to define the "required outcomes" before diving into the actions (as can be seen in the illustration below). 

[Goal - Tasks - Outcomes] vs. [Goal - Outcomes - Tasks]

Let's dive into the different steps: 

Step 1: Start with the goal

That one is trivial, that’s the: “where do we want to be” statement. 

Example: by July 2021, increase the customer retention rate of our marketplace by 20%.

Step 2: Break it into required outcomes

That's my favorite step, and the reason I like this thinking framework so much. 

In this step, you need to think about "what should happen for us to get there?”.

Don’t dive into the tasks just yet, and instead, break down your goal into smaller, measurable results, that if achieved - will help you achieve your top goal. 

Neutralize your personal preferences (or interests), don't worry about who does what or when, and don't let execution challenges shift you away from thinking about what’s really required for the goal to be achieved. 

Allow yourself to fantasize a little: “how does success look like? How will the numbers look like when the goal is achieved?”.

Let's continue with our example: what should happen for us to improve our retention rate by 20%?  

• Required outcome 1: we'll have a loyalty program that encourages customers to perform their 5th transaction (for the sake of the example, let's assume the big drop is there...) 
• Required outcome 2: our service quality is improved by X% (assuming that's one of the reasons for churn)
• Required outcome 3: we'll have a set of drip campaigns across different media (push notifications, emails, in-app messages) nudging the users to return to the platform. 

And so on... 

Step 3 [optional]: Break each outcome into more concrete outcomes (or milestones)

Break down each outcome into smaller, more specific ones; achievements required to achieve each outcome.

If you’re working on a strategic plan, your top-level outcomes might be a bit too high-level, so keep refining them into more concrete results. 

If you’re working on a simple team-level plan, those items can be specific milestones with due dates.

In my example above, each outcome requires some more refinement:

• What does it take to develop a loyalty program? Product? Pricing?
• What's needed in order to improve service quality? Operational changes? Customer success?
• How do you implement a drip campaign? Product features? A new marketing tool? 

Each of the above topics can be easily refined into more specific ones. 

Step 4: Repeat step 3 as needed, until you have a list of clear actions to perform

Keep iterating until each outcome is concrete and achievable and can be easily turned into tasks.

The more you break down your required outcomes - the easier it will be to define the action items needed to achieve those outcomes. 

This top-down process ensures that each task contributes directly to the top goal, and helps focus on the right things to do. Once you have your tasks in place, it will be easier to plan the project and estimate the milestones (remember to multiply everything by 3).

At the end of the process, you need to have a clear set of outcomes and a clear set of tasks:

And if it looks similar to OKRs - that's correct; there's a lot of similarities, but Stepwise Refinement thinking encourages a recursive process of breaking the outcomes into smaller ones - and it doesn't limit the plan for one level of objectives. 

[Check out this mini-guide to help you quickly get up to speed with product-led growth]

Advantages:

1. The Stepwise Refinement approach encourages you to break down complicated challenges into smaller ones which are easier to understand, plan, execute, and monitor.
2. The extra step(s) of turning the top goal into the "required outcomes" encourages unbiased thinking and usually drives better results than jumping straight to the action items and figure out the "expected outcomes" later. 
3. Once the outcomes are clear, the tasks can change dynamically as the project progresses. This encourages agility without losing sight of the lighthouse. 

Before your drop-off - don't forget to subscribe to my occasional newsletter and become 23% more awesome than average. Do it.