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Somewhere in a quarterly business review this month, a technology leader is presenting a genuinely impressive number. Pull requests up. Features shipped, way up. The AI tooling landed last year and the output curve bent hard. Then someone from finance asks what all of it did to revenue, retention, or margin, and the room goes quiet in a very particular way. The honest answer is that nobody ever built the instrument that would know.On 14 July, Mik Kersten published Output to Outcome, the sequel to Project to Product. It is a 336 page answer to that silence, and the argument underneath it is sharper than the title suggests.The Constraint Moved While Everyone Watched the Wrong NumberProject to Product made one case in 2018: software delivery is a value stream, and you cannot manage what you cannot see. Flow items and flow metrics existed to make the movement of work visible to people who had only ever seen status reports.The new book says that visibility now points somewhere else. In Kersten's words from the launch announcement, "As AI makes knowledge work dramatically more productive, the bottleneck shifts to the operating model itself." When producing knowledge work stops being the hard part, the hard part becomes everything around it.There is a number that makes this concrete. Across thousands of value streams Kersten's team studied in 2023 and 2024, only 8 percent of end to end delivery time was spent by the development teams themselves. The other 92 percent disappeared into upstream and downstream constraints: approvals, handoffs, waiting for a decision, waiting for someone to look at the thing.Sit with what that means for the AI productivity story. Nearly every gain being claimed this year lands inside that 8 percent slice. Doubling the speed of 8 percent of a system moves the whole system by about 4 percent, and no amount of enthusiasm changes the arithmetic. I made a version of this argument a few weeks ago about the bottleneck that never got an AI seat. Kersten has now put 3,600 value streams behind it.Ninety Percent Never Had an Outcome to ManageThe finding that should worry executives more sits one layer up. In Kersten's data, "ninety percent of value streams measured outputs only, with no systematized measure of outcomes."Nine out of ten, not measuring outcomes badly but not measuring them at all in any systematic way, while reporting output numbers upward with great confidence every quarter.Kersten's remedy is Outcome Management, which he defines as "a systems-level leadership practice that aligns strategy, design, delivery, decision-making, and measurement to business and customer outcomes." It runs on two structures. The Outcome Loop connects strategy and objectives through roadmaps and flow to something measurable, for a single value stream. The Outcome Tree scales that loop across the organization, humans reporting to humans at each node, cascading outcomes rather than tasks.Serious organizational design, and the seven shifts built on top of it (Functions to Flow, Slop to Substance, Chaos to Cadence, Managers to Makers, among them) name real transitions rather than slogans. Which is exactly why the next question matters so much.A Cascade Distributes Whatever Sits at Its RootA tree is a distribution mechanism. Build a good one and it carries whatever sits at the top down through every branch with high fidelity, which is wonderful when the top holds a genuine strategic choice and expensive when it does not.Richard Rumelt has spent decades on what usually sits up there. In his conversation on Lenny's Podcast he is blunt about it: the most common cause of bad strategy is a weak diagnosis, and the second most common is confusing goals with strategy. Goals, ambitions, visions, missions and values, he says, none of these things are a strategy.Now look at what occupies the root node of most outcome hierarchies. Grow revenue 15 percent. Improve NPS by ten points. Become the leading platform in our category. Each is a goal wearing the clothing of an outcome, with no diagnosis of what stands in the way and no choice about how this company in particular intends to win.Cascade that root through a well built Outcome Tree, with agent amplified output humming underneath it, and you get something genuinely new in corporate life: an ambition nobody diagnosed, distributed faster, with cleaner accountability, to more people than ever before. The tree works perfectly. That is the problem.Kersten Built Box FiveRoger Martin's strategy choice cascade has five boxes: winning aspiration, where to play, how to win, must have capabilities, and enabling management systems. Read the Outcome Tree against that list and its position is obvious. It is box five, an enabling management system, and one of the better ones anybody has designed for the AI era.Martin's warning about partial adoption is unusually pointed. "I think of one-box strategy as delusional and three-box strategy as lazy," he writes, "and if you want a strategy that will guide you to real advantage in the marketplace, you need all five boxes." Elsewhere he is equally direct: a list of initiatives is not a strategy, a plan is not a strategy, hope is not a strategy.The predictable failure of the next two years is now easy to describe. Organizations will buy box five and skip boxes two and three, because box five can be procured, staffed, tooled and put on a roadmap, while where to play and how to win have to be chosen. Choosing means giving something up, and that is the part no operating model can do on your behalf.I wrote recently about transformations that adopt agile vocabulary and dodge the structural change underneath it. This is the same move, one altitude higher. Outcome Management is going to be adopted the way agile was adopted, as terminology and tooling laid over a strategy that was never made.Test the Root Before You Grow the TreeThree things are worth doing before anyone draws the first node.Start with the diagnosis, not the target. Rumelt uses a climbing metaphor for this: the crux is the hardest part of the route, and if you cannot get past it you should not be on that climb at all. Name the crux in one paragraph, without jargon, before naming any outcome. If the paragraph will not come, the tree has nothing real to cascade.Then interrogate the root node. Put the proposed top level outcome through one test: against whom, where, and by what means do we win? A goal collapses under that question. A strategic choice answers it and rules other options out.Finally, hold the loop honest. Kersten is careful to say that the relationship between outputs and outcomes is a correlation, not cause and effect, which makes every roadmap item a hypothesis rather than a commitment. His warning about acting on output gains is worth reading twice: cutting developers because output productivity rose, rather than because outcomes rose, is how an organization talks itself into shrinking the capacity that was producing its results.The question he keeps returning to is the one I would put on the wall. You can now produce twice as much. Can you get customer feedback twice as fast?AI did not hand anyone a strategy. It removed the last place to hide one.Ralph Jocham is Europe's first Professional Scrum Trainer, co-author of "Professional Product Owner," and contributor to the Scrum Guide Expansion Pack. As an ICF ACC certified coach, he works with organizations to build Product Operating Models where strategic clarity, operational excellence, and adaptive learning create measurable competitive advantage. Learn more at effective agile.References[1] Kersten, M. (2026) 'Output to Outcome: An Operating Model for the Age of AI', IT Revolution, 14 July. Available at: https://itrevolution.com/product/output-to-outcome/[2] Planview (2026) 'Planview Announces Dr. Mik Kersten's New Book, Output to Outcome, Exploring Organizational Infrastructure in the AI Age', 14 July. Available at: https://newsroom.planview.com/planview-announces-dr-mik-kerstens-new-book-output-to-outcome-exploring-organizational-infrastructure-in-the-ai-age/[3] IT Revolution (2026) 'Sneak Peek at Mik Kersten's New Book: Output to Outcome'. Available at: https://itrevolution.com/articles/sneak-peek-at-mik-kerstens-new-book-output-to-outcome/[4] IT Revolution (2026) 'From Output to Outcome: A Conversation with Mik Kersten'. Available at: https://itrevolution.com/articles/from-output-to-outcome-a-conversation-with-mik-kersten/[5] Tech Lead Journal (2026) 'The AI Productivity Paradox: Why 10X Output Doesn't Mean 10X Business Outcome, with Mik Kersten', Episode 262. Available at: https://techleadjournal.dev/episodes/262/[6] Rumelt, R. 'Good Strategy, Bad Strategy', Lenny's Newsletter and Podcast. Available at: https://www.lennysnewsletter.com/p/good-strategy-bad-strategy-richard[7] Martin, R. 'Decoding the Strategy Choice Cascade', Medium. Available at: https://rogermartin.medium.com/decoding-the-strategy-choice-cascade-475d40555eb1[8] Martin, R. 'Revisiting My Definition of Strategy', Medium. Available at: https://rogermartin.medium.com/revisiting-my-definition-of-strategy-76a838aba818[9] Jocham, R. 'Larman's Laws of Organizational Behavior', effective agile. Available at: https://effectiveagile.com/larmans-laws-of-organizational-behavior/
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