Output versus Outcomes

Company leaders want measurable results, naturally. So they establish goals for the organization, whether a revenue growth objective or a target net promoter score.

Employees work hard to create outputs, whether it be new products, services, or offerings, in hopes of achieving those goals. However, teams often fall short of those goals because instead of measuring outcomes, We measure the number of outputs accomplished, and in turn, overlook their connection to bigger organizational goals.

Here’s what I mean — results move up or down because of a behavior change. For instance, revenue goes up when customers buy more products. But this is a lagging indicator — what caused the customer to change their buying behavior? The revenue is simply a result of that change. This is what makes identifying which influence (i.e. output) actually changed customer behavior difficult if not impossible.

In this example, behavior could change because of an increased need for a specific product that you offer (think pandemic, etc.). Or, it could change because your ordering system became easier to use than a competitor’s. Or it might change because you added a unique, high-demand feature. Each one of these changes affected customer behavior which ultimately impacted revenue. So when the CEO sets a revenue increase goal of 10%, on which one of these (or the other infinite number of options you have) do you choose to focus your limited time and resources?

This is where outcomes come in. Outcomes are the measures of customer behaviors. They are actions and activities like “the number of items put in the cart per visit per customer” or “the frequency with which a customer launches your app.”

While an output focus is about maximizing the “stuff” (i.e., features, etc.) produced, an outcome focus is about understanding your customer needs, solving their problems, and creating new possibilities for them. You know you’re succeeding when your customers have changed or adopted new behaviors.

Metrics used in companies to measure success are typically measures of outputs. When we try to control processes or shape customer behaviors using only outputs, we don’t see the process and have no visibility as to why those behaviors changed. Instead, start thinking in terms of outcomes, and not outputs.

About the Author

Andrea’s 25-year, field-tested background provides practical, behavioral science approaches to creating differentiated, human-focused organizations. A 4x ADDY award-winner, TEDx presenter, and 3x book author, she began her career at a tech start-up and led the strategic sales, marketing, and customer engagement efforts at two global industrial manufacturers. She now leads a change agency dedicated to helping companies address both the operational and the psychological components of strategic change.

In addition to writing and consulting, Andrea speaks to leaders and industry organizations around the world. Connect with Andrea to access information on her book, keynoting, research, or consulting. More information is also available at www.pragmadik.com or www.andreabelkolson.com.

Originally published at https://www.linkedin.com.