Why focusing on outcome over output pays off and how to make it work
Outputs are the tasks and products we specify (projects, milestones, features, etc.). Outcomes are the results we hope to achieve with each of the outputs we create (new customers, revenue, cost reduction, etc.). Unfortunately, outputs and the associated outcomes correlate less often than we hope for in advance. So what is the point of delivering an output that has no effect and cannot be considered a success?
Therefore, we as (Product-) Leaders may send the wrong signals if we celebrate and reward outputs, but not the achieved outcome. Instead, we should negotiate concrete, quantifiable outcomes as goals with all teams and celebrate and reward the achievement of those goals.
So what can we do to focus on outcomes rather than outputs?
Mutually define the outcomes to be achieved.
To achieve goals, we should first define them clearly. Based on a product vision and corporate goals, a product scorecard can be created that establishes specific key performance indicators (KPIs) for each product or at the corporate level. They represent the definition of success in measurable numbers. Note: in B2B, regulated or monopoly markets, this definition can be very challenging, as success metrics cannot necessarily be directly attributed to product metrics.
In any case, the metrics should be broken down to the respective team level, whereby not all values need to be relevant for all teams. It is important to include the teams in this discussion so that they can be held accountable for their goals. Teams, in turn, can use this to link defined deliverables (e.g., a function) to a particular target achievement (e.g., an improvement in a metric). They will seek to identify the greatest levers that will serve to achieve the objectives.
Ensure measurability and correct interpretation
Next, teams should ensure they are capturing metrics at the granularity they need for steering. Teams must ensure they have complete and accurate data. When measures have the potential to impact diverse layers, the undesirable, negative impact on other metrics should also not be ignored. For qualitative measurements (e.g. satisfaction), it is also important to evaluate the measurements in terms of meaning and not just as a number.
Adapt the development process
Those who work toward concrete results develop a mindset in which success is not a path that can be clearly defined from the outset. The first attempt to achieve a result is most likely not the perfect one, nor the last. They do not immediately move on to the next issue after delivering the first attempt. Instead, methods, tools, and time are used to learn from the previous attempts. The gained insight will be incorporated into the next set of actions. A culture of learning and testing solutions at a higher level emerges. After all, it becomes clear over time that while features and tasks can be delivered in isolation, to achieve results, all domains and departments can play their role.
Of course, teams may be happy about the completion of a milestone or delivery. But they should celebrate only when the results meet the hopes associated with them. Otherwise, they might get back to work. That’s not always easy. Some outcomes won’t become evident until months after the work has been done.
We cannot expect teams to feel responsible for results by assigning them work (deliverables). Consequently, if we want to build empowered teams, it is necessary to go through these steps and empower teams in small increments to feel accountable for results.
This article is part of the series Maximizing Product Management Potential