We set Sales teams quota targets, but we don’t tell them they need to close a specific deal on a specific day.
We ask marketing teams to commit to driving a certain number of leads within a specific time period, but we don’t tell them that a particular campaign needs to drive those leads.
And yet, we ask our product development teams to deliver specific features by specific dates and produce roadmaps of features to give the comfort of ‘certainty’.
Feature roadmaps set the wrong expectations and put the product and development teams in a position of having to defend any deviations from the plan. When the team fail to deliver what we expect when we expect it, we lose trust.
That is management by output.
Product development is inherently complex: welcome to the realm of “unknown unknowns”, an unpredictable domain where we only understand why things happen in retrospect.
This is the space of experimentation, where patience is required so the path forward can reveal itself: the solution emerges when more information comes to light.
More and more of the problems that challenge Organisations in the modern world are complex ones: introducing new products to new sets of customers in markets that are far more volatile than they ever have been before.
So why the heck are we trying to manage this environment in the same way that we would manage a building project? Traditional management approaches such as PRINCE2, PMBOK, Waterfall, etc don’t work effectively in a complex domain where cause and effect are unpredictable.
A focus on tangible deliverables (outputs) is no longer sensible and whilst the focus remains on them, there continues to be a disconnect between the Organisation’s goals and the actual impact delivered.
Success is no longer about simply delivering tasks - it’s about delivering value. To do that we need to probe, sense and respond; learning, experimenting and iterating to find the emergent solution.
Organisations wedded to a culture of command and control management struggle with this. Their leadership is over-controlling, they demand concrete business plans and don’t tolerate failure. Unfortunately, unless they recognise the domain they are operating in and shift their principles, these organisations are doomed to fail themselves.
Transitioning away from being resolutely focussed on outputs to being outcomes oriented requires a strategic and cultural shift which requires moving through the following 10 steps:
1. Define and Communicate your Vision and Strategy
Clearly define the why, and direction of travel. What is the company aiming for, and how are we going to get there? Everyone needs to know this, it’s about telling your people who they can become and what actions are we going to take to make that happen.
2. Set Clear, Measurable Goals and Track them
Set a series of objectives (goals) that are measurable, outcome oriented and results driven and have these cascade down through the organisation to encourage transparency and alignment.
3. Align Roles and Responsibilities
Ensure every team member understands how their role contributes to the desired outcomes and how their work impacts the organisational objectives.
4. Develop a Culture of Accountability
Foster a culture of accountability where individuals and teams take ownership of the outcomes they are responsible for.
5. Empower Decision-making
Encourage employees to make decisions that are aligned with the desired outcomes, and empower them to take calculated risks, experiment and innovate in pursuit of those outcomes.
6. Collect and Analyse Data
Implement robust data collection and discovery processes to track progress, measure the impact of team’s efforts on outcomes and understand opportunities. Use this data to make informed decisions, identify areas for improvement, and adjust strategies as needed.
7. Iterate and Adapt
Adapt and pivot strategies based on the data and feedback received and continuously assess the relevance of goals and outcomes to ensure they remain aligned with the organisation's mission and evolving needs.
8. Provide Training and Support
Invest in training and development programmes to help employees acquire the necessary skills and knowledge to contribute towards outcomes, and provide coaching and mentorship to support individuals and teams in developing new behaviours and habits.
9. Communicate Progress
Regularly update all employees on progress toward achieving outcomes and value transparency throughout the organisation to maintain engagement and commitment.
10. Learn from failures
Understand that not all efforts will lead to desired outcomes and that operating in the complex domain is unpredictable. Use failures as feedback and learning opportunities to refine strategy and approach.
Moving away from outputs to become an outcomes-oriented organisation is a significant undertaking that requires time, commitment and expertise. It involves not only structural changes but also a cultural shift toward a more holistic and goal-driven mindset.
Start with a well-defined strategy, build a guiding coalition of people who will drive the change and work closely with employees to ensure the implementation is successful.
It’s not easy, it’s not quick, but those organisations that embrace complexity and support experimentation, reflection and patience will nurture a culture that values innovation and produces outstanding results.
You will thrive in a world where sadly, many firms will die.
If you need help, you know who to call…