Let’s suppose you are launching a new iOS clothing app. You identify that your target customers are young women passionate about fashion. As a result, you prepare a marketing campaign highlighting the benefits of using your app for this segment of users.
In this case, the output is the launch of your campaign or the number of people exposed to your marketing campaign. The outcome is the adoption you manage to get as a result (and the retention).
What’s the difference?
An output is something you do, your efforts. It could be translated in work, time or money, but shouldn’t be confused with the outcome – the consequence of what you did (“the payoff“).
Nowadays it is generally accepted that in Product Management the outcomes and not the outputs are the ones that matter when it comes to team performance. Still, in many companies, there are product people or leaders that are more excited about the outputs than the actual achievements.
You can tell if a team is focused on the outcomes or the outputs by what they are celebrating:
- celebrating a new feature launch? (output focus)
- celebrating the achievement of a previously established goal? (outcome focus)
Companies focus a lot on what are trying to make instead of the business outcome they are trying to achieve or the problems they want to solve for their customers.
Why are we choosing outputs over outcomes
It’s tempting to choose outputs since they are much easier to measure and deliver. You just need to count:
- How many features did we launch?
- How many marketing campaigns you created?
Outputs also make you feel buys and valuable because you are measuring your added value by the effort invested.
On the other hand, measuring outcomes requires a commitment in terms of time and effort. Plus, are harder to achieve.
Why does it matter?
Asking product teams to build features or (even worse) measuring their effectiveness by the number of built features is the wrong way to go. For start, you will get features that create no value. Second, you will add complexity in the product that will create bad UX and high maintenance costs (more code, more problems).
If you don’t have an outcome focus will not be able to compare the results. You will not know what worked or didn’t and how can you improve in the future.
The outputs are not bad, are mandatory, and we should always appreciate the effort. You will not be able to achieve your goals without the right outputs. The problem appears when you focus exclusively on the outputs instead of outcomes.
In this case, you will not know if you are producing the expected results or if you are ever going to achieve them. The outcomes will represent the long-term goal achievement (the impact).
Moving to outcome-based thinking
1. Set clear goals
If you want an effective team everyone needs to understand exactly what you are trying to achieve. Everyone should have a clear grasp of the destination, especially the business and the product team.
2. Establish a way to measure the goal accomplishment
Now that you have a clear result to pursuit it’s time to have a measurement for success. Your team needs to know exactly when the objective is achieved.
3. Give your team flexibility in achieving them
This is a mandatory step in changing the output mindset.
An outcome focus helps to build a healthy company culture.
Let your team creativity find ways to achieve your goals and measure the progress.