In most companies, with the pursuit of innovation, there’s ambiguity in job roles and often overlap. People working in Product Management, Product Marketing, Customer Success, Sales, Product Design and many others don’t look as similar from one organization to the next as many other historically older positions. But one thing these groups all have in common is the need to drive outcomes and not focus on just output.
A simple example of this would be a sales person. If the sales person was only measured on output, their compensation would be based on how many calls or client contacts they could make. Of course that’s illogical and what they’re compensated on is the outcome, the result (“purchases”) that those sales activities lead to.
The concept of outcomes is not new though. Andrew Grove, former CEO of Intel, wrote about this nearly 20 years ago in High Output Management. We’ve written about John Doerr and the OKR’s they used to measure performance. This same concept has been discussed specific to marketing by guru Seth Godin and in Farm Don’t Hunt Guy Nipraz explains how empowered Customer Success teams are allowing, in particular subscription based tech companies, to employ this concept.
If measuring outcome vs. output is the better way, why then don’t most people, teams and companies focus on it?
- It’s Harder. It’s really easy to look at a KPI that you can control and just measure it. It’s much more difficult to look at the business outcome that you want to drive and then unpack the latent constructs that effect it. It takes time, creativity, and detective work to get to the underlying things you can measure that actually drive or predict outcomes.
- Autonomous teams make leadership nervous. The best organizations hire bright people and then give them a problem to solve while empowering them to accomplish it. But often the urge to micromanage or dictate direction get’s in the way and you wind up with frustrated teams that are simply executing orders already given to them – the most difficult way to innovate. Sure, they may stumble on a few issues but over time, an empowered team with an outcome to achieve will find greater success than an output team.
Spotify was recently criticized for their approach to product development at scale. But as Marty Cagan pointed out, what the authors missed is that despite those problems of output, they got so many things right that they went on to create a company worth more than $25B and the arguably the number one reason for that was the emphasis they placed on autonomy.
By empowering teams and then allowing them to uncover (“discover”) what’s behind the outcomes they’re aiming for you maximize your organization’s chance for success.