Outcomes versus activity

Which of the following goals reflect business outcomes?

· Reduce procurement costs
· Standardize customer service processes
· Implement an enterprise-wide financial system
· Increase manager attendance/throughput in leadership development program
· Increase the use of preferred vendors
· Decrease SG&A expenses
· Increase customer service calls taken per hour

Only the first and sixth are true business outcomes. Did that surprise you? The rest are activities – all done in service of an outcome, but not outcomes themselves.

In everyday use, an outcome (or result) is something that is completed – the culmination of an action. People assume that f they are in charge of a wide-scale system implementation, the “outcome” is a new system. This is a legitimate interpretation. But I’m not sure that is what leaders mean when they say “business outcome”.

Leaders don’t just want stuff done. They want stuff done that impacts their business in a positive way. A new system is neutral – it can create a result but it might not. The real result is what happens in the organization because of the new system. For example, if the system was intended to automate certain processes and reduce administrative costs, yet those costs don’t go down, then it hasn’t made a difference (assuming that nothing else changed either). If the costs do decrease, then there is a change. It’s the change in cost that is the result – not the system. Leaders care about the savings, not necessarily, how you get there. Their goal isn’t to have a system, it is to have lower costs. That’s when they starting counting value.

In the fast-paced business world, people who “drive results” get recognized. It is generally faster (and more visible) to complete an activity than it is to see the change to the business. Therefore, the activity often takes center stage. In the short term, creating a lot of activity might generate rewards. Over time, however, it will lose its luster. At some point you’ll be asked to show the value of all of that activity.

The problem

Switching from an activity focus to an outcome focus is more than just a mindset change (although that is an important first step). Activities can be accomplished discretely, outcomes cannot. So if you are signing up to an outcome, you’ll probably need to involve more people, more streams of work, and more effort. Similarly, signing up for an outcome also creates greater and more visible accountability. It’s one things to promise a redesigned process or new set of policies. It’s quite a different thing to commit to making customers happier or reducing operating costs. Yet, although its more work, signing up to deliver a true business result will make you, and your organization more succesful overall.

A common pushback I hear is that major initiatives can span multiple years. Therefore, if you are only taking credit for the “outcome” you won’t have anything to show while you are working. I encourage leaders to plan their two to three year stream of value and outcomes. Therefore, while you are working on a new program this year, you are delivering the results from the program that you completed last year. That way, you always have work in progress and true outcomes being delivered.

Leaders are under increasing pressure to deliver results. It’s time to change the way we think about what those results look like. A lot of activity doesn’t necessarily equate to a better organization. Getting things done only matters if those things make a difference.

Print Friendly, PDF & Email

2 thoughts on “Outcomes versus activity

  • Anonymous says:

    Chief: Nice post. I like way you encourage us to emphasize what our activities are designed to accomplish. It’s useful to keep our eyes on larger goals. That can help us streamline what we do, root out the empty tasks, and save time for generating more meaningful practices.

    I’m wondering, though, how far you want to push this outcome focus. When you write that “Leaders care about the savings, not necessarily how you get there,” are you implying that leaders should turn a blind eye to dubious, sub-legal, or otherwise problematic activities, as long as they get the job done? I can’t help but think of Enron, Madoff, and the dubious assortment of multi-millionaire “leaders” who have “driven results” at the expense of employees, investors, tax payers, etc.

    Maybe your definition of leader includes an ethical component and if so I apologize for my rant. As ever, I’m just wondering. . . .

    February 12, 2009

  • Brad says:

    Great point. I was sloppy in what I wrote. I wasn’t proposing that people achieve outcomes at any cost. My point was intended to be taken within a set of ethical boundaries.

    Also, I was focusing very narrowly on one outcome and how it is achevied. A good leader will have a whole set of outcomes that should be balanced to ensure that the right things are being done financially, ethically, for your people, and for the business as a whole.

    February 13, 2009

Comments are closed.