The distinction between outcomes and activities isn’t new. Most leaders will tell you that it’s important to focus on outcomes. Yet, beyond talking about it, many have difficulty with the “focus” part.
The problem that I often see is that leaders struggle to manage outcomes and activities simultaneously. Outcomes become book ends. They are discussed during goal setting and then revisited during annual reviews. However, at that point it’s really too late to do much about the ones that were missed. So instead, most people simply reverse engineer an outcome to justify their activities.
As a result many of us don’t deliver the outcomes we originally intended or if we do, it’s often in spite of rather than because of the activities in which we engage.
An alternative is to manage outcomes and activities together. Each of us continually wears two hats: manager and leader. Management is about controlling and optimizing activity. Leadership is about driving outcomes. By constantly alternating between the two, leaders can ensure that they are on track to deliver real results to their organization.
The first step in doing so is to remember that activities support outcomes. They are important and necessary, but they should be your second consideration. Too often we begin our dialog with activities and work our way back to the outcome.
Instead as a leader, drive your entire dialog from an outcome. Start by asking if you are achieving the RESULTS that you set out to achieve. If not, then assess your activities to understand where the problems might lie.
This is a subtle but important shift. When you begin the dialogue with the activity, you’ll almost always create an illusion of progress. After all, you’re almost always doing something. In addition, when starting with activity, you tend to take get a false sense of assurance because you make assumptions about the result that the activity SHOULD produce sometime in the future which is always positive.
By starting with the actual outcome you remove any doubt as to whether progress is being made. Either you’ve saved money or not (if that was your goal) or your customers are more satisfied or not, or your quality has improved or not. There are no activity-based illusions. You don’t plant the victory flag until you start to see the outcome or change to which you committed.
Starting with the outcome, in this manner, is difficult for many people. One of the reasons is that we often set activity-based milestones rather than outcome-based milestones. Activity-based milestones outline the steps you’ll take (and when you’ll take them) to reach an outcome. Outcome-based milestones show where you’ll be at different points in time relative to the final outcome. For example, if your overall outcome is to save $100,000 in expenses over the course of a year, the outcome based milestones would be commitments as to how much savings you’ll realize each month (or quarter) throughout the year. That way, each month, you can’t simply show that you’ve been working to save money (activity). Rather, you must demonstrate the actual cost savings that you promised. If you aren’t achieving the savings, you know that it’s time to change your activities.
A second reason that outcome-based management is difficult on a day-to-day basis lies in the way that many leaders set goals. There are two common problems: 1) goals that don’t contain an actual outcome or 2) goals that combine the outcome with an activity. A true outcome-based goal should be short and simple. It should state what is going to change in your business, the direction of that change, and the magnitude of the change. For example, “Consolidate vendors” is an activity. Even if quantified by the size of the reduction, it’s still an activity. On the other hand, “Reduce contractor labor costs by 25%” is an outcome. Note that in the outcome-based goal, there is no mention of how the goal will be reached. This is intentional. By splitting the actual outcome from the activity, you create more options for achieving your goal. It also keeps you focused on achieving the goal since that is the place that you start all conversations.
The table below summarizes the difference in managing outcomes and managing activities. A good leader has to do both. However, from now on, try to start with the outcome and then move to the activity if needed.
Execution: Leadership v. Management
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Brad Kolar is an Executive Consultant, speaker, and author with Kolar Associates. He can be reached at brad.kolar@availadvisors.com. You can read more at Brad’s blog, The Question of Leadership.
