Wondering if your company is OKR ready?
Cultural Shift from Output to Outcome Made Possible with OKR- Know-how!
For most action-oriented companies, specific things may be more exciting than just striking off a to-do task from a given checklist. However, it is critical to know that output and outcome are not always synonymous. So, what is the difference between an outcome and output? Why do people find it difficult to distinguish between the two? And, why is it important to know that Key Results enable us to measure outcomes and not outputs?
In simple terms, the output is a task you complete, and an outcome is something that occurs as a result of the study. For example, If you offer a demo to a prospect, that will be seen as output but if you win a customer, that will be an outcome. It is mainly seen that people primarily focus on outputs. It is simple to come up with a checklist of items; however, bringing things to closure defines your output, which for some reason, always comes last.
The Objective and Key Results (OKR) framework offers a flexible way to achieve business goals for any work culture or, for that matter, personal use. This tool can be seen to provide a cultural shift from an output or activities-based mindset to an outcome-based model for most organizations of today. OKRs offer the best blueprint to define your business goals and formulate a roadmap to achieving them. The methodology is concise, and the key objectives are the overarching goals the team would like to achieve. Results are actionable steps that are measurable, specific, and time-bound and are designed to help achieve the core objective.
While there are countless methods of designing and developing OKRs, drafting objectives and focusing on key results that outline progress can lead to spectacular outcomes. This write-up will focus on the difference between activity and impact and the two critical components of OKRs, output key results, and outcomes.
Importance of delivering outputs and achieving outcomes
As a business leader, it is critical to know the difference in the terms, not for just clarification but because key outputs are simple to measure as compared to outcomes.
In most cases, outputs are quantitative since data is made available to substantiate what has been delivered and by how much. Outputs can be reported easily and validated if required.
On the contrary, outcomes can be seen to be more challenging to validate since they are not only quantitative but qualitative too. Whether or not your outcomes have been accomplished will largely depend on how people perceive the service they have received. Perceptions are difficult to measure or, for that matter, to report, but you must try to find a method to do so.
It is to be noted that outputs may indicate the means to an end. If your company has successfully achieved all possible outputs, however, you haven’t successfully achieved the anticipated outcome, then it is essential to review all outputs to ensure they are correct. By just focusing on the outputs alone without looking into outcomes can create an adverse effect. Although all reports and scores may show green, reports on the achievements of your outcomes may show red when you take a deep dive, which means that customers are neither happy nor satisfied.
How do companies best understand outcomes vs. outputs?
Today most businesses are gradually moving from legacy services that are often paper-based to a digital platform. This cultural shift has changed the way companies have been operating for decades and this is why they find it tough to translate the work they currently do to accommodate the proposed new services.
Specifically designed workshops have revealed big reasons as to why this cultural shift has been difficult to adopt. Teams often think about outputs they currently offer rather than making an effort to adopt a transition to the digital platform. The change was essential, and that is why articulating business outcomes were necessary to help achieve a sense of direction of where the company was heading.
With the anticipated business outcomes clearly defined, the staff members successfully let go of historic outputs. They were able to produce new outputs that would enable them to achieve desired business outcomes. This approach was critical towards adopting a new way of working. As a result, when the staff finds themselves stuck while discussing processes, they pull back to drafted outcomes. This enables them to focus on key outputs they require, allowing them to step away from the traditional building and define new processes.
In the OKR system, understanding the key difference between outcomes vs. outputs is imperative. To trickle it down to different team members in the organization is even more critical. Focus on what your company is creating and offering to your customers. Are you placing a well-designed cake on the table (output), or are you focusing on delivering a room full of satisfied and happy clients (outcome)?
Make your initiative count.
OKRs are a great tool to communicate what issues are pressing and what to focus on to ensure progress. In most cases, outputs can be seen as indicators to progress. If you keep a tap in activities, maybe it’s time to rethink your approach. What change do you need to bring about to achieve your business goals?
A good move would be to engage others in the organization to frame your OKR. You can initiate the matter, but you can discuss and come up with key outcomes. You might even decide as a team that the output is a precise way to measure success. Don’t default, as your team can come up with amazing stuff that needs to be done to achieve desired outcomes or results. Keep your lines of communication open and ensure constructive discussion as and when needed.