Outcomes Over Output Why customer behavior is the key metric for business success - Josh Seiden

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Here is a summary of the key points from “Outcomes Over Output”:

• Outcomes are changes in human behavior that drive business results. They focus on how customers, users, employees act, not just the features or products created.

• Output refers to the things created, like features or apps. But output alone does not guarantee value or impact. Features can be made but not change behavior or drive results.

• Projects should focus on outcomes, not just churning out features. Outcomes help achieve the larger impacts and business goals.

• The planning process should aim to deliver outcomes with as few features as possible. Don’t make unnecessary features just for the sake of output.

• Common project goals like profitability or risk reduction are too high-level. Teams are better served focusing on specific, measurable behavior changes that collectively drive those bigger impacts.

• Examples of outcome goals include getting customers to log on more, spend more, share content, complete tasks faster. These are behaviors that indicate value is being delivered.

• Outcomes should be used for goal-setting, project planning, and evaluating success. Did the work actually change relevant behaviors and drive the desired business results?

So in summary, the key message is that companies should prioritize outcomes over just outputs, and focus project planning and measurement on how work changes customer and user behaviors for better business performance.

Here are the key takeaways:

• Outcomes are a specific type of goal that focuses on changing customer/user behaviors in a way that drives business results. The definition is “a change in human behavior that drives business results.”

• Defining goals as outcomes keeps teams customer-centric and focused on delivering value. It allows flexibility in how they achieve the goal.

• Managing with outcomes rather than outputs or impacts gives teams permission to experiment and find the best solution.

• To determine if an outcome is achieved, teams need to test hypotheses through experiments and MVPs (minimum viable products, which are just a type of experiment).

• Some examples of outcomes could be: increasing customer logins by 10%, reducing customer churn by 5%, increasing repeat purchase rate by 3%, etc. These are specific, measurable behavior changes.

• Outcomes help break down high-level impacts that executives care about (like increasing revenue) into concrete goals that guide teams’ work and allow for agile experimentation.

• The overall concept is that outcomes give autonomy to teams while keeping them aligned on delivering customer value and business results through experimentation and iterative learning.

• Successful companies focus on outcomes, not just financial impacts like revenue and profits. Outcomes are customer behaviors that drive business results.

• To find the right outcomes, companies ask what customer behaviors drive desired business results, like increased site visits. This leads to potential outcomes like opening newsletters or sharing products on social media.

• Outcomes should be observable, measurable behaviors.

• Customer behaviors that predict future results are leading indicators. Results like return visits are lagging indicators that don’t reveal how to improve.

• Hypotheses state the assumed relationship between an output and desired outcome to be tested. For example, increased social sharing may increase return visits.

• Experiments test hypotheses by observing correlations. Minimum viable products validate assumptions quickly.

• Key questions for finding outcomes include: what customer behaviors drive results, how to increase those behaviors, and how to know if assumptions are correct. These “magic questions” guide the process.

In summary, the passage discusses how focusing on measurable customer outcomes rather than just financial impacts leads companies to better understand customer behaviors and test assumptions through hypotheses and experiments. This helps improve business results.

• Tracking outcomes and customer behaviors, rather than just outputs or features, allows organizations to better measure progress and success. It helps ensure teams are focused on creating real business value.

• Defining intended outcomes helps align leaders and teams. Leaders think in terms of impacts and results, while teams focus on specific outputs and outcomes. Clarifying expected outcomes bridges this gap.

• Outcomes-based planning starts by identifying key customer and user behaviors that drive business results. Teams then work backwards to define outputs and initiatives that will encourage those desired behaviors.

• Outcomes make it easier to write objectives and key results (OKRs) by focusing on measurable behaviors rather than vague concepts like “success”.

• While outcomes provide a useful framework, organizations must acknowledge the complexity and uncertainty involved when linking multiple outcomes into a systems-level plan. Not every step in the chain is deterministic.

So in summary, focusing on outcomes rather than just outputs or deliverables provides a clearer line of sight between work and business impact. It helps teams and leaders stay aligned on creating real value through their efforts.

• Traditional roadmaps focus on predicting outputs like features and release dates, but this leads to frustration because the future is uncertain.

• A better approach is to plan around outcomes rather than outputs. This involves identifying a system of related outcomes that will achieve the desired result, rather than focusing on individual features.

• One method is to create a customer journey map, which maps out a customer’s experience with a product or service over time.

• The journey map can then be analyzed to identify “boosters” - behaviors that lead to success and satisfaction, and “blockers” - behaviors that lead to failure and dissatisfaction.

• These behaviors represent outcomes the team can focus on improving. For example, increasing the rate at which buyers and sellers meet early in a process.

• The roadmap can then focus on questions, themes and outcomes rather than concrete outputs, making it more flexible and adaptive to changing conditions.

So in summary, the article advocates shifting from output-focused roadmaps to ones centered around identifying and improving customer behaviors and outcomes through techniques like customer journey mapping. This makes planning and goal-setting more agile and productive.

The article discusses how HBR.org reorganized their teams around outcomes instead of outputs. Previously, teams were organized by product or channel (like iOS app team) which made it hard to coordinate across touchpoints to achieve broader goals like customer re-engagement.

HBR.org realized this after a project to redesign product pages didn’t achieve expected returns. They decided to try an outcomes-based approach on their next project around reducing subscription “funnel bounce rate”.

Key aspects of their outcomes-based work:

• Clearly defined the user and business outcomes they wanted to achieve and linked them (e.g. reducing bounce rate would lead to more completed purchases)

• Looked at data to understand where bounces occurred and interviewed users to find root causes

• Iterated solutions like simplifying price display rather than just adding features

• Changed workflows to get design and development collaborating earlier through wireframes and prototypes for early user feedback

Overall it showed how important specifying clear outcomes, basing work on data/insights, and cross-functional collaboration are for success with an outcomes-based approach.

The summary is that managing stakeholder expectations during a transition to outcome-oriented work requires early collaboration across the whole team. When moving from fixed dates and feature specifications to focusing on outcomes, stakeholders still want to know when the work will be done. This requires real conversations between the team and stakeholders to define measures of success and agree on when progress will be reviewed. Building trust between the team and stakeholders is also important during this transition period. Regular collaboration helps address stakeholder concerns and keep them informed and aligned as the team’s focus shifts from outputs to outcomes.

• The team at HBR focused on reducing abandonment in subscriptions. They improved stakeholder engagement by having more frequent check-ins and sharing lessons learned from retrospectives. This built trust with stakeholders.

• Emily’s advice from this experience was to be open about failures and lessons learned. Presenting honest reflections on what they did wrong helped stakeholders understand the focus on continuous learning.

• After 9 months of focusing on outcomes, the team saw improvements in stakeholder satisfaction based on monthly polls. They were also more confident their work produced meaningful business results by measuring outcomes.

• Kevin said focusing on outcomes helped shift their understanding of “product” from something on a shelf to organizing around outcomes. This allowed them to take advantage of agile principles to continuously deliver value, even though they don’t have discrete products. The approach helped transform their work.

So in summary, the team improved stakeholder engagement, built trust by openly sharing lessons, saw higher satisfaction and confidence in results after 9 months of focusing on outcomes-based work. This outcomes approach helped transform their understanding and way of working.

Here is a summary of key behaviors promoted in the passage:

• Taking a customer-centric approach when considering organizational change. Understand colleagues’ goals and how you can offer value to “sell” the change.

• Framing change initiatives in terms of desired outcomes and new behaviors, not just plans or features.

• Identifying important outcomes you want to create before planning how to achieve them.

• Experimenting to make progress toward outcomes, rather than relying only on planning. Try something small, see if it works, and invest if it does.

• Adopting an action-oriented, agile approach to behavior change through experimentation, rather than only top-down planning.

The passage emphasizes focusing on outcomes over features or plans, understanding what specific new behaviors you want to promote through change, and using experiments to progressively work toward those outcomes in an agile manner rather than relying solely on predetermined plans.