In so many of the conversations we have with Strategy and Operations Leaders today, the discussion around Outcomes vs Outputs often seems to carry some scar tissue.
For some, they’ve grown up in a world that views Strategy and Strategic Planning in the form of a checklist - projects to manage, tasks to complete, initiatives to undertake. And that is the Strategy - simply do a lot of things without any measure to the ‘why’ behind all of the work being taken on across teams.
We would say that these Strategists tend to lean more towards the ‘Output’ category.
On the other hand, some have been ingrained with the belief that every single Objective should have a measurable Outcome. If it can’t be measured, it’s not worth doing! This swings the pendulum in the other direction.
And while Outcomes are the end goal we are measuring towards, we need to understand that Outputs contribute to the achievement of those Outcomes.
So with that said, what if I told you that it’s not a matter of Outcomes vs Outputs? What if there’s a world where both can coexist harmoniously?
A world with both - Outcomes AND Outputs! 👏
Well, that probably wouldn’t generate the clicks, reads or comments because it lacks polarization... but I believe it’s the foundation to healthy Strategic Plans.
Instead of fixating solely on Outcomes or Outputs, a great Strategy, visible from the top to the bottom of the organization, contains both.
However, similar to last edition when I wrote about knowing where your risks lie, it’s crucial to have a good sense of what percentage of your Strategy is built around Outcomes and Outputs.
If you’re wondering about the difference between the two, think of it this way:
- Outcomes are clear, measurable targets that directly contribute or align to the Operating Metrics your plan is built around. Whether that is revenue, retention, cash burn, EBITDA, Rule of 40, or any of the other critical metrics you care about, the Outcomes you are striving for in Objectives should have a clear line to those metrics.
- Outputs, on the other hand, may not be as clear. For instance, completing our SOC2 Report is a critical output for Elate every single year. While I cannot directly tie a measurable Outcome to it, it is indispensable for us to meet the security requirements needed for our software platform to serve customers. This Output is vital to success and connected to one of our company Themes.
So, it’s not a matter of one or the other - Outputs or Outcomes. And we shouldn’t be fooled into thinking that is the only way to build a Strategy. A successful strategy incorporates both.
Outcomes are the main drivers for your business. If you’re behind on your Operating Plan, reviewing your Outcomes will help drive proactive decision-making around what has to change to get back on track.
Outcomes are the measures that give us a pulse on what’s occurring throughout the business. 📈
Outputs, meanwhile, play a crucial role in the day-to-day, ‘keep the lights on’ type of work. 💡This is why we build Outputs, or what we at Elate refer to as Tactics with Next Steps and Blockers. It allows us to empower team members to own their steps to completing their Outputs, while also surfacing any potential roadblocks preventing them from finding success.
As for the percentage allocation of Outputs vs Outcomes within your Strategic Plan, it depends.
For those organizations starting down the path of setting clear, measurable outcomes, we like to set a threshold of 60-40 in favor of Outcomes, gradually moving towards 75-25 for more mature organizations.
However, I want to be clear: don’t worry as much about the end number as the process to get there. Three mission-critical aspects in this journey include:
- Engage Leadership. Your executives have to be bought-in to the process or it goes nowhere.
- Encourage Team Collaboration. Transform inputs into valuable Outputs through consistent updates, comments, and tagging.
- Establish an Operating Rhythm. Build the case for the business value by setting a clear cadence for review and taking action on the proactive insights being surfaced by a solution like Elate.
If you accomplish these three things, you are on the right track! ✅
And if you take anything from this post, please, please remember that Outputs or Tactics aren’t bad in and of themselves. But they should be connected to an Outcome that answers the question, “In doing X, I am hoping to change Y”.
What are your thoughts on this topic? What resonates with you?
If you want to delve deeper into these topics, our team would love to connect. My calendar is always open for these types of discussions, so don’t hesitate to reach out to me directly. I’d love to hear from you.
Don't Stuff Your [Strategic] Suitcase
Similar to over-packing for vacation (you know, all those things you know you probably won't wear), it's very common for Strategy and Operations Leaders to over-prioritize Objectives in their Strategic Plan.
But we have to zero in on the essentials and ask ourselves:
- What outcome do we want?
- What are we trying to change or improve?
- What is our primary focus this year?
- What is one priority we want to celebrate achieving this time next year?
Karlie Briggs, our customer champion here at Elate, said it perfectly:
"Your strategic plan should reflect a well-curated capsule wardrobe—clear, purposeful, and ready to transition from down dog to date night or work to the weekend at any moment. It should also fit in your carry-on".
Thanks all for today... have a great rest of your week.