The Modern Manager 82: Measuring Outcomes Not Outputs with Jeff Gothelf
Why are big tech companies so successful? It’s not just that they create amazing products leveraging the newest technology. According to this week’s guest, it’s how they approach their work by focusing on continuous customer engagement and measuring outcomes. Even if you’re a service business, or an HR team inside a manufacturing company, or a small business retailer, we can all improve when we measure outcomes instead of outputs.
Jeff Gothelf. Jeff helps organizations build better products and executives build the cultures that build better products. He is the co-author of the award-winning book Lean UX and the Harvard Business Review Press book Sense & Respond. Jeff works as a coach, consultant and keynote speaker helping companies bridge the gaps between business agility, digital transformation, product management and human-centered design. Most recently Jeff co-founded Sense & Respond Press, a publishing house for practical business books for busy executives.
Jeff and I talk about how every team can benefit from managing themselves as if they were a technology company. He explains how to be in continuous conversation with your customers no matter who you define as your customers, so you can always be learning and improving. And we talk about how to shift the mindset and measurements of success from outputs to outcomes and why this is so critical for long term success.
Read the related blog article: Outputs or Outcomes: Measuring What Matters
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Key Takeaways:
- Years ago, software was delivered in a box. Every year, the product was updated and a new version was shipped. Tech companies today are able to gather lots of user data extremely quickly and therefore make hundreds of small changes to the software every day.
- This continuous conversation of learning based on customer or user feedback (did they click or not), enables them to deliver greater value.
- Every team, no matter the context, product, service offering, industry, etc, can benefit from learning from their customers. This ongoing conversation to gather feedback enables you to experiment with ideas and make small tweaks or major changes in order to achieve an outcome.
- Outputs are short term deliverables that are easy to measure: did we finish on time, on budget? Outcomes are more complex and grey: How well did the promotional efforts drive customer loyalty? How did employee wellbeing improve?
- Example: If the goal was to get employees to take 10% more vacation days by offering an unlimited vacation policy, and after 6 months, employees are taking 6% more, is that success or failure? It makes things more complicated for a manager to measure individual performance and determine bonuses based on outcomes.
- You must know the long term outcome in order to test if the short term output or deliverable is help to accomplish it. That is the feedback you want to gather - is this approach delivering on the outcome we seek?
- This is a learning journey for everyone. Start by saying, “forget the solution we're trying to implement or build, what is the problem that we are trying to solve? And, if we solve it, how will we know?”
- You must talk with your customers, whoever they may be. When you ask for their feedback, be prepared to hear that your initial ideas were wrong. This is the best way to learn quickly so you can adjust and deliver greater value.
KEEP UP WITH JEFF
Twitter: @jboogie
Publishing Company: https://www.senseandrespondpress.com/
mamie@mamieks.com