Results before solutions

The decision about what your company should do next can be compared to climbing a ladder: on the lowest rung there is a problem to solved, and right at the top is a change in business results.

Why customer habits are the most important benchmark for corporate success

In his book entitled “Outcomes over Output”, Joshua Seiden describes how companies often focus on what they produce (output) instead of turning their attention to the effects on human behaviour (outcomes). He points out that the decisive element is not what we build (features, apps, websites, products, solutions, etc.), but the value we create. That is also why the seemingly perfect solution to a customer problem does not always work.

If the company creates no value, the desired operating result (impact) will not be achieved. Many companies are very good at defining operating results (e.g. increased revenue) and developing solutions (e.g. website, app). But before we adapt our website or app, we should understand which measurable behaviour (outcome) must be changed to achieve the operating result. Such a change in behaviour could be a smaller number of aborted orders on the website.

An outcome is a measurable change in behaviour that affects the operating result.

To understand the principle, the Logic Model Framework helps by illustrating the interaction between the planned work and the desired results:

All companies want to achieve the best possible operating results, for example increased revenue and profits or reduced costs. Doing this, however, requires measurable changes in behaviour among customers or users (user goals). The business goals must therefore be broken down into measurable changes in behaviour. For teams, the business goal “We want to increase revenue” is not sufficiently tangible. If, on the other hand, the team is given the user goal “We want fewer terminations in the order process”, it can work on a specific problem. In doing so, it makes a direct impact on the business goal.

The management board must be able to give its teams some slack

Often, a team is set the task of implementing a business goal in the form of a solution, for example “Build feature X for me”. In this example, the team is told WHAT it must do. This limits the creativity of the employees. A better approach is to set the team the following task: “Solve problem Y for me”. This gives the group greater independence, which in turn boosts motivation enormously. The team becomes the “problem owner”. From the management board’s point of view, this step is not to be underestimated: it is relinquishing control. Previously, it was the management board that solved problems. With the outcome-based approach, the problem is delegated to the teams.

Conclusion

• We need to understand which types of behaviour affect operating results.
• Then we need to define which measurable behaviour we want to change in order to achieve better business results.
• Only then should we address the solutions designed to help people change their behaviour.