Business leaders across industries and experience levels often find themselves saying, "We are working hard, knocking out projects, hitting our goals, but we are not moving the needle."
This scenario is surprisingly common and often reveals a faulty method: a goals-first approach. The impact of this flawed approach can be painful or even disastrous. While goals may have been "achieved" and boxes checked, the pursuit of these goals often constrains an organization's potential. Sometimes this unintentionally results in financial losses, client losses, and even lasting damage to your reputation or brand.
Without bringing outcomes into the conversation often and early, organizations can find themselves, at the end of a long work cycle, having completed the wrong goals and far from the end state they had initially envisioned achieving.
But this doesn't have to be you.
Embracing an outcomes-focused approach can allow your organization to increase:
When actions are informed by the outcomes that they are driving toward, the action becomes truly productive. Now you and your team are working with the end in mind, consistently a) moving the needle or b) course-correcting, to move the needle again.
Innovation & Collaboration
When an organization becomes outcomes-focused, teams and departments can collaborate to consider the best paths to get there. Not only does innovation and solution-focused thinking increase, now, goals and initiatives also become much more strategic. Within the context of outcomes, potential strategies can get properly scrutinized and considered before being decided upon. This can help avoid costly mistakes and increase employee engagement.
Motivation & Purpose
A team without outcomes is a team without purpose. That's why every team member should have at least one outcome that their day-to-day work is supporting. When teams understand the greater purpose of their actions, motivation and work quality often increase dramatically. Work can become a tribute to a higher purpose, something to take pride in, rather than an endless list of "to-dos" or boxes to check.
Outcomes First: How Does it Work?
Step One: Identify your key outcomes
Start by creating your top 3-5 outcomes in a given area. Each outcome will represent a different perspective and allow for a "balanced scorecard" approach to the ultimate result(s).
Though these particular outcomes (perspectives) can be different depending on what is most important for your organization, common examples include outcomes for:
To illustrate what an outcome for one of these categories might look like, let's consider a leader who wants to grow annual sales and sets a goal that is intended to help achieve that goal: 100 sales quotes per day. They believe that if the team hits that mark, the revenue will follow. You can see how this plays out over the year. The team submits 100 quotes per day to hit their marks, regardless of their qualification, because their leader measures them on the "100" number. Goal completed.
But an outcomes-focused leader asks, "Are we submitting quotes that best support our desired revenue target? Are we submitting to clients with the highest potential close rate? And, do these customers have the potential for additional growth?"
What if the intent for the sales team was this instead: "We achieve our monthly sales targets for our most profitable products, with increased month-over-month referrals and repeat business"? This helps better establish what success would look like for the sales team. This outcome statement defines the end state and answers "why" we want repeat business. In doing so, it changes the conversation from an action-focused "submit 100 quotes" to a result-focused one that asks, "Are we submitting the right quotes?". "Are we developing long-term relationships?" The sales team still takes action, but the action is now tied to a result that enables multiple tactics to achieve it. It empowers the salesperson to focus on understanding the customer's needs, regardless of the number of quotes submitted.
Step Two: Establish goals to measure progress towards the end state.
Here is when goals become useful. They establish points along the way to check progress towards the agreed-upon outcome. Think of them as milestones, or "checkpoints," throughout the year to see how the person is doing. If a goal is met, then we should reflect to see if it helped move towards the end state.
For example, in the above outcome, some of the goals may be:
- 60% of the closings coming from repeat customers (harvesting)
- 40% closing rate
- 45% gross margin in sales
Step Three: Resolve the actions (initiatives/projects) to achieve the outcomes and goals.
This is where the strategy becomes realized. What initiatives or changes do you need to implement to achieve the goal(s) and outcome (s)? These are the tactical efforts that will progress you towards your vision. Once identified, they will become your "roadmap"--guiding you on the journey towards your strategy. Some initiatives may change--and they will definitely be debated--because they are the living plan that adapts as you proceed.
This step is a key factor in whether the strategic plan is used (and successfully achieved) or just left on the proverbial shelf. By establishing what the end state looks like, the strategy execution shifts into a review of the initiatives' results. This creates a "living" plan that adapts and adjusts to meet the related goals and outcomes, as the year unfolds and circumstances change. If initiatives are not leading to the expected goal measures or outcomes, they need to be adjusted, stopped, or replaced with new ones.
In the example above, an initiative could be the creation of a customer satisfaction survey. Once implemented, ask, "Does the survey identify opportunities to increase repeat business from existing customers? What feedback from customers may lead to new initiatives towards that goal?" This enables leadership to assess if the actions taken in support of the strategy are working well or require changes.
This approach to strategic planning has an immediate impact on you and your team. The shift from goal-leading to outcomes-leading performance development is profound in how quickly it engages all your employees to move the needle. But it is not easy nor fast in the beginning. It requires a paradigm shift in how we think about outcomes over goals and actions. Do this, and you will find future strategic planning to be easier, and it will increase the number of successes in how your organization innovates to achieve it.