A common challenge people have when planning OKRs is the difference between output and outcomes. Here we’re going to help you know how and why differentiating output vs outcomes will help you set better goals and achieve more.
An outcome is a measurable result that can both describe what has been achieved as well as describe what success could look like. In the context of goal setting the outcome is what you want to achieve at the end of a period of time like a quarter.
An output is the work being done by a person, team or company. These are the activities, initiatives, projects, epics, sprints and to-dos and cards that are completed. They could also be described as things like functionality, features and campaigns.
Understanding the differences matters because having a meaningful way of clarifying what work is trying to achieve allows you to track and optimize value creation beyond working harder, faster and smarter.
What matters most, increase productivity or velocity by 100%, or, knowing that those improvements have had an impact on desirable outcomes like customer engagement, satisfaction and revenue?
We are going to explore the differences between outputs and outcomes and provide examples of how each can differ between teams.
Here are some examples of outputs and outcomes for agile software engineering teams, marketing and human resources.
Agile working principles are aligned with value creation and the principles of:
The goal of agile teams is to deliver customer value in every sprint, not just complete cards. If you’ve selected the right Output measurements you can gauge the value of the things being produced and the value that is being delivered.
There are usually outcomes that can be defined for goals that are ideally leading indicators that are tracked as KPIs as well. For example, the usage of a particular feature or the conversion rate from one customer journey state to another e.g. customer trial : paying customer. These leading indicators influence lagging indicators.
Another type of metric or KPI that might be targeted as a outcome related to department or teams KPIs. For software teams these might include:
The outputs of software teams are cards. These are often grouped as sprints and epics.
Marketing teams also work in an agile way with work being managed in projects and kanban boards and budgets, forecasts, OKRs or SMART goals being a common way to track performance.
What is typically achieved and could be classified as Outputs would include:
The Outcomes marketing teams might be measuring will depend on factors such as whether the company in B2B or B2C but if we use a B2B example, these might include:
The work done in HR teams is wide and varied and like the other examples given, is only intended to illustrate the difference between outputs and outcomes. It would not be uncommon for a HR teams to:
How would you know if the work was having the desired impact? The outcomes of that work might be measured using metrics such as:
Outputs obviously matter and teams need to frequently discuss and adapt their outputs based on outcomes, it’s the outcomes that create meaningful value. High-performing teams have clarity on the outcomes that will define what success looks like for any given quarter and these are often expressed as OKRs.
A practical guide for C-Levels to optimize strategy, OKRs, people and company culture to create a step-change in performance.