Beyond Outcomes and Outputs
Mapping the inputs to your startup's success
"Outcome vs. output" is the wrong way to frame business performance.
Startups go through two stages of frustration before they figure it out:
Stage 1: You aim for goals like "Get the new product/campaign to X people by the end of Q2". Your team pulls it off, but bottom line doesn't budge. You feel disappointed. Then you realize — "We should focus on outcomes, not just output!"
Stage 2: So, you shift gears. You set goals like "Bring in XYZ new trials each month." You run a bunch of related projects, or maybe you execute by a playbook, but you only get about 8% closer to your goal. You feel stuck.
So what's stage 3? Let's dig into that.
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There’s no doubt that outcomes are what ultimately matters and must drive the plans. But here's the rub: they aren't quite in our control.
When it comes to planning and checking up on ourselves, we need something more within our control.
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In his 2009 Letter to Shareholders, Jeff Bezos described Amazon's focus on business inputs (emphasis mine):
Senior leaders that are new to Amazon are often surprised by how little time we spend discussing actual financial results or debating projected financial outputs. To be clear, we take these financial outputs seriously, but we believe that focusing our energy on the controllable inputs to our business is the most effective way to maximize financial outputs over time.
So, where do these 'inputs' fit in our "outcome vs. output" puzzle? Here's a few definitions to help clarify things:
Inputs are the stuff we need for our work — and that includes us.
We're talking things like your team, your workspace (be it an office or you remote setup), your hardware and software, what your customers need, your business partners and vendors, funding, etc.
Activities are the tasks and processes needed to get work done.
This can be anything from internal communication, researching, designing, building, testing & deploying, creating & publishing, and closing deals — all of which you can examine more closely for improvement.
Outputs are what you get when an activity is done.
These could be anything from launched products and features, services you've provided, to your team being trained on essential security practices. This is where our direct influence ends and we yield control to the market — and luck.
Outcomes are the immediate, primary effects you get from delivering a work product — usually the actual added value that comes from an output.
Think things like a new product feature being successfully used by all targeted users with uptime of 99.99%, an increase in signups for a free trial, or customers raving about your amazing customer service.
Impact are the long-term ripple effects of the work you've completed.
This can show up as strong customer retention, a healthier financial bottom-line, a competitive edge, or a reinvigorated company culture.
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Once you've got these ideas clear in your mind, it's much easier to put a continuous improvement cycle into action.
Of course, if you're a startup and you're trying something new, there's no way to know for sure if what you’re doing will work. But with this kind of thinking, you can approach your work like a series of hypothesis-driven experiments, not like a shot in the dark. Your odds of success will surely improve.