Metrics: Output vs. Outcomes

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Y’all know I’m a big fan of metrics.  Long before I was in CX, I was in Process Engineering (Lean Six Sigma and Operations Research), and long before that I was an analyst.  My BS is in Mathematics, and I teach Statistics at the Air Force Academy.  So yea, I dig numbers.  I write about them a lot.

I was chatting with a colleague the other day and he had an awesome turn-of-phrase regarding metrics that I’d never heard of before.  He’s the leader of an international organization and we were talking about strategies and how important it is to ensure that leadership’s highfalutin strategies and visions are made real to team members in their own day-to-day work.  This is a standard theme in leadership and management:  Sure, we can design strategies and missions and visions for our organizations, but of course it’s the folks working on executable actions every day that are the champions who carry the deliverables across the goal lines.

Naturally, that turns to metrics.  But simply having metrics isn’t enough.  If you leave it to the visionaries and the leaders (CEOs, Presidents, Boards of Directors) to name the top-level KPIs but don’t boil down what that means that I, as a part of the team, am supposed to do, we’ll never get anywhere.  Turning numbers into results requires communicating, and sometimes translation.  My friend offered a great way of framing the challenge of driving higher-level metrics into operational, measurable goals.

He said, it’s the difference between Output and Outcomes, and it helps frame out how we all work together to deliver for our Customers.

For instance, the output of the work I do may be something like the number of widgets that passed through my work station to the next.  It may be the number of calls I take in my contact center per day.  It may be the number of units I sell, or ship, or repair, or insure, or whatever I do with our product or service.  Notice that each of these has an important attribute:  It’s countable.  And I, as a person who works within an organization, can exactly quantify the number of things I’ve done today, this week, this month, and this quarter.  I can also compare that with previous periods.

Now, as we rise and progress through the hierarchy of our organization, we tend to lose the connection to that output, don’t we?  When we’re promoted for the first time to the role of supervisor, we may still partake in the tactical and transactional nature of the job of our newly-appointed team.  We’ll throw on a set of headphones and take a few calls; we’ll give someone a break and take over at his or her station; we’ll take the wheel for a few metaphorical (or perhaps, literal) miles.  In many situations, one’s first supervisory role is simply an add-on to the tactical work someone continues to do.  Many new supervisors are still performing the same work their new subordinates (and former peers) are also doing.  But now they also get to aggregate the successes of the team they’re leading:  The output is the shared output.

Eventually, that supervisor becomes a manager.  Then a senior manager, then a director, or another executive.  While it may be fun to jump back into line from time to time, once someone becomes the ‘boss’, he or she isn’t doing that transactional work on a daily basis.  And as the responsibilities (the sub-organizations that fall under the executive’s purview) grow to include disparate organizations with different ways of measuring that output because it’s different work, it becomes more challenging to sum up success.  If advancing from one part of an assembly line to then manage the whole thing, the new measure of output isn’t components anymore, but rather completed units.  But once a manager becomes the Chief Operating Officer, well…there are an awful lot of other things that that entails.  The beans become many to count.

But that’s where we can start to see outcomes instead.  And that’s where we can start to see more direct impacts on our Customers, too (not that this is the first time we should consider them).  The manufacturing part of the company creates output (numbers of units built and shipped)…the company itself creates an outcome (the Customers’ experiences) that encompasses not just how many widgets we ship out the door, but also how well they perform the task our Customers have for them; how great the shopping, buying, and delivery experiences are; how well we handle their support needs; how we make them feel about being in our ecosystem.  That’s a long way from the person standing at a station on an assembly line turning a screw in each sub-component that goes by.

What’s more, when you take an even bigger view of the organization (now we’re talking about mission, strategy, and vision!), it’s back to hard numbers:  revenues, sales, market share, NPS.  But these aren’t the sort of output numbers we can simply do more or do less of.  We can’t directly impact them by simply doing more of our job.  They’re the outcome of all the work the organization has done together.

That’s why there are two vital things leaders need to do:

First, clearly articulate what those outcomes are supposed to be.  We all need to know the final outcome we’re shooting for (Is it market share? Revenues?  One of these others?) so we’ll know it when we get there.

Secondly (and this takes everybody all the way down the chain of command), those outcomes have to be clearly tied to the output of each individual member of the team.  I need to know, taking calls in the contact center, why and how my output (calls I’ve taken, cases I’ve successfully closed) impacts our overall outcomes.  If I’m clipping together part A into part B on the line, I need to know how my output (number of properly executed turns) translates into helping advance our outcomes.  It’s not easy work, this one, but that’s why the leaders make the ‘big bucks’.

But do we do that hard work?  If you’re in management, have you tied your team’s goals (the output of your team) to the overall strategic goals of your company (the outcomes)?  If not, challenge your own boss…ask him or her to explain why your team’s goal is what it is, how it makes sense in the broader goal of your boss’s larger team, and then make sure that explanation is known to everybody in your own department.  If you’re the CEO or partner, are you making sure your managers and supervisors are doing this?  When you call out outstanding performers (you’re doing that, right?) do you take the time to articulate the way this person’s hard work has paid off for the outcomes you’re seeking to achieve?

And of course, if you’re on the front line, are you bold and curious enough to ask your boss why?  Are you challenging the organization to make sure you and your fellow team members have the right clarity of goals and how your (and your team’s) output translates into impact on your larger organization’s outcomes?

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