Outcomes Over Output: Why customer behavior is the key metric for business success

by Josh Seiden

an outcome is a change in human behavior that drives business results.

outcomes are the changes in customer, user, employee behavior that lead to good things for your company, your organization, or whomever is the focus of your work.

mistaking “making stuff” for making progress, and mistaking shipping features for being done. It’s a legacy of a time when we mostly made physical goods, and making stuff well was the primary challenge.

our highest priority is to satisfy the customer through early and continuous delivery of value.

there are only five things executives care about: increasing revenues, decreasing costs, increasing new business and market share, increasing revenue from existing customers, and increasing shareholder value.

break down “increase revenue” into smaller, actionable parts. In the language of the Logic Model, they need to move from talking about impacts to talking about outcomes.

To find the right outcomes to work on, we start with a simple question: “what are the customer behaviors that drive business results?”

because outcomes are things people do, they’re both observable and measurable.

These questions are my magic questions for finding outcomes. What are the user and customer behaviors that drive business results? (This is the outcome that we’re trying to create.) How can we get people to do more of those behaviors? (These are the features, policy changes, promotions, etc that we’ll do to try to create the outcomes.) How do we know that we’re right? (This uncovers the dynamics of the system, as well as the tests and metrics we’ll use to measure our progress.)

communicate in terms of outcomes AND the effect you want them to have on the impact the leader cares about.

Use outcomes (not features) to plan initiatives. Ask “what new behaviors will this initiative create that will deliver business value? How can we deliver that value sooner?”

one of the stranger things that we see in technology organizations. We refer to “the business” as if it’s a giant that lives somewhere in the distant hills, descending occasionally to demand service—as if everyone working for the company isn’t part of “the business.” This, I believe, is a relic of the way internal technology organizations in non-software businesses developed: as service organizations whose job it was to install, maintain, and operate third-party computers and software that could be used by “the business.”

when you have high confidence that the solution will work, the outcome orientation is less useful and planning with outputs is often appropriate.)

When you apply an outcomes-based approach to transformation I suggest you keep three rules in mind: Your colleagues are your customers. Everything is an outcome. Everything is an experiment.

When considering organizational change, take a customer-centric approach with your colleagues. What are their goals? What value can you offer to them in order to get them to “buy” the change you are selling?

Frame organizational change initiatives in terms of outcomes. What are the new behaviors you want to create in the organization? What will people be doing differently when your change program is successful?