Output vs. Outcome

Differentiating between output and outcome in planning is a subtle, tricky lesson that many leaders I've worked with have completely failed to learn.

Whenever we're defining the work that will be assigned to different teams, we need to define goals that will be accomplished by that work.

When defining goals, it's important to consider whether you're defining the output of the work or the outcome. While this might feel like quibbling over syntax, this decision has a huge impact on the confidence, trust, and even the retention of your team.

How do you assign work to your team?

Let's consider a real-world scenario: you lead a team at a software company that has a free tier, and the way you grow revenue is by convincing more users to take advantage of your more advanced product features that are available on the free tier but require a paid subscription for more serious use.

Your team is responsible for this growth. How will you define this work to your team? Take a minute to think about this before reading the next sections.

Outputs focus on how things get done

An output-focused leader tends to focus on the specifics of the work. For example, the team could get assigned a task to "create a webinar for new users to demo key features and explain the benefits of upgrading their account."

This is a reasonable action to take — webinars have certainly been effective for other companies in similar scenarios, so there's a decent probability that this would lead to more users trying the key features and, eventually, upgrading.

Outcomes focus on what needs to be accomplished

An outcome-focused leader instead focuses on what needs to be true when the work complete. For example, the team might get assigned a task to "increase the number of users who try key product features within the first 30 days by 10%."

The team is responsible for achieving that outcome. They might create a webinar to make it happen. Or they might try any number of other strategies: guided onboarding, starter templates, changes to the dashboard to make it easier to understand what the key features are and how to get started, or something completely different.

Assigning outputs strips the team of autonomy

We spend an incredible amount of effort recruiting and hiring experts for our teams. If we provide output-based direction, we largely bypass their experience and instead hand them a todo list.

The most impactful and engaged team members won't put up with being treated as a pair of hands. Leaders who overprescribe work by defining the output will have a hard time retaining top performers.

Assigning outcomes lets your experts be experts

Defining outcomes engages the problem solving expertise of your team. Your job as the leader is to define the boundaries and the rules of play, and the team's job is to figure out how to win the game within the defined boundaries and rules.

This requires trusting your team, and that trust creates a deep sense of ownership for the people who own the outcome. That sense of ownership and trust leads to much higher engagement and makes it significantly less likely that the team member will be daydreaming about finding a new job.

Outcome-driven work gets better results and builds stronger teams

Outcomes also means taking full advantage of the entire team's creativity instead of only the leader's. Accomplishing tasks shifts away from a top-down command and into more of a writers' room where the team collaborates on how to get from where things are today to the better world defined in the outcome.

The high levels of trust and collaboration in outcome-based work build incredibly strong teams that produce even better work together than any one contributor could create on their own.

Commit to defining outcomes (not outputs) for your team

Whether you're an experienced CEO or a brand new manager, you can build stronger, more creative teams by focusing on what outcomes are important to the company and leaving the decisions about how to get there to your team.

Trusting your team with well-defined outcomes will lead to more creative problem solving, higher team engagement, more people taking ownership of their work, and lower turnover. It also makes it easier for you to avoid micromanagement and stay out of the tactical weeds so you can focus on the critical work you owe to your team as a leader.