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It’s Not Just Semantics:
Managing Outcomes Vs.
Outputs
by Deborah Mills-Scofield
November 26, 2012
What’s the difference between outputs and outcomes? Some think the
question is merely semantic, or that the difference is simple: outputs are
extrinsic and outcomes intrinsic. I think otherwise; the difference
between outputs and outcomes is more fundamental and profound.
In the non-profit world, outputs are programs, training, and workshops;
outcomes are knowledge transferred and behaviors changed. In the forprofit
world, the distinctions are not always so clear. Let’s define
outputs as the stuff we produce, be it physical or virtual, for a specific
type of customer—say, car seats for babies. And let’s define outcomes as
the difference our stuff makes—keeping your child safe in the car.
Borrowing an example from the Innovation Network, a highway
construction company’s outputs are project design and the number of
highway miles built and repaired. Outcomes are the difference made
by the outputs: better traffic flow, shorter travel times, and fewer
accidents.
Outcomes are the benefit your customers receive from your stuff. This
starts with truly understanding your customers’ needs—their
challenges, issues, constraints, priorities—by walking in their shoes and
in their neighborhoods, businesses, and cultures. See what’s
inconvenient, taking a lot of time, money, and/or effort. Your customers
are too busy to plan, shop for, and cook healthy meals. What if you
made a healthy, reasonably priced, fast-cooking meal so a family could
eat better? Create a solution that your customers can sustain, and you
enable life-changing outcomes, big and small.
Outputs are important products, services, profits, and revenues: the
What. Outcomes create meanings, relationships, and differences: the
Why. Outputs, such as revenue and profit, enable us to fund
outcomes; but without outcomes, there is no need for outputs.
My hero and friend Steve Denning makes this distinction exceedingly
clear in his emphasis on the outcome of delighting our customers
instead of just making more stuff. Steve encourages us to tell stories
about our customers, about who they are and what they want, so they
can achieve.
Let’s take the story of Deb, who wants a new car and is very busy. She’d
like to buy a car from a dealer who will make buying and, more
importantly, servicing the car as easy as possible. She doesn’t have the
time to wait at the dealer while the car is being serviced—or even time
to get to the dealer for service. Since she travels, she’d like to go on a
trip and have the car serviced while she’s gone. What if a dealer picked
up and serviced her car, returning it all clean and detailed, without Deb
having to alter one moment of her schedule?
Another story, for example: A food company has a new product, all the
s’more ingredients in a box, and wants to make a big splash for the
upcoming spring and summer seasons—but it’s up against some
formidable competitors in the market whose brands are synonymous
with s’mores. What if a packaging company could help them strategize
not just how to package the product for higher acceptance into the mass
retail markets, but also where to place it on store shelves to get the most
exposure?
Through stories, we are able to empathize with our customers and
recognize the outcomes they need. Business in the 21st century needs
more focus on outcomes than outputs. We all can see where focusing on
outputs got us: In education we’ve focused on test results (outputs) and
ended up with some high-scoring kids who don’t know how to apply
what they’ve learned to the world at large (outcome), like how the
reasons leading to the American Revolution are similar to those that led
to the Arab Spring. We have a plethora of apps for our smartphones and
tablets (output), but how many do we consistently use—and how many
actually improve our lives (outcome)?
We may not yet have all the right tools, methods, and processes to
recognize and measure outcomes, but that’s no reason not to try. Let’s
create them together while we change our world.
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Read more on Customers or
related topic Product
development
Deb Mills-Scofield is a strategy and innovation
consultant to mid/large corporations and
partner in Glengary LLC, an early-stage
venture capital firm. She’s also a Visiting
Scholar at Brown University and teaches at
Oberlin College. Her patent from AT&T Bell
Labs was one of the highest revenuegenerating
patents for AT&T and Lucent.
Twitter: @dscofield.
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