Recently I posted 5 simple changes you can make to transform organisations.

Let’s unpack the 1st, “Outcomes not Outputs”

An outcome is defined as “direct, tangible results of activities or processes” and I’ve personally experienced lots of teams are great at measuring them. Velocity; number of user stories delivered; or heaven forbid, the number of lines of code written (please don’t do this).

But story points mean nothing (one team’s 100 could be another teams 20) and that means also that velocity is also meaningless especially when comparing between teams.

If you still don’t believe me consider the following example:

An inexperienced but wide-eyed PM wants to improve the team’s velocity by 20%. The Dev Team conclude that the best way to achieve this goal is to up their estimates by you guessed it, 20%.

Nothing has changed… But everyone is happy.

Similarly if we measure the number of tasks or user stories completed then those could be equally manipulated to achieve exactly 0 extra business benefit.

The main problem here is that outputs are rubbish metrics for measuring the performance of your team.

Even the way I’ve experienced “business value” assigned in SAFe is valueless. e.g (This POC delivers a Business Value of 7/10). For me business value cannot be arbitrarily assigned a number and for me also can’t also measured up front.

But business value is at least the right label.

Business Value is defined as the total worth of something to the business. Does it make processes more efficient, does it offer financial benefits, will it aid decision making?

When we build features & solutions. They should be measured against the intended outcome. e.g.

  • By implementing this feature we would expect to see an 20% increase in Lead Conversion
  • A new CRM should lead to an increase in Customer Satisfaction of 30%.

By not doing this, you’ll never know if the solution you designed and implemented was a success for it’s intended purpose or even against it’s business case. You can’t measure the ROI of something if you don’t know what outcome it had.

Why then, are companies not doing this? Believe me they aren’t…

I’d actually love to hear your thoughts on this because I actually don’t have an answer.

I can only speculate that it’s either because:

  • It’s hard to measure the intended outcome of something.
    • Because the features being delivered are not valuable (they do not have a (visible) impact on the outcome)
    • People are tying to avoid Goodhart’s Law
  • It’s detrimental to measure business value because it would put so many projects & initiatives at risk.
  • Or that it doesn’t matter.

But measuring outcomes is one change you can make to help your transform your company because it makes sure the things you are working on are actually valuable so the take-away is:

If you’re going to measure something and here’s why you should, please make it outcomes, not outputs.

Do you agree? Let me know in the comments!