Output vs. Outcomes - Problem #4
Focusing on What Really Matters
The accompanying podcast was created with NotebookLM
This article is the fourth in a five-part series expanding on common business problems discussed in the widely popular Fish Food for Thought newsletters, The Human Condition. Throughout this series, we’ve examined a variety of business challenges, and today’s focus is on a key distinction that can either drive or derail a company’s success: the difference between outputs and outcomes. Too often, businesses fixate on delivering more, whether that’s products, features, or tasks, without asking the fundamental question: Are these efforts making a meaningful difference? This article explores why outcomes, not outputs, should be the true measure of success.
The Pitfall of Focusing on Outputs
In the fast-paced world of business, it’s easy to equate activity with progress. Many companies track success by the number of tasks completed, features released, or deadlines met. These output-driven metrics are tempting because they’re easy to measure and provide a clear, tangible picture of productivity. Teams often celebrate new product launches or hitting quarterly goals without reflecting on whether those efforts have achieved anything beyond short-term milestones.
One of the clearest examples of an output-focused strategy gone awry is Yahoo! Under CEO Marissa Mayer, the company was relentless in rolling out new products and features in an effort to turn around its declining fortunes. Yahoo! focused on the sheer volume of deliverables, churning out apps, redesigns, and services at a dizzying pace. Yet, these outputs failed to resonate with users or solve any real problems, and the company’s market position continued to weaken. Yahoo! was producing more but achieving less.
This focus on output over outcome is a trap many businesses fall into. Output-driven strategies can create the illusion of progress while missing the mark on what truly matters: delivering value. Success isn’t just about producing more; it’s about making a meaningful impact that drives long-term business goals, whether that’s improving customer satisfaction, growing market share, or driving innovation.
Why Outcomes Matter More
Outcomes are the true measure of success because they reflect the actual impact of a company’s efforts on its customers, employees, and bottom line. While outputs tell us what was done, how many products were shipped or how many features were added, outcomes tell us why it matters. For example, delivering a new product feature is an output, but improving customer retention or satisfaction because of that feature is an outcome.
The distinction between outputs and outcomes is more than just semantics. A focus on outcomes aligns business activities with broader strategic goals. It forces teams to think critically about the value they’re delivering rather than simply completing tasks. Instead of celebrating how much was produced, companies that prioritize outcomes ask, “Did this work create a meaningful result?”
An output-driven mindset often leads to short-term wins but long-term losses. Companies become so focused on delivering more that they lose sight of whether they’re delivering the right things. This approach can mask deeper issues, such as declining customer satisfaction or a lack of innovation. Teams may hit their targets and deliver on time, but without considering whether their work is driving meaningful outcomes, they risk wasting resources on efforts that don’t move the needle.
Take WeWork’s rapid expansion as an example. During its rapid expansion, the company prioritized the opening of new office spaces at an alarming rate, pushing into markets without considering whether there was actual demand or financial sustainability. Locations were launched in cities that couldn’t support them, and WeWork’s desire for growth outpaced its ability to operate responsibly. For a time, the sheer number of new spaces created an illusion of success, but the lack of strategic foresight eventually caught up with the company. When the financial realities set in, WeWork found itself teetering on the brink of collapse, having stretched itself too thin in pursuit of output. The expansion didn’t translate into long-term viability, underscoring the dangers of prioritizing quantity over quality.
The same risk exists internally. Teams that are rewarded for hitting output-driven KPIs, such as the number of product launches or the volume of tasks completed, are incentivized to focus on quantity over quality. This pressure can lead to rushed development cycles, incomplete solutions, and products that fail to meet customer needs.
Shifting to an Outcome-Driven Approach
Transitioning from an output-driven mindset to one focused on outcomes requires a fundamental shift in how success is measured. Instead of tracking how much was done, companies need to focus on whether their work drives real change. This requires rethinking KPIs, project management practices, and how teams are incentivized.
One of the biggest challenges in shifting to an outcome-driven culture is finding the right metrics to measure success. Outputs, like the number of features launched, are easy to track, but outcomes require more nuanced measurement. Metrics like customer satisfaction scores (CSAT), Net Promoter Scores (NPS), and customer lifetime value (LTV) offer a clearer picture of whether a company is delivering real value.
As Megan Cook, Head of Product, Jira, at Atlassian, recalled on Lenny’s Podcast, Atlassian’s approach to product development exemplifies how a company can evolve by listening to its users and responding to shifting market needs and provides an excellent example of the power of an outcome-driven approach. In the case of Jira, Atlassian initially focused on developers. However, they observed that the software was increasingly being used by non-developers, including teams from marketing, design, finance, and even HR. While Jira’s flexibility allowed these teams to use it, the product wasn’t optimized for their needs. This signaled an opportunity. Atlassian responded by creating Jira Work Management, a solution tailored to non-developer teams, driven by feedback from users who sought better ways to collaborate and manage work effectively.
In another example, Atlassian’s internal innovation program allowed employees to pitch new product ideas. One such idea focused on product managers' challenges in building roadmaps. Before committing ideas to Jira, there was a fuzzy period where product managers explored opportunities without making formal commitments. This led to the development of Jira Product Discovery, a tool specifically designed to assist in the early-stage planning process.
Atlassian refined their product development process with smaller teams, iterating quickly through a phased approach. Their stages of wonder, explore, make, impact, and scale, enabled them to assess product potential at each phase, investing progressively as customer validation grew. This process was exemplified by the success of products like Jira Product Discovery, Atlas, and Compass, which were developed in close partnership with customers to ensure product-market fit before expanding. Through these methods, Atlassian demonstrated an agile, customer-driven approach to innovation and product development.
Tools for Measuring Outcomes
To effectively shift to an outcome-driven approach, companies need the right tools and frameworks for measuring success. Here are a few strategies for making that shift:
Redefine KPIs: Instead of measuring success by how many tasks are completed or products are shipped, shift the focus to customer outcomes. Metrics like customer retention, satisfaction, and engagement provide a clearer picture of whether your work is creating lasting value.
Empower Teams with Autonomy: Outcome-driven teams need the freedom to experiment, iterate, and adjust their work based on feedback. Autonomy allows teams to focus on solving real problems, rather than just hitting targets.
Foster a Culture of Feedback: Continuous feedback from customers and employees is critical to understanding whether your outputs are driving the desired outcomes. Establish feedback loops that allow teams to adjust their approach based on real-world results.
Use Objectives and Key Results (OKRs): OKRs align teams around outcome-driven goals. Instead of focusing on how many features are delivered, OKRs encourage teams to think about whether their work improves customer experience, increases engagement, or drives revenue.
Finding the Balance Between Outputs and Outcomes
While this article advocates for a focus on outcomes, it’s important to note that outputs still matter. The key is to strike a balance. Outputs are necessary to drive progress, but they must be aligned with outcomes that truly matter. When outputs are tied to clear, strategic outcomes, they become meaningful measures of progress. Experiment velocity is a metric that I particularly like for this.
A good example of this balance is Spotify. Rather than focusing on the number of features launched, Spotify uses OKRs to measure whether those features improve user engagement, retention, and satisfaction. This outcome-driven approach allows Spotify to continually innovate while ensuring that each new feature delivers real value to its users.
Conclusion: Prioritizing What Truly Matters
The shift from an output-driven to an outcome-driven mindset is not just a tactical adjustment, it’s a strategic imperative for businesses seeking long-term success. While delivering more features, products, or services may create the appearance of progress, it’s the impact of those outputs that truly defines success. Companies must move beyond simply measuring how much they produce and focus instead on whether their efforts are making a meaningful difference. This shift in focus requires rethinking KPIs, fostering a culture of innovation, and empowering teams to align their work with long-term strategic goals.
By prioritizing outcomes over outputs, businesses can ensure that their efforts are not wasted on activities that fail to move the needle. This approach encourages deeper engagement from employees, better alignment with customer needs, and a clearer understanding of how each initiative contributes to the company’s broader mission. It also helps organizations avoid the trap of confusing busyness with productivity, ensuring that the work being done is not just getting done but making a lasting impact. Companies that thrive are those that can balance both outputs and outcomes, driving progress in a way that is both sustainable and meaningful. The journey toward outcome-driven success requires patience, commitment, and a willingness to continuously reassess what’s working. However, the rewards, greater customer satisfaction, stronger market positions, and more motivated teams, are well worth the effort.
As we wrap up this discussion on the importance of focusing on outcomes over outputs, the next and final installment in this series will delve into a challenge that resonates deeply within engineering and product development teams: Engineering Efficiency vs. Engineering Experience. In the drive to increase productivity and speed up delivery, many companies focus exclusively on efficiency, measuring success by how much code is written or how quickly tasks are completed. But there’s a critical trade-off when the developer experience (DevEx) is overlooked. A culture that emphasizes sheer output can lead to burnout, technical debt, and disengagement among engineers. In the final article, we’ll explore how businesses can strike a balance between efficiency and experience, ensuring that their engineering teams are both productive and fulfilled. This shift from viewing engineers as output machines to valued innovators is key to building a sustainable, high-performance culture that drives long-term success. Stay tuned!