How to Shift from Measuring Activities to Measuring Outcomes
By Julie Springer
May 25, 2022
When you complete your strategic plan for the year or kick-off a major project, you set the vision and have a good idea about the outcome you are hoping to achieve. Perhaps your goals are to increase revenue, modernize your operational system, or have happier employees. Once you have the outcome in mind, you create a plan to achieve it, working with your teams to make a plan and define the actions you will take. You develop a roadmap and get to work.
Why Your Plan Goes Off-Track
This is where things can easily go off-track. Moving from defining to outcomes to deciding what to do requires making an assumption that the plan that is made will achieve the goal. If you aren’t careful, this assumption will never be tested. Teams will get focused on executing on the plan and the only measure of success will be completing the activities and achieving the milestones they defined. Too often, this happens without evaluating the impact on the desired outcome until you get to the end of the year or the end of the project. Of course, it’s too late at that point to course-correct.
Even experienced Agile teams, with solid practices for continuous planning and iterative delivery, can get caught in the trap of measuring activity instead of measuring outcomes. The measures for activity are more straightforward, including things like timeliness, predictability, throughput and quality. Managers gather these measures to show progress to leadership, so the teams see them as the primary indicators of their performance.
The problem is that these measures answer questions about what is getting done and how well it is getting done, but not whether the outcome is being achieved. If you are not on track to achieve the outcome, then the effectiveness of the delivery process is irrelevant. To fix this, you need to create outcome measures and use them to check in and adjust the plan, at least every quarter.
Create Outcome Measures
Create outcome measures to provide more clarity on the outcome that you hope to achieve with your strategy or project. You need to be able to answer the question, “How will we know if we have successfully achieved our goal?” The answer needs to be something more than, “We completed the project on time, on budget and at good quality.” The outcome measures are not a list of major deliverables, they are the result you hope to achieve with the deliverables.
Define several measures for each outcome. Include leading indicators that tell you that you are on the right track toward achieving the end goal, as well as balancing measures, which make it clear that working toward the goal should not create unintended, negative consequences for related goals. Identify the baseline for each measure (where you are currently) along with a specific goal for the end-state. When you are not currently measuring anything related to the goal, then your first step will be to figure out how to measure it, so you can establish the baseline.
A word of caution here: If defining outcome measures is new for you and your teams, make a list of things to measure, but don’t start with all of them. If the measures are too overwhelming it can be hard to get started, and often nothing gets measured or it is not done well. It’s better to start with one or two good measures and go from there.
Example Outcome Measures
Goal: Increase Revenue Generated by Service A
- Increase market share for Service A in at least X key markets
- Increase sales to new customers of Service A from X to Y
- Increase customer retention from X to Y
- While increasing revenue for Service A, maintain (or increase) revenue generated by Service B (This is an example of a balancing measure, to ensure that actions taken toward the goal do not generate unintended, negative consequences)
Goal: Modernize the Operational System
- Reduce average time to process a case from X to Y
- Increase staff satisfaction with the system from X to Y
- Reduce customer complaints related to accuracy by X%
- Reduce turnaround time for reports from X days to X hours, with X% of reports available through self-service
Goal: Have Happier Employees
- Increase employee satisfaction scores from X to Y (perhaps measuring responses to specific questions)
- Reduce turnover by X%
- Increase employee referrals from X to Y
Identify and Realign to Quarterly Outcomes
The next step is where you connect the dots between the high-level outcomes for the year or overall project to the features that the teams will work to deliver. Each quarter, define quarterly outcomes and work with your teams to determine which measures they expect to impact, and by how much. These quarterly outcomes are a subset of the annual or project outcomes.
For example, there were four measures for the goal of Modernizing the Operational System. This is a long-term project, so in a given quarter, the teams may only be working to impact one of the measurable outcomes. Perhaps they plan to work on improvements that reduce processing time, and expect to see a portion of the overall reduction expected by the end of the project. This provides clarity to the team on to the true measure of success for the work they will plan and deliver throughout the quarter.
In defining quarterly outcomes and learning what teams think they can achieve toward the end goal, you may find that your initial goals were too broad and you need to narrow them down. This is a good thing, because it gives you an opportunity to make intentional choices along the way, focusing on and prioritizing what is most important to achieve, as you adjust each quarter.
Shifting from measuring activity to measuring results takes time and can be challenging for managers and teams who are used to focusing on completing deliverables, but the investment is worth it. With time and practice, you can develop the confidence and data to know that teams are not just working hard, but working on the right things.