Buy outcomes

When we buy outcomes, rather than inputs or outputs, we align the supplier's desires with our own

It’s practically a cliche to “focus on outcomes”. Yet I find it exceedlingly rare to see it done in practice.

And that’s a shame. Because there’s something almost magical about focusing on outcomes.

It mitigates a ton of baggage that comes from hiring… well… people. People tend to put their own needs and desires above that of the company. This is natural, and unavoidable.

And it leads many to try to find new and creative ways to incentivise their employees or contract agencies, or even punish them when they underperform.

How many of these have you seen or even experienced?

  • Pay bonus for not taking any sick leave during the year
  • Recognition (or extra doughnuts) for arriving early in the office, or staying late
  • Scorn (or discipline) for arriving late or leaving early
  • Time tracking, to ensure you’re at your desk/in the office a certain number of hours per day/week
  • Keyloggers or screen recording software to ensure you’re not playing games or browsing social media, or reading this email on the clock
  • Developers required (or strongly encouraged) to deliver a certain number of lines of code, story points, or features per week or sprint

Wait, that last one sounds like an outcome, doesn’t it?

No, actually it’s not. lines of code, story points, or features delivered are outputs, which are different than outcomes.

When we actually focus on outcomes, we’re not worried about the number of features shipped, or how many hours the teams’ butts are in chairs.

We care about the impact on the end-user. Were they able to produce more revenue? Generate more leads? Treat more patients? Make larger audiences laugh? Do more of whatever it is they use your software to do?

These are outcomes. And measuring outputs (i.e. features delivered) is at best a poor proxy. And measuring inputs (butt hours in chair) is even worse.

And here’s the thing:

When we buy outcomes, rather than inputs (person hours) or outputs (N number of features), we tend to align the supplier’s desires with our own. Whether that supplier is an employee, or IBM. Of course, this assumes the supplier is willing to work on these terms. Not all are.

But a contract that’s written this way tends to make for happier customers, happier suppliers, and better outcomes. And eliminates a lot of the micromanagement that tends to haunt traditional contracts and employment arangements.

Share this