What are outcomes and outputs?

🎯 OKR Planning
Nov 8, 2021
What are outcomes and outputs?

Creating a startup is easier than ever before, and the entry barrier is quite low. However, a large number of startups still fail to make it. They have a great idea, incredible talent, and sometimes, adequate cash, but they are unable to stay in business. While there are numerous underlying reasons for failure, there is one that keeps coming up again and again. They forget to differentiate between outcomes and outputs.  

Many startups make the same mistakes and struggle with the Outcomes vs Outputs conundrum. They believe they are achieving business objective and key results or OKRs, but they are often not. That isn't to say that businesses can't grasp or learn a winning approach.


What are outputs?

The term "output" can be used to describe a variety of activities. Initiatives, plans, projects, deliverables, milestones, strategies, and so on. The output is a step you take to achieve your objectives. Outputs, like everything else, have their place. They are still necessary to fulfill your objectives, but they should not be your primary focus or a metric for success. You must focus on measurable outcomes that provide value to the startup or company. I strongly suggest you quit doing work for work sake if it isn't bringing you success!

In a nutshell, outputs are the characteristics of your product. Everything that is shipped to a customer is an output, from design through execution. In theory, this appears to be the logical thing to focus on, but in practice, it's what's destroying most enterprises. Only your team's performance is measured by your startup's ability to create and launch new features. While it's great that your staff is capable of delivering, it only goes so far as to show how much value was brought to your startup.

What are outcomes?

The measurable results you want to observe once you've completed your outputs are known as outcomes. Outcomes are about providing actual, useful business outcomes, not about doing. If the marketing strategy is our output, the goal may be to increase incoming leads from hundreds to thousands and Scaleup, each time using a new marketing plan.

Your company objectives are referred to as outcomes. This is the change you want to see in your organization and/or existing and/or new consumers' habits. Many teams are so focused on improving a product by adding new features that they ignore its true worth to customers. This helps to understand why so many of them never become a Scaleup.

Outcomes vs Outputs

Although there is a small distinction between the two words, they have the same meaning in the OKR methodology.

Let's focus on some major differences between outcomes and outputs:

  • Output measurements describe what you made or the services you provided. Outcome measurements, on the other hand, are a better indicator of meaningful outcomes or the value we create. 
  • Outcomes are the short-term impacts of an output, whereas outputs are the items and services that arise from development intervention.
  • Outputs are mostly quantitative, with statistics available to show whether these have been delivered or not. Because outcomes are both qualitative and quantitative, they are more difficult to verify.
  • Output measurements don't take into account the value or influence of your services on internal or external stakeholders. Outcomes are a better method to measure the business success of your agile adoption since they better quantify real performance and analyze the success of the procedures we put in place.
  • Output is an activity or a completed project, document, or another item. It just demonstrates that something has been accomplished! The term "outcome" refers to a measurable result that allows you to determine whether or not what you performed had any business value. 
  • Outcomes are the assets that a company wants or needs to accomplish whereas the activities or objects that contribute to attaining a goal are referred to as outputs.

outputs vs outcomes
Outputs vs Outcomes. Image from Static.Weekdone

Conclusion

Startups must concentrate on the challenges that their target audience has and validate their solutions via research and testing. Many times, what appears to be trendy and apparent, isn't. The fact is that consumers have several issues, but not all of them are treated equally. Research and regular testing are the only ways to figure out which ones are most important. You should begin focusing on outcomes since they are what propels the firm ahead, inspires employees, and provides greater clarity for your employees. 

Because knowing is not the same as acting, few businesses are outcome-oriented. Focusing on outcomes rather than outputs requires a culture transformation, and if we don't want this move to backfire, we must first analyse our preconceptions.

Amit Khanna, 7startup Founder

Amit has 18 years of experience in the industry and an MBA. He supports entrepreneurs with every aspect of their business including concept and product development, investor presentations, and fundraising.



Tags: Startup funding, venture capital, scaleups, fundraising, pitch deck review, OKRs, why do startups fail, equity research, term sheets