Inputs versus Outcomes: Measure what Matters
Create better.
We all make decisions with incomplete information, and have to work within constraints. Thinking about how we might reframe our challenges and opportunities can unlock new insights, deliver exceptional results, and accelerate learning too.
Are we there yet?
This is the recurring question I’m asking everyone: my neighbors, team, newscasters on the tv, my social media network. Are we there yet? How much longer are we working in this holding pattern?
Like many professionals, we’re having daily conversations with clients and colleagues about our world right now, and the changes that are underway.
When will things get back to normal?
What will “normal” look like in the days ahead?
Will our organization still continue to serve the same purpose when we get through this?
What hard choices and trade-offs are we facing as we plot our best (okay) case, worst cases, and worst-worst case?
Those who are wrestling with forward-looking plans right now are asking basically the same question: what outcomes matter most?
Many leaders talk about being outcome-focused, but then seem to dive into the deep-end of process minutiae of how the work could be performed. It’s comforting to some to swim in the details, consider the many players, inputs, and processes that could be mixed together to bring an idea to life.
It’s often harder to design a very clear and tangible picture of the outcomes we seek, especially if we’ve not seen them or experienced them in the past. Doing new things is always an experiment, and isn’t guaranteed to go the way we planned.
The sad truth is, it’s much easier to plan, budget, and manage according to “the way we’ve always done things.” Big changes or transformations – achieving new outcomes – can be tough, requiring new skills and attitudes to imagine, adjust, adapt, and pivot as new information helps shape an evolving future .
Shifting Our Orientation from Input to Outcome
As many organizations are considering changes or adjustments to their business models to better serve their customers or patients, conversations are too often being framed in a way that limits the speed and quality of achieving desired results.
For example, if your managers were asked how much it costs to offer a new drive-by COVID testing service, how would they approach this? How would they calculate it? Most of us would start to pencil out and build up this new service based on how we’ve launched similar services in the past - considering potential billable services and reimbursements, fixed and variable costs, staffing requirements, overhead and physical space needs.
“If we could only expand our thinking, and reframe our basic approach to new ideas, we could open up a wealth of options that can achieve our desired outcomes.”
If we could only expand our thinking, and reframe our basic approach to new ideas, we could open up a wealth of options that can achieve our desired outcomes. If we could only imagine that a solution exists that could shortcut our investment of energy and resources, we might weigh our options more effectively as we seek to transform imagined concepts into tangible results.
But we often get in our own way, even before we get started.
We rarely start with the question of “what is the cost per test to offer ANY available, existing testing services as our drive-by service?” We have an inherent bias to assume that we can and must invent all new services and solutions here. In house.
It’s not that ideas are inherently limited, or that realization is impossible. The issue is that we too often frame new ideas and opportunities in ways that bias us to the least efficient approach.
The Implementer’s Dilemma: The ‘Sunk Cost’ x ‘Not Invented Here (NIH)’ Bias Equation
How we frame, describe, and entertain, and assign new challenges is a product of our organizational culture. It’s often implicit, but it’s as real as this device in your hand or on your desktop.
There are any number of reasons that sub-optimal decisions are made, but ultimately, many are born of past scarcity. At some point in our personal or professional past, we’ve had to make do with what we have. We’ve worked hard to deliver incredible results, doing what we could with what we had from where we were. Necessity is the mother of invention, right?
If this is the cultural mindset, and we’ve been recognized or rewarded for these efforts, why would we ever consider a problem that we didn’t tackle with our own team and in our own, original way?
“Many leaders naturally assume an implicit constraint that if a core competency or service is needed and they are accountable for delivery, they must create and administer the service themselves.”
We hire great people, right? And they’re already on the payroll, right? And some aren’t as busy as they could be, right? Imagine what else we could do with all this talent.
Many leaders naturally assume an implicit constraint that if a core competency or service is needed and they are accountable for delivery, they must create and administer the service themselves, and directly oversee the ongoing operations and staff performing the work.
This is the hazardous compounding of the ‘sunk cost’ bias when it bangs into the ‘not invented here (NIH)’ perspective.
“Sunk Cost” is a decision-making concept that over-weights the value of investments (and expenses) that have already been made. Already have a website that embarrasses you and doesn’t do what you need? Too bad, its already been paid for and, even if it drives away rather than attracts new customers; a new website will cost more than the bad one you already have. Sunk cost.
“Not Invented Here” is a mental bias to dismiss or reduce the value of research, ideas, or services that originate outside the organization (or local marketplace). A NIH-approach suggests that any good idea could be better if you or your team were to recreate it instead. Want to launch a recruitment campaign that repositions your organization as the ideal employer? Sounds great, how hard could that be to do? And, couldn’t we improve on the basic idea anyway? NIH in action.
When we’re evaluating new initiatives, or we’re challenged to pivot or implement new services, these concepts are at play and can skew our views.
If we have any extra energy, we should be able to do new things ourselves.
If we have office space and resources that could be reassigned to a new task, we should figure out how to do it ourselves.
If we can imagine new and exciting approaches to problems, why wouldn’t we just solve them ourselves?
Long-term Fix for Short-term Needs
This bad calculus gets more painful when the idea is more experimental or innovative. Leaders never know less about the value of an opportunity than when they first imagine it.
A “build it and they will come” mindset is expensive to pilot, because there is so much effort and cost to get it started. And while we can research, evaluate, review, and build a version of our own, our first effort (v-1) of most processes and services are a far cry from what we ultimately seek in terms of patient experience or quality.
If the new service or approach is long-lasting, we’ll refine and iterate on it. We’ll get it to where it needs to be. But what if this is an untried idea? What if we’re trying to experiment and find new ways of working or engaging those we serve?
“The hard truth is that while we may see a real need, we are rarely properly equipped or ready to solve it. Sometimes, we need to take a breath before taking action, and weigh our options .”
If our assumptions are wrong, we’ve invested heavily in the needed inputs to create and run a process that isn’t needed. Time and again, organizational experiments with new initiatives, services, or operating models fail because they’ve been conducted in the most rigid and expensive conditions available.
The hard truth is that while we may see a real need, we are rarely properly equipped or ready to solve it. Sometimes, we need to take a breath before taking action, and weigh our options .
The Secrets to More Effective Experimentation and Service Launches
What is the great secret that leaders know about innovation and experimentation?
Iterate. (Yes, you probably knew this already, didn’t you?)
When faced with limited information and attractive possibilities, your goal should be to run as many small experiments as possible to validate what you know, dispel the weak assumptions you might have, and confirm the outcomes you imagine.
As you weigh and prioritize changes for the near and mid-term futures, we offer a few simple considerations to help guide your execution.
Prioritize around “Why” and not “How.” WHY leads you to think about the end result, and why the new service, initiative, or campaign actually matters. WHY is about the outcome. HOW is about the mechanics and activities required to get there.
Reframe ideas as logic questions. While leaders often feel required to speak definitively, strategizing is the time engage collaboratively, invite discussion, and encourage pitching and responding to various ideas. Instead of making a statement, ask logic questions that invite conversation with your executive team or advisers.
Instead of stating “we need a new drive up testing service,” ask “why might we offer our community drive-up testing services?” or “what benefits might our community experience if we offer this new service?”
Start new ideas on a blank canvas. Particularly when the new concept is a departure from the norm, organizations are better served to give new ideas room to breathe without the overhead and politics of past results. Service firms are powerful partners in designing, running, and evaluating new service ideas: they are generally unencumbered by your history, are solely focused on the experiment, and should have some direct experience with the type of experiment you want to run.
All organizations will learn more quickly with an experienced guide to help point out the details that matter, and explain why they do or don’t have a bearing on your objectives. Keeping new ideas segmented also means they are easy to spin up, and easy to wind down if new information and insights reveal that the outcome won’t meet your expectations.
Be prepared to “kill your darlings.” This phrase, familiar among writers and creatives, means that we should simply acknowledge that not all our favorite ideas will make the final cut. While we may fall in love with an idea, an opportunity, or a new solution, we also need to recognize that timing and context matters. Today’s exciting idea can be tomorrow’s heartache. The more we can learn about the outcomes we derive from our actions, the better we can adjust and tune the offers we make available.
The simple answer is: we’re not there yet. But if we draw insights and embrace discoveries along the way, we’ll be happier and more successful when we arrive.