Outcome-Based Performance Management

Outcome-Based Performance Management

It’s important for businesses to be able to track and monitor their performance. Usually, a strategic roadmap is drawn up before executing on a goal or objective, and this can give teams some rough parameters on what to look for during the course of the process. Outcome-based performance management, by contrast, centers around the end result. It looks at how well vendors are able to meet the needs of their buyers—in other words, how a company’s product or service fulfills the needs of their clients. Understanding the outcome-based management definition is crucial to understanding the importance of focusing on outcomes rather than just looking at the performance process itself.

This focus on outcomes has a number of benefits. First and foremost, it enables businesses to look back and assess their performance. It can show them what things went well, and what could be improved upon. Outcome-based management also allows vendors and buyers to engage in open dialogue around what things might be done differently later on. This is why more businesses have started to adopt an outcome-based performance approach to their work. Rather than simply focusing on the steps and processes necessary to get them to the final outcome, they’re looking at what that outcome actually means for their clients.

The outcome-focused meaning is ultimately to help businesses gauge success in a way that’s actionable and measurable. Putting the emphasis on outcome is a great way to track progress over time and help you see where things are heading—or should head—in the future.

For this reason, focusing on outcomes is vital to the success of your business and helping your clients achieve their desired goals. MetaCX helps businesses implement outcome-based performance tools and metrics, aligning suppliers and buyers on expected outcomes and measuring value delivery over time.

Business Management Styles

There are multiple different management styles companies use to manage their business relationships. Outcome-based performance management is just one of them. Management theorists have come up with a list of management theories that each provide insight and guidance into various management practices.

Modern management theory states that workers are motivated by numerous factors, including happiness, purpose, and desired lifestyle. This theory emphasizes the need for managers to understand their workers and strive to create a work environment in which they can truly thrive.

The contingency management theory is similar to the modern management theory in that it recognizes each worker and each workplace is different. This approach is based on the premise that an organization’s management style should be dependent or contingent on the situation at hand—essentially, no two employees or companies are alike, and thus should be managed according to their unique needs and goals.

Finally, the scientific management theory holds that productivity is the best way to boost an organization’s success. It aims to streamline and simplify work processes in order to make them as efficient as possible and achieve maximum profit. While this management method has largely become obsolete, its remnants are still widely seen in the workforce today.

Focus on Outcomes, Not Outputs

The terms “outcomes” and “outputs” are often used interchangeably, but there is a key difference between the two. So, what’s the difference between output vs outcome? What about outcome vs output agile processes?

Outputs are the actions you take to achieve the goal. whereas outcomes are what a business ultimately hopes to achieve at the end of the process. When creating action plan, many organizations focus on their key output, meaning what they will do. For example, an output is to create a responsive customer service system.

While outputs are important, businesses should focus on the bigger picture, or the end outcome. Understanding output vs. outcome indicators can help businesses get a better idea of where their organization is heading in terms of targeted goals.

Likewise, by focusing on outcomes, not outputs, you will be able to see things from a broader perspective. It’s easy to get wrapped up in the small details while neglecting the overall trajectory of the project or goal in question. Maintaining an output-focused view is the better option for this reason. When determining output vs. outcome, it’s important to keep your desired end goal in mind. What does your ideal final product look like? Focus on outcomes, not outputs, and your business will have an easier time determining the answer to this question.

For a more thorough understanding of what is project outcomes and outputs, you might turn to an outputs vs. outcomes PDF or outcomes not outputs book. Here is one such example of a PDF file that explains the difference between these terms and how they can be implemented into business operations. Inputs, activities, outputs, outcomes impact, and other factors play a role in helping organizations reach their goals, but they should first understand what each does. In addition, outcome vs. output agile measures can aid in the collaborative efforts of self-organizing and cross-functional teams as they work to find solutions to an ever-changing digital climate.

The difference between outcomes and outputs isn’t always clear, and it can be tricky trying to discern the two if you are not used to thinking in terms of end results versus steps in a process. However, focusing on outcomes can help your business improve its processes overall.

Prioritize Outcomes, Not Processes

Along the same lines of the outcomes vs. outputs idea, businesses should focus on outcomes not processes. Of course, having a solid process or strategy in place is essential to actually achieving that end result, but once you’ve got that piece figured out, you should redirect your attention to the desired goal. Keeping an outcome-focused vs. process-focused view can help you tune out the less significant details and focus on what really matters, which is the end outcome.

If you can just remember the “focus on the process, not the outcome” quote, you should be well on your way to hitting your most crucial targets. Some might say to focus on the process and the results will follow, but when the process has been cemented and optimized to your team’s objectives, you should set your sights on the end stages of the process and work to ensure that you have either met your outlined goal, or are taking the proper steps for success the next time around.

Building an Outcome-Based Management Framework

Having an outcome-based management framework to follow can make your business processes easier. But first let’s back up a bit. What is outcome-based approach? As the term implies, an outcome-based approach aims to help teams align their processes and devise a roadmap or framework within which they can focus their efforts to achieve a desired outcome.

Outcomes-based working has a ton of advantages, namely that focused outcomes can help keep teams centered around the overall purpose of a project. Instead of getting sidetracked by other matters of less importance, they can study the necessary tools and steps to get them to where they need to be at the end of the day. This focus on business outcomes can yield better results and, in turn, higher revenue. By outlining outcome-focused objectives, you can create a solid management framework and develop a result focus intervention if necessary.

This management framework created by MetaCX outlines five key steps for transforming the B2B customer lifecycle. Each of these levels details the process by which companies can get one step further to transform their customer lifecycle to an outcomes-based approach. This framework contains the following levels:

Level 1: Alignment

Level 2: Delivery

Level 3: Adoption

Level 4: Impact

Level 5: Performance

Coming up with an effective framework or strategy to suit your unique business needs can be challenging. MetaCX helps organizations operationalize and scale expected outcomes from business relationships in a collaborative, neutral, third-party space. Within the shared technology platform, partnering organizations are able to align on initiatives and desired outcomes, create mutual action plans, and establish evaluation measures on an ongoing basis. To track progress and impact, multidirectional data is captured, conceptualized, and turned into a real-time, comprehensive view of performance toward the achievement of outcomes and delivery of value.

Outcomes & Results-Focused Examples

There are plenty of results-focused examples you can look to for inspiration on how to implement similar measures into your own organization. Examples of output objectives span industries. For examples of outputs, or to see a measurable outputs example at play, you might consider looking at what another business in your industry has done and achieved success with. Outputs vs. outcomes examples are endless.

One outcome-focused example in the healthcare industry might be an IHS partnering with a pharmaceutical to lower the cost of care for diabetes patients by 18%. This helps answer the question what is outcome-focused care, as providers are working towards a specific outcome for patients. Similarly, a retailer partnering with a marketing automation provider could aim to increase conversion rates by 33%. Some companies may opt to achieve a certain outcome by a set date—for instance, a manufacturer partnering with an energy company to be carbon neutral by 2025.

Outcome-Based Leadership

What is OBE? An outcomes-based culture can only be attained through outcome-based leadership. If leaders are not on board, if they are still relying on outdated management practices, it will be difficult, if not impossible for the wider organization to achieve this shift in mindset.

But what is the outdated practices meaning, and what is meant by outcomes-based leadership? When we talk about outdated practices, we’re mainly referring to the systems and strategies that may have worked well in the past, but are no longer relevant to the current state of the workforce. The modern management theory, as discussed earlier, is an example of a more up-to-date, progressive lens through which to view management practices—this is in contrast to, say, the scientific management theory.

Outcomes-based leadership describes a leadership style that focuses on outcomes rather than micromanaging each detail of each process. This can help create a healthy outcome-based culture. Just as your business should have customer outcomes and employee outcomes, you should also develop culture outcomes.

The MetaCX platform can help your business get started by creating a strong outcome framework and aligning your teams and vendors. Our platform makes it easier than ever to collaborate during all stages of outcome-based performance management. This connection can help you achieve better outcomes across the board. Reach out to us today to learn more about our services.