When you consider that a good strategy has to act as a communication tool, one that is understood by all those involved in its direction, management and delivery, the fact that some of the language of strategy can be somewhat confusing seems contradictory.
At Cowan Global, our advice is generally to use plain English, to think about the language used by those to whom you wish to communicate and therefore be understood by. Simplifying the name of something does not alter its function but by making it easier to understand can vastly improve the chances of strategy becoming successful strategy.
Of course, if others are using these confusing words and expecting you to understand, you need a definition.
This confusion applies to the distinction between ‘Outcomes’ and ‘Outputs’. Here is our explanation of their meaning along with some more ‘user-friendly’ terms for applying them.
I will begin by confessing to having made an assumption in the title of this article; I have assumed that you know what an Objective is. So perhaps the best place to start is with some definitions:
An Objective is what you are aiming to achieve.
An Output is what you actually deliver.
An Outcome is what you gain from your output.
In general, if you can see it, feel it or move it about, it is an output. If it is a level of performance or achievement it is an outcome.
On a practical level in business outcomes generally come down to one of two things; increased revenue or reduced overheads however how the business goes about achieving and measuring these will vary greatly.
In simple terms that company might seek the outcome of increasing revenue via the objective of implementing an online sales site, the establishing of which will be the output.
In real terms it is rarely that simple. That same company might have recognised that satisfied, motivated staff have a positive impact on production and sales and will therefore seek to achieve the objective of improved staff satisfaction. This objective will need to be broken down into a series of processes (outputs) in order to deliver it including (e.g.) staff appraisal, reward and recognition, benefits provision, etc. The improvement of staff satisfaction can then be measured (the outcome) against (e.g.) the number of staff achieving set standards on the reward and recognition programme.
Outside the business sector outcomes may be more diverse than those attached to commerce although it is worth bearing in mind that the two given (increased revenue and reduced overheads) will impact positively in all sectors.
A non-business sector example might be the objective of both past and present governments of getting more people physically active. The output might be people taking up sport and the outcome would be how many more people take up which sports. It could, of course, be argued that in fact even this example comes back to the two business outcomes in that more people being physically active should have a positive impact on UK plc’s bottom line, e.g. in savings for the NHS.
To return to where we began, what impact does knowing your outcomes from your outputs have on the successful delivery of strategy? As long as you know what you want to achieve, what it should look like and how you should gain from it, the terminology is nice to know not need to know.
Strategy is (or should be) about how you go about achieving your vision, a plan for achieving one’s goal. The better that strategy is communicated, the easier it is for all involved to understand, the higher the likelihood of success. Understanding the terminology is important on an academic level but in the real world success is measured by what you achieve and communication by what is understood.
Perhaps I should have titled this article ‘knowing what it is you want to achieve, what it looks like and how you will know when you’ve arrived’ for in understanding that we can design strategy which has far higher chances of becoming successful strategy.
© Jim Cowan, Cowan Global Limited, February 2012