Modern Management: Want Valuable Outcomes? Create Overarching Goals

Organizations create all kinds of goals: for revenue, for the number of new and retained customers, and when they can release products. Then they cascade the goals “down” to individuals. When we create these individual “goals,” we create outputs. Even when we work with others, those outputs often do not produce the desired outcomes. That's why we need overarching goals.

How can you create overarching goals? You might use OKRs, but I see organizations misuse them too often. Instead, I recommend answering these questions for the work you do:

Who will benefit from this outcome? (For example, customers, users, other people inside the organization.)
How will this outcome allow us to sustain or innovate our business? (Possibilities are: new products and services, improvements to older products, waste reduction for our users or us.)

Once you answer those strategic questions, you might find it easier to create outcome-based overarching goals.

Let's start with team-based overarching goals.

Each Team Needs a Single Goal

Everyone called the Replace team an “agile team.” As a cross-functional team, they used a well-known agile approach. But, every person on the team had their own unique goals. Worse, they didn't have a team goal. Everyone worked on two products: Replace and the previous product, Original.

Each developer reported to a different development manager, so the platform developer had a specific goal. So did the middleware and the app layer developers. Each developer had a goal that supported their manager (platform, middleware, and app layer managers).

The two testers reported to the same test manager, so they had goals that supported the test manager.

Yes, the product owner also had goals based on the product manager, but those goals were feature-based, not for the product as a whole.

Because each manager had their specific outcome-based goals, the managers didn't share a single goal.

The Replace team didn't make “enough” progress, according to the senior managers. So the managers hired Cindy, an agile project manager. On her first day with the team, Cindy gathered the entire team, including the product owner. She asked these questions:

What is the purpose of this release for this product?
How will we know when we're done?

No one knew the answers to those questions.

Cindy asked the team to continue what they were doing.

She learned that several months ago, the project portfolio management team decided to replace the Original product. That was the Replace team's job. However, the managers also had goals for Original. Their raises depended on changes to Original and releasing Replace.

No wonder the team didn't have an overarching goal. Even though the portfolio team understood the value of Replace, they hedged their bets with the managers' rewards—not separate projects. The managers' rewards skewed the work the team chose to do. (If you find yourself in this position, define specific goals for Replace and Original. I recommend two separate teams so each team can focus on their product's deliverables.)

Because the managers didn't share common goals, the people they led didn't have common goals. If you see that problem, the organization might have a bias to outputs, not outcomes.

The Difference Between Outputs and Outcomes

When we focus on outputs, we focus on activity or tasks, such as, “Work on this product.” When we focus on outcomes, we focus on the deliverables that create value for someone

An outcome-based goal might be, “Create a demo for a specific customer.” Or “Create a type of report.” If you're familiar with user stories, outcomes often look like a story or several stories.

If you have personal output-based goals, as in work on something, discuss your goals with your manager. You can create overarching goals.

If your team has output-based goals, work with the product people, and create overarching goals. Those goals might look like this:

Release a new version to attract this (new) kind of user.
Separate OlderProduct into two versions: Pro and Lite. Release both at the same time.

You might have to work with HR to change the managers' rewards so the managers can collaborate and not risk their salaries or bonuses.

I find outcome-based goals offer me plenty of internal incentive to start and finish. I hope you do, too.

Much of this is from Practical Ways to Lead an Innovative Organization. If you start at the project level, you might find the ideas in Manage It! and Create Your Successful Agile Project helpful, too. If you find these ideas challenge your organizational culture, I'll write about that after I finish the principles from the Modern Management Made Easy books.

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Johanna