Outcome vs Activity : Not Just for Entrepreneurs

Outcomes vs. Activity is an excellent post that I came across today. In that post Chris Michel talks about the importance of focusing on outcome rather than on the activities. An example from his life with military.com drives home the point.

How true, it's not just in running a company that one needs to know this but also in ones life. For your convenience I reproduce this post from FoundRead.

I am embarrassed to say that it took me 10 years to learn one of the most fundamental pillars of leadership: It is all about outcomes — and not activities. This business truth is simple and obvious, yet, extraordinarily powerful. Unfortunately, it remains strangely elusive for many founders, and most people.

I can hear you now, “Of course I knew that,” or “Not me … I’m all about the mission.”

Well, in my experience, I have found that most people tend to confuse activity with outcomes — and it is a breathtakingly expensive mistake. In a world of infinite choices, choosing which activities will occupy your day is likely to be your single greatest driver of effectiveness. Beyond picking the right objectives to pursue, you need to focus on the results, not just the means to that end.

Some people choose wisely and focus on high-impact activities that truly move the needle. Others, however, work the same number of hours without making clear progress toward measurable results. Focusing on what really matters is a difficult-to-achieve skill in our “attention deficit disorder” world. Successful leaders–and, therefore, successful founders–invest the time to clearly identify, prioritize, and communicate key goals. They then measure their success by real progress against those desired outcomes. By focusing on the end results, creative leaders can identify the shortcuts and often achieve those goals with less work.

As we talk about outcomes vs. activity, it is important to nail down the semantics. Outcomes, in this context, means a certain, generally measurable, end result — and one that matters a great deal. Activities, however, are a set of tactics that are used to achieve that outcome. Productivity might then be defined as the value of a certain outcome divided by the cost of the activities used to achieve it — simply put, the return on your investment (ROI).

If this is a bit confusing, that is good. Understanding this confusion is the first step to seeing how easily things can go terribly awry. Because many of us founders are so accomplishment driven, we tend to look at both activities and outcomes as accomplishments. While they both could be achievements, results should almost always be valued well ahead of tactics. A long day at the office often creates the illusion that we are creating value and driving the ball downfield. Ticking off tasks on your to-do list fills you with a sense of accomplishments but did you achieve the end goal? Many of the activities create some benefit, but is it making a tangible difference for the organization? Is it the most effective use of your time? Often, the answer is no and, unfortunately, few people are aware of it.

I learned this valuable lesson when I founded my first start-up, Military.com. In late 1999, we raised a good deal of venture capital, hired rapidly, and set to work at building the definitive portal for the 30 million members of the military community. In just a few short months, we had over 50 employees and were working non-stop on product development, marketing, hiring, brand strategy, user-testing, public relations – all the things a “dot-com darling” was supposed to do. The activity level could not have been higher.

As many of you know, the world came crashing down in the spring of 2000 when the bubble burst. The next two years were exceedingly difficult – layoffs, hurt feelings, and an overwhelming sense of foreboding that we would likely lose the company. In 2002, we were down to just four weeks of cash and about ten employees. It was during this most difficult period that we had little choice but to focus on absolutely the most critical element of corporate life support – cash flow from operations.

Against all odds, we were able to drive the company to profitability with less than two weeks of cash in the bank. And in that moment, I realized that our DNA had changed forever…and we would never again confuse outcomes with activities.

When forced to make difficult tradeoffs in an exceptionally constrained environment, good leaders focus only on those things that matter. *The pressurization of Military.com leadership forced me to choose only those activities that drove key outcomes: cash-flow, membership growth, and monetization. As I reflect over both those experiences, I realize that I had confused being busy — lots of activity — with accomplishing something of value. Today, Military.com has over 9 million members and has delivered double digit profit and revenue growth since those dark days in our history. In 2004, I sold the company to Monster Worldwide (Nasdaq: MNST).

Defending yourself against the myopia of task saturation requires a bit of planning. Defining key outcomes is the first step to getting back on the road to productivity and effectiveness. Are the results that we hope to achieve measurable and meaningful? Can we assign dates to deliveries? What are the key measures of success and an appropriate sampling rate? Successful practitioners focus on the goal despite the forest of tasks, distractions, and nice-to-do activities.

Once founders begin to assess their team against key measures, they are often surprised to see how quickly they can create a results-driven culture. In that kind of enlightened organization, it’s about ownership, trust, accountability — and not about hours worked.