The Crucial Balance Between an Outcome and Output Driven Organization: Guiding Your OKR Strategy

The goal of this article is to give you a guidance how to define your OKRs based on your organizational?strategy

In the dynamic world of business, the choice between an outcome-driven and output-driven approach isn't always black and white. In reality, most organizations find themselves navigating a spectrum between these two paradigms. While they may have a predominant leaning, it's the emphasis on one over the other that truly defines an organization's strategy for future growth.??

But before I start, let’s take a step back

What is an outcome or output driven organization??

Outcome-Driven Organization: an organization that places a primary focus on achieving broader, meaningful goals and creating significant impact. This approach centers on the idea that the ultimate purpose of any endeavor is to bring about positive, substantial, and often transformative changes in the organization, industry, or society. ?

Key Characteristics:

1. Emphasis on Results: set their sights on the results they want to achieve. They define success based on the tangible and often long-term impacts they make.?
2. Customer-Centric: prioritize understanding and meeting customer needs, ensuring that their products or services genuinely improve the lives of their customers.?
3. Innovation: encourage a culture of innovation, constantly seeking new ways to create value and solve problems in unique and meaningful ways.?
4. Long-Term View: take a strategic, long-term perspective, recognizing that lasting change often takes time and persistence.?
5. Flexibility: adaptable and willing to adjust their strategies and approaches to achieve desired outcomes, even in the face of challenges.?

Outcome-Driven Organization: an?organization that?focuses primarily on the tasks, processes, and deliverables it produces. It places a strong emphasis on efficiency, productivity, and meeting specific quantitative targets. ?

Key Characteristics:

1. Emphasis on task completion: prioritize completing tasks efficiently and meeting predefined milestones or quotas.?
2. Performance Metrics: measure success by specific quantitative metrics, such as the number of units produced, tasks completed, or projects delivered on time.?
3. Short-Term Focus: tend to have a more short-term perspective, concentrating on immediate and tangible outputs rather than long-term impact.?
4. Process-Oriented: have well-defined processes and workflows in place to ensure that tasks are executed consistently and efficiently.?
5. Risk-Averse: more risk-averse, as they prioritize achieving predictable results and meeting established targets.?

How do both proactive and reactive approaches impact the definition of their Objectives and Key Results (OKRs)?

Imagine you are the CEO of a BiB Software Solutions company operating on a SaaS subscription model. You are currently in the process of formulating your strategic plan for the upcoming year. Your primary objective as CEO is to consistently increase revenue year over year, and your challenge is to devise a strategy to achieve this goal.

In this scenario, you've identified that one of the major obstacles hindering revenue growth is inefficiency within the organization, leading to low productivity.

As a result, one of the key pillars of your strategy is:

-> Objective: Boosting Output and Efficiency in Bibliographic Software Delivery

Now, let's delve into the rationale behind this objective: Why should we strive to improve output and efficiency?

The response lies in our overarching goal: to augment the number of users subscribing to our bibliographic software by an impressive 25% in the upcoming fiscal year.

-> This objective is not just a goal; it's also the answer to our question.

The subsequent query becomes: What specific accomplishments are essential to realize this 25% increase in user subscriptions?

These accomplishments are our Key Results, and they include:

1. Achieve a monthly subscription growth rate of 2.5%.?
2. Reduce the average response time for customer support queries to under 30 minutes.?
3. Increase the efficiency of software updates and bug fixes, aiming for a 90% reduction in downtime.?
4. Launch two new features based on customer feedback to improve user satisfaction?

These company-wide OKRs require alignment and commitment from the entire organization. This implies that departmental strategies must contribute to the achievement of the company's OKRs.

For instance, some examples of these departmental strategies could include:

1. Marketing: Invest in marketing campaigns targeting libraries, academic institutions, and researchers to increase brand visibility and attract new subscribers.?
2. Customer Support: Enhance the customer support team's training and resources to handle inquiries more efficiently.?
3. Product Management: Implement automated software deployment tools to streamline updates and reduce downtime during maintenance.?
4. Product Management: Gather and analyze user feedback to identify areas for feature improvement and prioritize development accordingly.?
5. Marketing: Collaborate with industry influencers and thought leaders to promote the software's benefits and reach a wider audience.?

Measurement and Evaluation:?

• Monthly subscriber growth rate and total subscriber count.?
• Customer support response time tracked through ticketing system data.?
• Downtime reports during software updates and maintenance.?
• User satisfaction surveys and feedback collection.?

As you can see, this strategy is heavily focused on achieving specific output-related goals, such as increasing the subscriber base, reducing customer support response times, minimizing software downtime, and introducing new features. The success of the company is measured primarily by quantitative results tied to productivity, efficiency, and subscription growth.?

Rationale: In an output-driven approach, the company prioritizes efficiency in customer support, timely software updates, and continuous subscription growth to meet the immediate demands of its target audience. By concentrating on these output-driven key results, Bib Software Solutions aims to drive short-term productivity gains and enhance the software's competitiveness in the market.?

Let's illustrate this with a practical example for an outcome driven approach

Example of the same CEO as mentioned above but with a proactive approach.

CEO Strategy: achieving impact and innovation in B2B Bibliographic Software?

Objective: to become the leading provider of bibliographic software for academic institutions by consistently delivering innovative solutions that improve research quality and the scholarly experience.?

Key Results:?

1. Increase the adoption rate of our bibliographic software among academic institutions by 30% within the next fiscal year.?
2. Enhance the research quality of our clients by collaborating with them to publish at least three research papers highlighting the positive impact of our software on scholarly work.?
3. Achieve a 98% customer satisfaction rate through personalized customer support, training programs, and continuous feedback collection.?
4. Launch two groundbreaking features in our bibliographic software to better serve the evolving needs of academic institutions.?

Tactics:

1. Marketing: Develop targeted marketing campaigns tailored to academic institutions, highlighting the potential impact of our software on research quality.?
2. Marketing: Collaborate closely with academic institutions to conduct research studies on how our software positively influences scholarly work.?
3. Customer Success: Establish a dedicated customer success team to provide personalized support, training, and gather feedback for continuous improvement.?
4. Product Management: Create an innovation lab within the company to foster the development of groundbreaking features based on academic feedback and emerging industry trends.?
5. Marketing: Implement a proactive approach to user education, including webinars, workshops, and training resources.?

Measurement and Evaluation:?

• The adoption rate of our bibliographic software and the total number of academic institutions using it.?
• Research papers and studies conducted in collaboration with academic partners highlighting the impact of our software.?
• Customer satisfaction surveys tracking client feedback and satisfaction rates.?
• Timelines and adoption rates for newly launched software features.?

Focus: This strategy is strongly focused on achieving meaningful outcomes, such as increasing adoption among academic institutions, improving research quality, ensuring high customer satisfaction, and delivering innovative features that benefit scholarly work.?

Rationale: In an outcome-driven approach, the company prioritizes the meaningful impact it can make on its clients' academic and research endeavors. By concentrating on these outcome-driven key results, InspireBib Solutions aims to drive long-term value, innovation, and customer satisfaction while becoming a trusted partner for academic institutions in the field of bibliographic software.?

In conclusion, the choice between an outcome-driven or output-driven approach is a strategic decision that shapes the very core of your organization's success. While it's not about choosing one over the other, but rather recognizing which should lead the way, it's important to strike the right balance. As a CEO, navigating this spectrum is crucial in achieving meaningful results and staying agile in an ever-evolving business landscape.

->> If you have further questions or seek guidance on how to navigate this strategic choice, feel free to contact me. Your unique journey towards achieving your organization's goals is just one conversation away.