Outcome Centricity: The next frontier for agile organizations (Part VI)

Note: This is Part VI of the series on Outcome Centricity, revolving around examples of outcome-centric organizations. You'll find the first part of the series?here, the second part?here, the third part?here, the fourth part here and the fifth part here.

In this post I'd like to share an overview of some specific outcome-centric practices and examples I have come across over the last months or so. A lot of these come from the excellent book The Ends Game, which I hereby wish to recommend to anyone interested in exploring some of these ideas in further detail (specifically from a pricing perspective).

Importantly, we're not just talking about your typical tech company or startup but about a wide variety of different organizations across different verticals, so I'm sure you'll find plenty of inspiration for your organization as well.

Without much further ado, let's dive right in:

Pearson

We will judge ourselves not by the products we make, but by their impact on learners.

Pearson is one of the most fascinating examples when it comes to outcome centricity. They've started their business transformation from selling educational materials to selling learning outcomes back in 2013 and have been publishing their efficacy audits ever since. Be sure to check them out.

Netflix

Netflix is known for its "No Rules" culture in which customer obsession plays an integral part. So you wouldn't be surprised to find customer outcome-driven strategy development. Look at the image below - 3/4 key strategies are customer outcome-oriented! (Alas, can't find the source right now, but it's their corporate strategy from a couple of years back).

Amazon

Similar to Netflix, Amazon's known for its customer obsession. Take this wonderful quote by Jeff Bezos, for example:

If you’re not watchful, the process can become the thing. The process becomes the proxy for the result you want. You stop looking at outcomes.

Importantly, these aren't just empty phrases. Amazon uses the customer effort score, arguably one of the most important customer outcome indicators, as one of its core measures. How many organizations do you know which claim to make it as easy as possible for their customers? Well, Amazon's not just claiming it - they're measuring it. Think customer performance indicators.

Valve

In case you don't know them: Valve Corporation is the company behind video games such as Half-Life and Counter-Strike. They have pushed open talent allocation further than most, as evidenced by their Handbook for New Employees. They're all about the talent-to-outcome principle - allocating talent in a way which maximizes customer outcomes:

You were not hired to fill a specific job description. You were hired to constantly be looking around for the most valuable work you could be doing...There’s no rule book for choosing a project or task at Valve. But it’s useful to answer questions like these: Of all the projects currently under way, what’s the most valuable thing I can be working on?Which project will have the highest direct impact on our customers?

Roche

The healthcare industry is arguably among the forefront when it comes to outcome-centric thinking and acting. Take, for example, Roche's Personalized Reimbursement Models, where reimbursement is driven by the actual value the therapy delivers to a patient (vs. simply charging for a pill).

Albert Bourla, the CEO of Pfizer, said a very similar thing in this recent HBR interview:

Throughout my career my focus has always been on the end users of our products, whether they are animals and their caregivers or general consumers, and I have encouraged the entire organization to adopt the same patient-first mentality, measuring outcomes by people (or animals) served rather than drugs sold."

Michelin & Google

Similar to Roche, some companies have started charging customers for the actual outcome the solution delivers to them. Michelin Solutions in the B2B space, for example, charges fleet managers only for miles driven, not the tires.

Likewise, Google's well known for its pay-per-click or even pay-per-sale pricing approach when it comes to SEA, previously unheard of in the media and advertising business. Given that search to this day constitutes the major cornerstorne of Google's revenue one may even venture so far as to say that outcome centricity is the secret sauce of Google's success in the marketplace...

As always, I'd love to hear your thoughts and feedback. And thanks Diane?for your support with this article!