Analytics

Activity, Output, and Outcome: What Is the Difference?

Measuring progress is not a way to find criticism or define business success. Business success is realization of the vision for your customers through your business. Any measuring framework is designed to advise on the health of the actions, processes, and the overall business. It is not the cure or medication. For example in healthcare industry, all of the modern technology is geared to produce the same result that doctors in prior centuries did – prescribed the right drug so the patient lives and/or has a better quality of life. Measuring anything is to find if your hypothesis on realizing the vision is on track or needs modifications. Execution is the medicine but it has to prescribed correctly.

Activity & Output

When measuring, just like in writing a resume, you should concentrate on the outcomes not activity or output. Concentrate on the outcomes you really want. The classic business thought is “activities are basic units of competitive advantage. Overall advantage or disadvantage results from all company’s activities, not only a few” (Michael Porter, Harvard Business Review, Nov-Dec 1996, Website). Analysis paralysis could set in if a business owner creates KPIs for every activity. As my coach told me, any measurement should be a few but distinct. I should not use measures like a drunk men using lamp post – for support not illumination. Here is an example of improper measurements from Anthony Iannarino (thesalesblog.com, 2012, Website) :

Sales managers should have no interest in requiring or measuring the number of cold calls a salesperson makes. It’s irrelevant. The measurement of calls is only useful in determining whether a new salesperson has an efficiency problem (like too little activity) or an effectiveness problem (like the need for more training). But beyond that, the raw number of calls tells you nothing about how the salesperson is doing. The calls are activity, not outcomes. A salesperson can succeed at making the number of required calls and still not succeed in their job.

As a leader, you should also look for the distinction between output and outcomes. Outcomes are the difference made by the outputs (Deborah Mills-Scofield, HBR.com, 2012, Website). Output includes revenue and profit. I would classify the unique selling proposition as an output. Every business should be judged not by its answers but by its question. The output or “the what” of firm should be seen in the context of “the big WHY” – the relationships and the consistent user experience maintained over time.

Outcome

Outcome measures the change that has occurred as the result of your product or service. The underlying assumption of all marketing strategy is the willingness of consumer to pay for the goods. From my experience, a customer need to build a sense of safety with a product or information before they can have trust in the company. Below is a list of suggested questions you should be able to answer with your outcome

  • Are the outcomes related to the “core business” of your organization or program?
  • Is it within your control to influence these outcomes?
  • Are your outcomes realistic and attainable? Are your outcomes achievable within funding and reporting periods?
  • Have you moved beyond client satisfaction in your outcomes?
  • Is there a logical sequence among your short-term, intermediate, and long-term outcomes?
  • Are there any big “leaps” in your outcomes, i.e., gaps in the progression of impacts?

(Strengtheningnonprofits)

Generally speaking, there are five different types of outcome you can adopt – financial (for the clients), behavioral, attitudinal (ex. Express delight with the new product), technical (ex. faster page load), and experiential (ex. customers receive more consistent and accurate information when they need it) (inspired from Jill Purse, ThoughtFarmer, 2014, Website).

Review of Definitions

  • Activity – Any activity that is engaged in for the primary purpose of making a profit.
    • Note: Managing activity is a morale killer (Jim Keenan, asalesguy.com, 2012, Website)
  • Output – The direct and measurable products of a program’s activities or services, often expressed in terms of units (hours, number of people or completed actions); typically designated as the accomplishment or product of the activity (University of Wisconsin-Extention)); enables business to find outcomes: important products, services, profits, and revenues.
  • Outcome – Create meanings, relationships; answers, “What difference does output/activity make?”; user experience.
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Analytics

Signs That Your Vendor Might Not Be Right Fit for You

“Error is feature until you discover it”

The following is just a short list of my experience with vendors. There is no particular order (just like the poor vendor).

  • Move dates of major deliverables
  • The vendor says, “This is harder than we expected”, repeatedly. Uses that as excuse to not deliver a promised task.
  • Does not do what is assigned
  • No or nominal innovative, new, or exciting ideas proposed by the vendor
    • No thought leadership
    • Look to your team to create new innovation for them (“you pay for their improvements/innovation” without giving your company any IP or stake)
    • Present that innovation as their and present it to your competitors
    • Uses jargon or big words without specificity
  • You require daily meeting to assess the progress of every project step
  • Requirements documents
    • Provide too broad of description
    • Jump into specification of what they are going to do
    • Not have requirements document
  • Rely on your team and your other vendors to provide insights into the data even after months working with internal stakeholders
  • Duckspeak – much words are used by your vendors to described the project or their risk but you are still unclear what is the status of the project
  • Constant change of workers and leaders involved in your project
    • Sudden and unexplained departure of key project players on the vendor side
    • No warning or knowledge transfers
  • Consistently change the pricing model between each presentation deck
    • Produce ever increasing
  • Minimum connection between the sales presentation and the deliverable
  • No concrete discussion and commitment for the post-implementation support for the data, data infrastructure
  • End user administration is either confusing or relies too heavily on your team
    • No thought out process
    • No thought out support process
  • Constant need to supply password as there are several different technologies build one on top of the other
  • Unable to improve customer experience
  • Didn’t account for validation period in the project plan (ie time after the project/process completes and before it is released for general consumption)
  • Vendor argues with the company that hired them
  • Charges you for the work that they did not finish
  • Budget is not itemized
  • Require constant supervision of projects and/or tasks. As soon as you woke away, the tasks are not done
  • Prioritizing other projects given to them over your projects
  • Tries to sell what they developed at your company to your competitors
  • Below standard maintenance agreements.
    • Maintenance agreement is not discussed at the start of the project/program
  • Key players take extraordinary amount days off before key deliverables deadlines
  • Program manager acts as project manager
    • Program manager works on other projects that not tied to your program or (even) company
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