Results and Outcomes – Why Companies Fail
Results = Results
Apple, Google, and Amazon don’t exist based on a Utopian promise of what is to come – though certainly those promises keep their customers engaged and hopeful for the future. These companies exist because of the value they have delivered to date and created expectations for us as consumers for a consistent result.
I’m amazed at how simple of a concept Results = Results is – yet constantly we see companies struggle with the concept and we see it as a recurring theme in our 2-3 day workshops with our clients and something we look for in our technical due diligence reviews.
As a corporate survivor of 18 years, looking back I can see where I was distracted by day-today meetings, firefighting, and getting hijacked by initiatives that seemed urgent to some senior leader somewhere – but were not really all that important.
Suddenly the quarter or half was over and it was time to do a self-evaluation and realize all the effort, all the stress, all the work, wasn’t getting the desired results I’d committed to earlier in the year and I’d have to quickly shuffle and focus on getting stuff done.
While keeping the lights on is important, it diminishes in importance when to do so is at the expense of innovating and adding value to our customers – not just struggling to maintain the status quo.
Outcomes and Key Results (OKRs)
Adapted from John Doerr’s “Objectives” and key results – at AKF we find it more to the point to focus on “outcomes.” Objectives (definition: a thing aimed at or sought) are a path where as “outcomes” are a destination that is clearly defined to know you have arrived.
Outcomes are the only things that matter to our customers. Hearing about a desired Utopian state is great and may excite customers to stick around for awhile and put up with current limitations or lack of functionality – but being able to clearly define that you have delivered an outcome and the value to your customers is money in the bank and puts us ahead of our competition.
Yet the majority of our clients have teams who are so focused on cost-cutting for many years that they leave a wide open berth for young startups and their competition to move in and start delivering better outcomes for the customer.
How to Focus on Results and Outcomes
It is easy to become distracted in the day-to-day meetings, incident escalations, post mortems, ect. As an outside third party, however, it is blatantly obvious to us usually within the first hour of meeting with a new team whether or not they are properly focused.
Here are some of the common themes and questions to ask:
- Is there effective monitoring to discover issues before our customers do?
- Do we monitor business metrics and weigh the success (and failure) of initiatives based not on pushing out a new platform or product but whether or not there was significant ROI?
- How much time is spent limping along to keep a legacy application up and running vs. innovating?
- Do we continually push off hardware/software upgrades until we are held hostage by compliance and/or end-of-life serviceability by the vendor?
Hopefully the common theme here is obvious – what is the customer experience and how focused are we on them vs internal castle building or day-to-day distractions?
Recently in a team interview the IT “keep the lights on” team told us they were working to be strategic and innovative by hiring new interns. While the younger generations are definitely less prone to accepting the status quo, the older generation are conceding that they don’t want to be part of the future. And unfortunately they may not be sooner than planned if they don’t grasp their role in driving innovation and the importance of applying their institutional knowledge.
Not focusing on customer/shareholder related outcomes means that shareholders and customers are negatively impacted. Here are a few problems with the associated outcomes I’ve seen in my short tenure with AKF and previously as a corporate crusader:
Monolithic applications to save costs: Why organizations do it? Short term cost savings focus development on one application. Allows teams to only focus on development of their one area.
- One failure means everyone fails.
- Organizations are unable to scale vis-a-vis Conway’s Law (organizations which design systems are constrained to produce designs which are copies of the communication structures of these organizations).
- Often the teams who develop the monolith don’t have to support it, so they don’t understand why it is a problem.
- Teams become very focused on solving the problems caused by the monolith just long enough to get it back up and running but fail to see the long-term recurrent loss to the business and wasted hours that could have been spent on innovating new products and services.
- Catastrophic failure - Intuit pre SaaS, early renditions of iTunes and annual outages when everyone tried to redeem gift cards Christmas morning, early days of eBay, stay tuned, many more yet to come.
Ongoing cost cutting to “make the quarter.”
- MIssed tech refresh results in machines and operating systems no longer supported and vulnerable to external attacks.
- Teams become hyper focused on shutting down additional spending, but never take the time to calculate how much wasted effort is spent on keeping the lights on for aging systems with a declining market share or slowed new customer adoption rate.
- Start saying no to the customer based on cost opening the door for new upstarts and the competition to take away market share.
Focusing efforts on Sales Department’s latest contract.
- Too much investment in legacy applications instead of innovating new products.
- “A-team” developers become firefighters to keep customers happy.
- Sales team creates moral hazards for development teams (i.e. “I smoke, but you get lung cancer” - teams create problems for other teams to fix instead of owning the end-to-end lifecycle of a product)
Focus is on mergers and acquisitions instead of core strengths and products.
- Distracted organizations give way for upstarts and competition.
- Become okay or maybe even good at a lot of things but not great at one or two things.
- Company culture becomes very fragmented and silos create red tape that slows or stifles innovation.
Results = Results. And nothing else equals results.
If OKRs are not measuring the results needed to compete and win, then teams are wasting a lot of effort, time, and money and the competition is getting a free pass to innovate and outperform your ability to delight and please your customers.
Need an outside view of your organization to help drive better results and outcomes? Contact us!
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