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”:http://www.military.com/aboutus/aboutushome.htm. 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”:http://www.monsterworldwide.com/ (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.
As a startup this is a critical problem. since you have limited ressource to operate and anything that you do will impact your business.
This is the art of Boostrapping, knowing what to spend, when to spend and usually on what you should focus.
I would strongly advise you to do 2 things when you are in a bootstrap mode, growth and generate a flow of income. both of them are criticals for your business even if you have funding and you think you dont need revenue yet.}
That was a very useful article. I believe every one in their life should know this difference between outcome and activity. Most of the time we spend our energies on things that give no outcome and wonder what happened to all that time!!}
Absolutely amazing article. I have to admit, that I was skeptical at the beginning, but as I read through, I am now convinced. Thanks!}
It took me the same amount of time. I never had a problem on the technical side, however the business side eluded me for a long time. Outcomes is another word of execution. The key to both is a laser like focus on what matters most and invariably that boils down to either cash flow and or customers. The rest is activities.
Congratulations.
Peter}
Howzit.
Thats the truth isnt it. Sometimes i get so cuaght up making wonderful plans and designing logos that i get scraed to put the stuff up in the window. After all no one pays me for the work i didnt present and like the great Wayne gretsky said.. you miss 100% of the shots you dont take. Like everything else in the world, reuslts are what matter. but of course its important to properly define results and tie them to what matters, making money now.}
Chris,
Great post! As an entrepreneur and co-founder of a social network aggregator – ProfileLinker, I couldn’t agree with you more.
The following two statements were spot on and were reminiscent of the teachings from my MBA program at the Tuck School of Business at Dartmouth:
1) “It is all about outcomes — and not activities. This business truth is simple and obvious…Unfortunately, it remains strangely elusive for many founders…”
2) “The pressurization of Military.com leadership forced me to choose only those activities that drove key outcomes: cash-flow, membership growth, and monetization.”
As a company, I believe founders have to make it their mission from day one to create a results-driven culture. It begins at the top…and employees will ultimately follow their lead. Also, companies need to focus on the activities that will make it viable in the near / long term. To accomplish this the company must focus on its business model. The problem I find when speaking to many startups is that a viable business model is not defined outside of Google AdSense. Don’t get me wrong, many sites create revenue using contextually targeted ads, but there has to be more to monetization than AdSense. Thus, when trouble strikes, it is hard to execute on key outcomes that do not exist.
As a founder I am challenged every day to focus on tasks that will yield the greatest results and drive my company to its end goal. It is this pressure to succeed with limited resources that oftentimes create the necessary culture and laser focus seen in great companies. Again great post! Also, thanks to Om Malik for linking to it!
Craig Dixon
http://www.profilelinker.com/clp95}
Excellent read, an eye-opener of course. Beyond any doubt, that outcome is more important then the activities. Focus should be on the outcome and not on the activiites. However without the activity there can be no outcome. Of more importance is to identify the correct activity to be performed at the appropriate time with the desired result in order to obtain the desired outcome.
In the case of military.com the euphoria overtook the rationale of the activities which led to the drowning of the desired outcomes.}
Chris, it is amazing to read this today when we just did – exactly this – at blip.tv this week. I agree it is essential you set clear goals for a company and then tangible benchmarks at three-month (or so) increments so you can clearly guage how you’re doing. It’s motivating because (a) you know exactly where you need to get to and also because (b) this allows every single person at the company to see where they fit in in relation to the goals of the company. Thanks for a great piece and for the continued inspiration.}
Informative article Chris! Hind-sight is 20-20, and cut to the continuity of the one consistent vision (or not).}
Nice article Chris!
I’d say that the lessons you learned could be applied to lots of situations-not just for leaders/founders.
I particularly liked the closing comments that it’s not about the hours worked but ownership,trust and accountability.}
Although everyone jokes about work smarter and not harder, this is exactly what it means! Learning to prioritize is very hard, exceptionally hard.
Thanks Chris,
Your article was very timely and given your experience with Military.com, it spoke directly the key issue. A coach once told me that life is like a football game, rarely is it staying the same. It is either getting better or it is getting worse. Even if it is just a yard or two every day or every week. whether you are gaining or losing you are generating a result but one thing for sure, you better be paying attention. A little bit over time not measured will equate to a huge result either way.
I work with Traumatized Veterans and their immediate and extended families to help through the trials of homecoming. The only thing that matters are the outcomes. Are things getting better?. Are they drinking less, sleeping more, relating to their families better?
We are not professional visitors, either go big or go home.
John Henry
Founder
Veteranandfamilies.org
Outcomes vs. Activity http://t.co/3q8ZdBtQ #startups @entrepreneurs