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Outcomes Over Output: Why customer behavior is the key metric for business success Kindle Edition
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- ASIN : B07QJ1Y8Y5
- Publication date : April 8, 2019
- Language : English
- File size : 1038 KB
- Text-to-Speech : Enabled
- Enhanced typesetting : Enabled
- X-Ray : Enabled
- Word Wise : Enabled
- Print length : 79 pages
- Page numbers source ISBN : 1091173265
- Lending : Enabled
- Best Sellers Rank: #56,506 in Kindle Store (See Top 100 in Kindle Store)
- Customer Reviews:
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The focus is to deliver outcomes over features by delivering something of value to BOTH the customer and the business. In order to achieve those outcomes, one must experiment. By experiment, that means trying several scenarios and measuring the results and getting feedback to help determine which path to success to take. Once an outcome is defined, then the intent is to deliver continuously.
"Outcomes over Output" requires a change in thinking. At first the concept seemed easy to grasp but then I was not so sure as I read on. I really wanted more than this book could provide. On the negative side, there is a cursory mention of leading and lagging indicators, no index, and no glossary. However, there is still a lot packed into this tiny manual, so in this sense it is worth the purchase.
I had to re-read this several times before I got it and this text only touches the surface. I wish there were several simple case studies that I could sink my teeth into. I personally did not understand or find the only case study (on the HBR organization) useful. Nevertheless, this is the way I understood the concept being presented using a personal example of mine that I actually implemented over ten years ago.
MY SITUATION (a.k.a. case study)
I spent a tremendous amount of money over the years buying merchandise of both excellent and poor quality from Internet (e.g. Amazon, etc.) and local stores. I wanted to let others know what I felt was good and not so good and why, so posting an Amazon review became a forum for the products that I purchased. This was my way of enabling others to make informed purchase decisions, spend dollars wisely, and not lose money like I had so many times. I had a choice to either implement my reviews (let's call them features) via the old way of thinking (output-based) over the new way of thinking (outcome based) as outlined below. I actually did implement this the old way at the beginning but then changed my tactic when I wanted to achieve higher positive rankings which would indicate the customer found my review helpful. When a customer finds my review helpful, it is both valuable to them and valuable to me.
OLD WAY of thinking is Feature-based delivery:
- Develop features – Churn out a large number of features (in this example it would be reviews) by a certain date and time.
- Impact / Result – Is an accumulation of a large number customer reviews that people either find helpful or not which results in my ranking either moving up or down.
- Measurement of success – The number of completed reviews increases along with the potential to receive a positive ranking.
NEW WAY of thinking is Outcome-based delivery:
- Outcome – (Customer Outcome) Enable customers to make informed purchase decisions based on my product review by highlighting its features or lack thereof and my usability experience. (Business Outcome) If I achieved this outcome, they will voice their opinion by voting positively on my review and my rankings will increase.
- Impact – Is a change in ranking either up or down.
- Key Result – Increase in positive votes that results in an increased ranking.
- Measurement of success – Take a baseline of where the rankings are now after having implemented things the old way and get an idea of how fast the rankings move either up or down. Next track the increase in rankings by experimenting with the way the reviews are written and determine if the rankings increased more by delivering on the OUTCOME rather than being concerned about the OUTPUT.
- EXPERIMENT - How I achieved this increase is by re-reading all my reviews to identify which ones got the most positive votes and determine why that was. Basically I was trying to ascertain what type of review satisfied the customer and what type did not. What I found is that household / consumer product reviews were most likely to receive more votes, especially if they listed the features or lack thereof, the pitfalls, and my experience. Also, those reviews that were focused on “my” (as in I) experience rather than in what “you” the user should do or not do or like or not like, received favorable feedback. Once I changed the “you” or “you should” to “I” or “I did,” I got more votes almost immediately. This required making changes to almost every previous review and doing so over a period of about three months. However, the delivery was continuous in the sense that as each re-written review was posted, the customer usually was able to use that review to make or not make a purchase decision and was more likely to vote the review helpful.
In summary, the focus of this book is to help businesses understand that the goal is not to just get things out the door but to deliver value to the customer that then provides value to the business. The only way to do that is to focus on the outcome and experiment first to see which direction one should take. This book is definitely an excellent start. However, I feel I have to do a lot more reading so that it becomes second nature to me in order to be successful in driving business success via outcomes instead of output.
UPDATE --> I decided to create a slightly fictitious example of what focusing on outcomes over output for the Amazon Vine program might mean. Amazon Vine is an invitation-only program that provides "free" products to their most valuable reviewers in exchange for a review. By "free" it means the manufacturer supplies the product for free but the reviewer actually has to pay income taxes at the contractor rate on most of the products. I am a member of the Vine program, although this book I actually purchased via Amazon as it was not a Vine product.
Therefore, below is what Jeff Bezos might have been thinking of if focusing on outcomes over outputs and defining leading, lagging, and balancing indicators. He would also be experimenting as he starts the program.
OPPORTUNITY - The opportunity exists to increase customer purchases of new products by having buyers use Amazon reviews to evaluate those products prior to making their purchase decision. Customers spend a tremendous amount of money buying merchandise of both excellent and poor quality from Internet (e.g. Amazon, etc.). They want to know what other purchasers find valuable or not so valuable about a product and why. Posting an Amazon review is a forum for the many products people purchase. An informative review, enables customers to make informed purchase decisions, spend their dollars wisely, and not lose money. Therefore, we want to institute a new program that brings visibility to pre-released and just released products by allowing our top reviewers access to these products in exchange for an informative review. When a customer finds a review helpful, it is both valuable to them and valuable to the “business” in the form of increased review and product rankings, higher visibility, and increased sales.
PURPOSE - Our strategy is to sell more product and weed out substandard ones. Informative reviews assist the customer with making their purchasing decisions. This is linked to increasing sales to grow the business.
OUTCOME - We believe our Amazon site can be used to enable customers to make purchase decisions of pre-released or just-released products, which would increase sales and increase trust in our review system. We will know we have achieved this by increasing sales and increasing the helpful votes on Amazon Vine product reviews.
LEADING #1 - We will be measuring increased sales on similar products in our system against those offered in the Vine Program. For instance, our blow dryer sales are at 1M and typically we increase by 100,000 every QTR. We will be offering blow dryers on the Vine program and expect to increase sales by 150,000 every QTR as the reviews are posted because these products will achieve higher visibility as a result of numerous write-ups touting the products features.
LEADING #2 - We will be measuring increased review rankings for the Amazon Vine products to ensure higher positive rankings. Typically, reviewers get 75% positive votes indicating the review enabled the customer to make a purchase (or not to purchase) decision. With the Vine program reviewers, we expect reviews will get 80% positive votes to 20% negative votes which indicates these reviews are more helpful under this program.
LAGGING - Overall we expect Amazon sales will double yearly with the introduction of this program. Previously our sales were 100M and went to 110M after one year. We now expect 110M to go to 220M by next year.
BALANCING: We expect review quality will slightly increase and trust in our reviews will increase. We will measure this by ensuring sales does not slide and product and review quality increases or at least stays the same.
As an OKR coach, I would tweak the OKR example included in the book but, even so, I still recommend the book.
Before working with our clients, I ask them to take the short time it takes to read this book so that we’re both aligned on what we’re trying to do in their organization, and that they know in order to do that they must support experimental behavior (and failure!) to make their organization stronger and more cohesive.
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