Feb 5, 2023
Outcomes vs Outputs: What is the Difference?
Outputs vs. Outcomes - A Crucial Difference for Product Teams
If you work in product, you're probably familiar with the terms "outputs" and "outcomes." But what is the difference between the two? While they may sound similar, outputs and outcomes are fundamentally different, and it's crucial for product teams to understand this difference in order to achieve success.
In this article, we'll explain the difference between outputs and outcomes, why it's important to distinguish between them, and what product teams can do to become more outcome-driven.
What are Outputs and Outcomes and how do they differ?
Let's start with definitions. What are outputs? Outputs refer to the tangible deliverables of a product or project. These are the things you create and produce, such as a new feature, a redesigned interface, or a marketing campaign. Outputs are usually easy to measure and quantify. Outputs are tangible, which is why it is very natural and easy to focus on them.
What is an outcome? Outcomes refer to the changes or benefits that result from using the product or service you offer. Outcomes are what your users or customers ultimately care about, which is why they are more closely tied to the goals you are trying to reach as a team and business. Unlike Outputs, outcomes are often intangible and harder to measure than outputs, which is why they are often overlooked in the product decision making process.
To put it simply, outputs are what you produce, and outcomes are what you achieve.
Outputs vs Outcomes examples
Let's take a look at some examples of product outputs and product outcomes to make this distinction clearer.
Examples of Product Outputs:
A new feature added to a mobile app
A redesign of a website's homepage
A promotional email campaign
Examples of Product Outcomes:
Increased user engagement with the mobile app
More people visit the homepage and signing up
More users buying after seeing an email promotion
As you can see, outputs are the deliverables that you create, while outcomes are the results that you achieve. For outcomes, it is best to avoid generic business metrics that you want to improve and rather formulate outcomes as a desired change in user behavior that you would like to achieve.
Why It's Important to Distinguish Outputs and Outcomes
Understanding the difference between outputs and outcomes is crucial for product teams, for a number of reasons
Strategic direction: First off, being conscious of your outcomes helps you focus on what matters most. When you're clear on the outcomes you want to achieve, you can focus your efforts on the things that will help you get there. You can prioritize the features and improvements that will have the biggest impact on your users or customers knowing the full context and strategic direction. Outcomes can serve as a talisman for prioritizing outputs.
Measuring success: Secondly, making a difference between outcomes and outputs actually helps you to measure success more effectively. Outputs are easy to measure, but they don't always tell you whether you're actually having real impact on your company’s wider goals. By considering your outcomes, you can measure success in terms of the changes or benefits you're delivering to your users and keep an eye on the bigger picture.
Faster decisions: Finally, looking at both outcomes and outputs makes decision-making easier. Oftentimes product teams are dealing with an overload of ideas. By tying outputs to outcomes, you can more quickly eliminate ideas that aren’t as relevant. When you're clear on the outcomes you want to achieve, you can make better decisions about what to build, how to build it, and how to prioritize your roadmap.
What Role Do Outputs and Outcomes Play in OKRs?
The idea of outcome-driven thinking was first popularized with the rise of OKRs (Objectives and Key Results). OKRs are a popular goal-setting framework used by many product teams as a key guiding factor in their strategy. The "Objective" is the desired outcome, and the "Key Results" are the outputs that will help you achieve that outcome.
For example, let's say your Objective is to create a mobile app that users engage with daily. Your Key Results will be the tangible, measurable goals you will aim to achieve in order to reach your Objective.These KRs might include:
Increase the user invites by 30%
Grow 90-day user retention to 80%
Increase the adoption of a certain feature by 25%
For each key result, teams usually identify initiatives that can help drive those results. Those initiatives are Outputs and can include products, features, services, tests, experiments and campaigns. . In this case of the Key Results mentioned above, the initiatives could look as follows:
Offer volume discounts on new users
Redesign the in-app onboarding experience to activate more users
Send automated product update emails to users
Ultimately, the goal is for the outputs to drive the outcome. An understanding of the outcome is key to defining and prioritizing the best output.
Why Product Teams Need to Be More Outcome-Driven
Many product teams still focus too much on outputs and tend to neglect thinking about outcomes. In the worst cases, success is calculated in terms of how many features have been shipped, how quickly or how many bugs have been fixed with little regard for the impact those outputs may or may not have on the user’s experience and behavior. In many cases, features are prioritized and built due to a vague perceived connection to the company’s goals, often based on gut feeling, stakeholder pressures, subject to limited validation and confirmation bias.
Building a product or feature is ultimately the most expensive and time consuming way to validate whether an idea works. And too often, teams find out that something works after the time and effort has been spent building it. A good product team’s goal should therefore always be to minimize the risk and maximize the confidence in what they are building. Understanding your customer’s problems and needs and clearly defining your outcomes is a crucial part in that. It should form the basis of all prioritization and decision making efforts.
In simple terms, to be successful in today's landscape, product teams need to be more outcome-driven. They need to focus on delivering value to their users and customers, not just on churning out features.
Here are a few tips for becoming more outcome-driven:
Start with the why: Before you start building anything, ask yourself why you're building it. What problem are you trying to solve? What outcome are you trying to achieve? Keep this in mind throughout the entire product discovery process.
Measure what matters: Don't just measure outputs, measure outcomes. Identify the key metrics that will tell you whether you're achieving your desired outcomes, and track them regularly.
Prioritize based on impact: When deciding what to build next, prioritize based on the impact each output will have on your desired outcomes. Focus on the outputs that will have the biggest impact first.
Iterate and learn: Being outcome-driven is an iterative process. You won't get it right the first time. Continuously test and learn, and use what you learn to improve your outcomes over time.
→ Use Reveall to define outcomes and link them to your outputs, connected with customer insights and product maps. Get a free trial here.
Impact Maps and Opportunity Solution Trees – Key Tools for Outcome-Driven Teams
Impact maps and opportunity solution trees are two great tools that can help product teams become more outcome-driven. They can help you connect the dots and focus your efforts one what will deliver the most value to your customers.
An impact map is a visual tool that helps you align your outputs with your desired outcomes. It starts with the desired outcome, then works backwards to identify the outputs (features, improvements, etc.) that will help you achieve that outcome. By using an impact map, you can get a high-level overview and see how each output contributes to the desired outcome, and prioritize outputs based on their impact.
Opportunity solution trees, on the other hand, help you identify and prioritize the opportunities that will have the biggest impact on your desired outcomes. They start with the desired outcome and work backwards to identify the opportunities that could help you achieve that outcome. By using an opportunity solution tree, you can identify the most promising opportunities and prioritize them based on their potential impact.
Both impact maps and opportunity solution trees help you focus on outcomes, not just outputs. They help you align your outputs with your desired outcomes, prioritize based on impact, and iterate and learn over time. By using these tools, you can become more outcome-driven and deliver more value to your users and customers.
Outputs and outcomes are two fundamentally different things, and if you’re part of a product team, it's crucial to understand and appreciate the difference. At its core, being more outcome-driven is all about shifting your mindset away from solutions and deliverables towards thinking about the user’s needs and the behaviors you want to influence.
Tools like impact maps and OSTs can be really helpful in shifting product teams’ focus more towards outcomes, enabling them to deliver more value to their users. Don’t just focus on what you're building, focus on why you're building it and the impact it will have.