This week I read the book ‘Outcomes over Output’.
This book was recommended to me after an exchange with a client about data analysis methods. We talked at length about the math rather than the value acting now would realise for their investor.
This example will probably resonate with you when working with portco tech leaders on value creation initiatives.
‘There’s usually uncertainty when we’re trying to generate outcomes. Will the output create the outcome? Will the outcome contribute to the impact? We often don’t know — there’s no data, or the data we have is inconclusive.
If we don’t have the data to support our hunches, then we have to treat the ideas differently than if we know our ideas are true. We have to treat them as assumptions….…we believe that if people share pictures of our t-shirts (online) at a greater rate, it will prompt existing customers to return to our site at a greater rate.
We’ll know we’re right when we see a correlation between social shares and return visits’
Seiden, J. (2019), Outcomes over Output, P.26.
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Do you find yourself sitting down with your portco tech teams and feeling frustrated by uncertainty, risk aversion, the desire to do just good enough?
These could all be signs your tech teams are focused on the output rather than the outcome.
For example, risk reduction is the most commonly used tech value creation lever. These are 3 common examples of risk reduction:
- Migrating from legacy tech platforms.
- Reducing reliance on hardware/software suppliers
- Resolving critical technology bottlenecks
Most tech teams when asked the value of taking action are unable to articulate the benefit of these initiatives in financial terms.
They focus solely on the output and not what it would enable them to do, the outcome, the value.
What if you knew you were spending 5x more time maintaining legacy systems than you were building new products? Or you were the only customer of a software supplier’s bespoke 25yr old system. Or tech scaling issues meant you couldn’t meet peak sales volumes on the biggest shopping days of the year?
If you can measure it, then you can put a value on it. There is no excuse for not being able to put a $ value on making technology change.
Until next time.
Thomas
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