Outcome-Based Management: What It Is, Why It Matters And How To Make It Happen

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Are you more focused on the desired outcomes for your businesses, or the processes that you feel are necessary to get there? This is an important question to consider whether managing your own employees or negotiating an outsourced relationship with a business partner.

While many business leaders would say that they care most about the outcome, their actions will often tell a different story. Direct control over the processes can be helpful for ensuring the correct outcomes in certain situations (like preparing a hamburger), but this can often backfire with higher-level tasks. This is especially true when outsourcing a key task or responsibility to an expert partner.

Businesses that adopt an outcome-based management approach become better poised to succeed in their partnerships — and in how they work with their own employees. But it isn’t always easy.

What Is Outcome-Based Management?

Jennifer Robinson, senior editor at Gallup, provides this valuable definition of outcome-based management: “Time and talent are precious resources. Leaders who adopt an outcome-based approach ensure that neither of these is wasted. This approach focuses people and teams on a concrete result, not the process required to achieve it. Leaders define outcomes and, along with managers, set parameters and guidelines. Employees, then, have a high degree of autonomy to use their own unique talents to reach goals their own way.”

This same mindset is equally applicable when working with outsourcing partners. A business and its supplier should agree on a desired outcome that is acceptable to both parties. They should also set some agreed-upon parameters (such as deadlines or budget).

In this case, however, the business should typically leave it up to the supplier to set their own guidelines for how they will perform the work. The supplier is the expert, so they should know how to best go about their assigned task.

Essentially, outcome-based management aims to eliminate micromanaging and instead foster a more collaborative work environment that prioritizes the end result.

Why You Should Use Outcome-Based Management

Successfully implementing outcome-base management creates an environment of trust, collaboration and autonomy. When businesses trust their employees and partners to find the best solutions for reaching the desired outcome, these groups are given the freedom to pursue these goals in the manner they find to be most effective.

The value of outcome-based management was immediately apparent during a recent conversation with Rick Jordan, founder and CEO of ReachOut Technology, a leading cyber security firm.

Jordan explained, “In cyber security, no two incidences are exactly alike. Whether it involves a ransomware attack, a server crash or some other urgent issue, the way to solve the problem can vary dramatically based on factors like the technology being used, the scope of the cyber failure and so on. You can’t assume that a one size fits all approach is going to work every time — even if the desired outcome is the same. By giving people the resources and autonomy they need, they can provide personalized and effective results to deal with any situation.”

Outcome-based management utilizes the knowledge and experience of employees and partners to find the right solution for the problems and opportunities they encounter within their realm of responsibility. This environment ultimately fosters innovation and engagement — and incentivizes performance and accountability. Everyone involved must take individual responsibility for doing their part to ensure the desired outcome is met.

Making the Change

In her Gallup article, Robinson noted that implementing an outcome-based management approach can be challenging, often requiring a shift in the company culture. Specifically, successfully implementing outcome-based management requires proper talent selection, applying employees’ talents to their specific responsibilities and successfully engaging employees.

When applied to an outsourced relationship, this could be construed as proper partner selection, ensuring that partners are outsourced tasks that are relevant to their talents and capabilities and developing a respectful, collaborative partnership.

Notably, another Gallup report finds that when individuals are given more independence and autonomy, their performance and engagement at work increases. At the same time, they become more sensitive to failure, meaning that they still need support from their managers when a challenging situation arises.

So, while outcome-focused management eliminates micromanagement, it doesn’t mean that management of an employee or partner disappears entirely. Rather, it changes the mindset these relationships are judged by.

An employee or partner is empowered to take on their responsibility in the way they find most effective. But when challenges occur, the manager is readily available to collaborate to find an effective solution to ensure the desired outcome can still be met.

Focus On Outcomes to Get the Results You Want

At the end of the day, the outcomes your business achieves from its partners and employees are what affect the bottom line. By focusing on the desired outcome and then giving others the autonomy to reach it in the way they find best, you can provide the autonomy and flexibility needed to increase intrinsic motivation and creativity.

And by maintaining a clear focus on the outcome, you can ensure that accountability doesn’t go out the window. If anything, you can strengthen accountability processes by emphasizing the results. When this happens, you’ll be far more likely to get the results you want.



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