Back in 2003, corporate leadership at Best Buy attempted something radical: They adopted what they called a “results-only work environment,” or ROWE. They gave corporate employees complete freedom over when, where, and how they worked — including the ability to skip meetings they deemed irrelevant or unnecessary. In exchange, they asked for one thing: results.
It was a 1:1 exchange of autonomy for accountability. If goals were met, no questions were asked, within reason. If goals weren’t met, then no amount of excuses or perceived “productivity” would stave off the consequences. It was extreme for the time, and still is in some ways, but it also worked: Not only did Best Buy’s experiment with ROWE empower workers to achieve more, it lowered voluntary turnover by as much as 90%, while productivity increased by more than 40%.
While Best Buy’s early ROWE model ultimately proved to be a little too autonomous — the retailer eventually abandoned the model for a more traditional workplace culture — they successfully demonstrated that outcome-driven teams with significant autonomy can lead to powerful increases in workplace satisfaction and productivity.
This case study may be 20 years old, but it’s more relevant now than ever before.
Why? Tech budgets across industries are largely stagnant, and leaders are being asked to do more with less. By shifting their focus from output to outcomes, they're much more likely to thread the needle without going over budget or losing more employees to burnout.
Outcome-Driven Teams versus Task-Driven Teams: What’s the Difference?
Gallup’s Jennifer Robison wrote that an outcome-based practice: “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.”
Say senior leadership at your organization has set a primary goal to grow revenue 10% YoY for the next two years. Outcome-driven teams work backwards from that goal to establish team-level goals that specifically support revenue growth. This might involve production improvements (e.g., building and launching a new product, acquiring critical talent, or upgrading technology) or performance enhancements (e.g., streamlining customer onboarding for a better experience, revising digital advertising strategies, or adjusting pricing). Always, they prioritize the work that drives that success metric. Any work that doesn’t meet that criteria is put on the back burner.
Task-driven teams, on the other hand, focus on the volume of work output, regardless of its impact on business-level goals. Output may include bug fixes, communicating feature updates to users, updating copy or creative on a webpage, or any number of actions that need to happen to make a business function effectively. Success is checking the work off the list. Unfortunately, this rarely leads to the kind of outside-the-box thinking that drives production improvements, performance enhancements, or increased revenue.
Make no mistake: Bug fixes and update emails still have to happen in an outcome-driven organization. The key difference is that those tasks, while necessary, aren’t the primary focus of the organization or even a given team, and workers’ performance isn’t evaluated based on how many tasks they’ve completed, but on how their work contributed to achieving the business’ overall goals.
The Business Case for Outcome-Driven Teams
The ROWE model might have been too much too soon 20 years ago, but today, focusing on results over tasks has proven successful for many teams and organizations.
Consider the following example from MIT: A logistics firm found that inefficiencies in its process for scheduling carrier appointments routinely led to higher costs and dissatisfied customers. While a task-driven organization might have focused on improving employees’ ability to schedule more efficiently, the logistics firm instead established two desired outcomes and worked backward to remedy them.
Namely, they wanted to:
- Reduce carrier turnaround time
- Lower the cost of penalties associated with missed SLAs
This focus on outcomes over tasks enabled the organization to step back, evaluate the available data, and arrive at the best possible solution: a machine-learning-based appointment scheduling system. Using data to establish their current baseline performance, taking the time to assess the problem from a strategic perspective, and establishing clear goals from the outset ultimately enabled the logistics firm to save $1.2 million annually, reduce turnaround time by 16%, and improve customer satisfaction.
The benefits of adopting an outcome-driven approach often extend beyond simply meeting quarterly or annual goals. At a time when fewer than a third of U.S. employees are actively engaged at work, moving toward an outcome-based culture can deliver major workforce benefits, as well.
McKinsey found that disengagement and the attrition that comes with it may cost the median S&P 500 company up to $355 million annually in lost productivity. One way to help employees stay engaged: setting clear goals and establishing some autonomy in reaching them. The increased engagement, in turn, improves both performance and productivity.
Transitioning from a Task-Driven Culture to an Outcome-Driven Culture
If there’s a downside to adopting an outcome-driven culture, it’s that getting there requires a complete strategic realignment. That isn’t an easy or fast process, but these three steps can help almost any organization get started.
Look to Leadership to Set Goals
Achieving goals requires broad strategic alignment, with every team doing its part to contribute. However, before asking teams to roll up their sleeves and pitch in, C-suite leaders must first establish company-wide goals. What those goals are (say, an increase in revenue or a decrease in customer churn) matters less than the fact that they’re attainable, measurable, and apply to the organization as a whole.
But goal-setting shouldn’t just come from the top. Functional leaders should set their own goals, which then roll up to the bigger-picture objectives. The same goes for each manager and each employee. Every team member, regardless of seniority or function, should have a set of goals to achieve for a given quarter and must work with their leader to determine the milestones they expect to hit along the way.
Establish a Culture of Accountability
To see how a company-wide culture of outcome-driven goal-setting works in practice, you probably don’t need to look further than your nearest tech company. That’s because Google, Intel, and any number of tech companies, large and small, have made great use of the objective and key results (OKR) framework to define goals and hold employees accountable.
By setting clear, company-wide goals and requiring every team to commit to them, organizations that use the OKR framework successfully can foster a culture of accountability and enable every worker to see how their team — and they themselves — are contributing to overall company progress. Better yet, they can also supercharge productivity, avoid falling into the trap of tasks and busy work, and help teams achieve wins that align with business goals.
Be Willing to Evaluate and Adapt
Transitioning to an outcome-driven culture can’t happen overnight, and the first quarter or two are bound to be rocky. However, bumps in the road can also be a valuable tool for evaluating teams, workers, and even your goals themselves.
Google’s own OKR framework considers a 60-70% success rate for goal attainment the “sweet spot: If a person or team routinely achieves 90 or 100% of their goals, those goals were likely not ambitious enough to begin with. On the other hand, if goal attainment regularly falls below that 60% threshold, those goals may have been too lofty, or teams may not have the tools, training, or even time they need to reach them. In either case, a willingness to evaluate progress and use the data generated by the OKRs to further refine the next set of goals will be key.
Takeaways for Tech Leaders
With more to do and fewer resources to work with, today’s tech leaders have to find creative and resourceful ways to achieve their goals. Shifting the focus away from tasks and toward outcomes can help them reduce the need for micromanagement and task tracking, empower employees to make greater contributions, and — most importantly — increase productivity and engagement. Best of all, it’s a shift that can happen without major spending on tools or talent.
But creating an outcome-driven organization, or even an outcome-driven team, isn’t easy. It requires a sustained commitment to culture change, a willingness to be bold and experimental, and the ability to adapt. If that sounds like a tall order, it is — but with budgets unlikely to expand any time soon, it may be tech leaders’ best bet for success.
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