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  • Writer's pictureDannielle K Pearson

The Problem with Outcomes. The danger in solely focusing on results.

Early in my career I had a boss that would commonly say to his team “to be exceptional, you must act exceptionally.”  Inspiring sentiment but what does it really mean? How do you act exceptionally?  The tricky bit is, exceptional is subjective.  What’s exceptional to one, may be mediocre to another.  For me, truth has always been at the heart of acting exceptionally.  To be exceptional, it requires awareness of where you are today, in relation to where you want to go tomorrow.  The delta between the two is where exceptionalism either thrives or falls short.  A critical point often missed, to overcome the delta, you have to acknowledge it’s there.  Honesty can be uncomfortable. Whether personally, or organisationally motivated there is a need to take stock of what you are good at, and equally what you are not good at.  The former is rewarding, the latter is humbling. 


The need for outcomes


I routinely encounter organisations both big and small that strive to be exceptional but ignore the delta.  Ambitions of excellence exist without an honest view on how to achieve it.  There is a dogmatic belief that execution and outcomes cure all ailments.  Most of my career has been focused on strategic roles where I’m employed to identify the delta and bridge that gap. Despite my penchant for strategy, I spent several years, in sales where I was routinely caught amongst the proverbial delta.  The motto was always “pipeline, and revenue cures all problems,” a statement I’ve heard hundreds of times, and one I have stated several.  It’s hard to argue with particularly when you’re in sales, pipeline and revenue are the only metrics that matter.  Yet, revenue doesn’t solve all problems, paradoxically sometimes it creates much larger ones.  My time in sales was working for a well-known software company.  I was once given direction to focus on building pipeline in a specific market segment. Importantly, this segment made up the bulk of our industry use cases. Fair enough, sound logic. The only problem was that we held 25% market share in this particular segment. A segment that only consisted of 600 companies globally.  Applying simple math and factoring in metrics like current market share, conversion rate from prospect to pipeline, average deal size, and close rate over time, the notion of satisfying a multi-million-dollar quota on this segment alone, was madness, and failure imminent.  To make matters worse, an adjacent market segment, in the same industry, was largely an untapped market. We had less than one percent market share, amongst tens of thousands of domestic market entities. From a growth perspective it was more logical to focus on a “build year” to gain exposure and build viability in the untapped market rather than doubling down on the saturated one. While it delivered short term success, the tap would undoubtedly run dry, and quickly.  While I made this argument internally, it required six months of work and countless power point slides, to get a consensus that the argument was even viable.  Meanwhile we lost an opportunity to take advantage of a much needed “build year.” The absence of this, hurt the companies long term trajectory in the industry, one for which seven years on, hasn’t recovered from. 


It would be easy to relegate the example above, to a foible made by a hyper growth software company, but it’s not.  I have countless examples with the least expected offenders. A few years ago, I worked with a product owner, within a well-known Consultancy. This consultancy had invested tens of millions into a product that like my previous example, had a finite market with a high number of competitors.  The product had little differentiation across the other more established players, lower compatibility with adjacent systems due to a poorly designed API strategy and priced at the high end of the market.  When I recommended using some of the investment dollars on market research to adapt the product and improve its competitiveness, it was dismissed. Any attention taken away from pipeline generation was out of the question.  The result, very few clients purchased the product and it routinely operated at a loss.  


Hyper execution can manifest in varying ways.  I worked with an agency that was smashing their targets actively ignoring their double-digit employee churn rate.  When advised to focus on the churn rate, it was received by leadership as “stop closing deals and attend to the churn rate”; it’s one or the other but it could not be both.  Logically, it would be madness to not focus on driving revenue but assuming or hoping closing a deal corrects a major morale problem, is misguided. Ironically, in the long run the churn problem will impact the organisations’ ability to close and execute deal cycles.

 

Overcoming the Outcome Bias


It's easy to judge the provide examples listed above, as authored the issues are obvious, they can be less obvious when it’s your profit and loss (P&L) statement.   Unfortunately, as humans our perspective changes depending on how close we are to the fire.  It’s harder to gain perspective when you are standing in it, versus being a bystander.  This is why it’s important to take time out to question whether the outcome is the right one, or if there is a better outcome to be had, rather than jumping straight into execution mode.

Outcomes, in of themselves can be deceiving.  They can give a false sense of progress.  I learned a long time ago, never mistake motion for progress.  It’s important to recognise that we live in a growth obsessed world, if you are not growing than you are somehow failing.  In some instances, this may be true, and in others it’s a false premise.  It’s possible to do both, to drive short-term outcomes, and devise pathways to longer-term objectives simultaneously. One does not have to come at a cost to the other.  When we ignore or deprioritise the intangible opportunity today, it becomes a tangible and urgent problem tomorrow.  A good reminder that to be exceptional, acknowledging the delta is seminal.   

 

 

 



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