What is outcome-based leadership? (The reasons can be way more simple in theory than in practice)

Definition – getting clear on the outcomes and then letting others work out the best way to get those outcomes.

Outcome-based leadership is where success is measured by achieving outcomes which are clearly defined, rather than just by completing certain tasks, procedures and processes.

Basically it’s clearly answering the question “At the end of the year, what outcomes would need to be met for us to say that you’ve done a great job?”

Once the outcomes are clearly defined, then leaders and teams work collaboratively to work out what needs to be done to achieve those outcomes, both as a team and individually.

What are the benefits of outcome-based leadership?

  1. Increased clarity and focus – when people have clarity and focus, it means that more time and energy should be spent on tasks and procedures which really move people toward meaningful results. This also means there is less ambiguity and therefore less chance of a mismatch of expectations which can lead to frustration and difficult conversations. All of these drain energy credits and therefore can lead to unnecessary burnout.
    Rewarding achievement of outcomes also means that there is less reward for just “looking busy”. If you reward people for working really hard and looking busy then you get people working really hard and looking busy, instead of actually getting the outcomes which are going to lead to profitability and growth.
  2. Improved performance by increasing innovation and flexibility – Focusing on outcomes should hopefully encourage people to find the easiest or laziest way of getting those outcomes. Again, this should hopefully therefore lead to less burnout.
  3. Outcome-based leadership can go a long way to building trust – especially in a hybrid environment where people are maybe still worried about whether they can trust people to work remotely. Where people deliver outcomes, people tend to care less about the hours worked or where the work takes place.

Impediments to outcome-based leadership

As simple as outcome-based leadership appears to be, it’s not necessarily as easy to implement you would first think. So here are a few other things to consider……

  1. Just focusing on outcomes doesn’t mean that leaders no longer have to lead. While it creates more autonomy for people to come up with their ways of doing things, leaders are still required to be a sounding board, to provide guidance where appropriate and help to remove any obstacles that may come up along the way.
  2. Sometimes it can be difficult to provide clarity and focus around the outcomes – some jobs lend themselves more easily to defining clear outcomes, for example sales roles where there is generally a revenue target, maybe some activity targets and 12 months to sort it out.For other roles it can be harder and so there can still be ambiguity and confusion – this leads to frustration and overall drains cognitive energy. The brains hates ambiguity so will spend a lot of energy credits trying to make sense of it.
  3. Even where clarity of outcome is quite straight forward, obviously external factors can come up which may need to be taken into account, for example a market downturn.If a plan isn’t developed before the external event occurs, dealing with these on the fly can again lead to ambiguity and confusion.
  4. Arguably this should be number one… a lack of accountability culture is a massive impediment to achieving outcomes, and also to doing the procedures and tasks along the way. This can lead to frustration for the people in the team who are accountable and is one of the biggest contributors to burnout.

What should leaders do to maximise the effectiveness of outcome-based leadership?

Naturally there are some non-negotiables required to help implement outcome-based-leadership and make it successful.

  1. Clearly define outcomes – keep clarifying unless everyone involved feels that there isn’t any ambiguity about what’s expected. In some roles this will take more iterations than others.
  2. Pre-empt cases in which these outcomes would be adjusted. And regularly discuss progress towards the outcomes so that strategies to achieve the outcomes can be tweaked if required.
  3. Provide support regarding the strategies, processes and procedures, and any coaching that people may need to help achieve these outcomes. This can include anything specific to upskilling to complete the work required to get the outcomes, but also to help people optimise their energy, target their strengths etc. If work feels really hard, people are doing it wrong. As a leader you need to equip your team with the skills to work in an optimal way for them.
  4. Foster a culture of accountability – even this isn’t as simple as it sounds. When people are asked in surveys how accountable they think they are compared to those around them, people often assess themselves as highly accountable and assess other way lower on the accountability scale.Obviously this isn’t possible. And it shows exactly why most organisations have an accountability problem.Therefore it’s important to be armed with accountability frameworks that you know how to coach. That includes a discussion of the consequences of not meeting outcomes. It also means that leaders need to lean into having conversations in a timely and rational manner when outcomes haven’t been met and therefore know how to hold others to account.

So while outcome-based leadership may take a little to implement, when done well, it’s where performance magic happens.

If you are interested in learning more about implementing an outcome-based leadership approach in your company, why not book your Performance Call with us?