BUILDING A

performance based
work culture
HOW TO USE OUTCOME-BASED
THINKING TO DRIVE YOUR
WORKFORCE TOWARD ACHIEVING
MEASURABLE RESULTS

ALL CONTENT 2013, THOMPSON & RESSLER, LLC. ALL RIGHTS RESERVED
 overview
WHY OUTCOME-BASED GOALS?

STEP 1: TOSS S.M.A.R.T. GOAL-SETTING PRACTICES

STEP 2: ADOPT OUTCOME-BASED GOAL SETTING

WHY OUTCOME-BASED GOALS?

STEP 1: OUR ULTIMATE OUTCOME

STEP 2: OUR ULTIMATE CUSTOMER

STEP 3: IDENTIFY ACTIVITIES THAT ENABLE THE OUTCOME & ACTIVITIES THAT DON’T

STEP 4: MEASURE SUCCESS

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 overview
There are tons of books and other resources written about how to set goals – whether
personal, professional or organizational. We all have an idea about what goals are and
why we need them – but often, figuring out how to set clear goals is a goal we can’t
seem to achieve. It’s challenging to get clear about where each person is headed, why
they’re headed there, and how you’re going to measure it.

In a traditional flexible work environment, time + physical presence are foundational

pieces that cause us to assume results will be achieved. But too often, they aren’t.

The problem is that when employees are showing up every day and putting in time, they
look like they’re doing work. And if they look like they’re doing work, half of your job as a
manager feels accomplished. It’s easy for days, and even weeks, to go by where
there is a lack of true performance discussions. In fact, you could make the fatal mistake
of talking about goals only on a very specific rhythm – quarterly, bi-annually or annually.
Wow. A lot can happen with the organization while waiting for the calendar to say “It’s
quarterly review and goal-setting time!”

As you can see, it’s dangerous to rely solely on time and physical presence as measures
of performance. It’s important to work with your employees to set measurable expecta-
tions – sometimes daily. Remember: Your performance discussions can take place in
a cube, office, coffee shop, or by conference call, instant message or text message ex-
change. Discussions don’t need to look the same for everyone or be in the same location
every time to be deemed ‘performance conversations’.

Here’s what’s important: The discussion happens.

Okay – so let’s get down to business.

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 Why Outcome-based goals?
Goals give direction to focus individual and team efforts and resources. By setting goals
that clearly define measurable results you ensure everyone has a crystal clear picture of
what is expected to move the organization forward.

Knowing what is expected will focus efforts toward desired results. And achieving those
results will lead to a sense of accomplishment for individuals and teams.

Specifically, good goal-setting drives organizational results by ensuring that each employee:

• Understands what’s expected of them

• Is held accountable for things that matter and are measurable

• Understands how their performance impacts the performance of the team,

department and organization

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 STEP 1:
TOSS S.M.A.R.T. GOAL-SETTING PRACTICES
First shed the sacred cow – the one artificial construct that essentially defines current
goal-setting philosophy – in order to get crystal clear about real measurable results. This
theory shapes not only the way people commonly think about goals, but more than likely,
the way everyone thinks about work. And that, of course, is our Specific, Measurable,
Achievable, Relevant, Timely – i.e., S.M.A.R.T. – goals.

Anyone can write a good S.M.A.R.T. goal. When you think of the time you spend
producing S.M.A.R.T. goals, performing reviews, and providing documentation to HR –
you are reducing the energy you have to manage the work. It’s not that S.M.A.R.T. goals
are bad, but there is a major component missing: everyone being crystal clear about the
outcome.

ILLUSTRATIVE EXAMPLE:

If you heard “Everyone meet me at 9:00am tomorrow morning – we’re going on a vaca-
tion!” what would your first question be? It’s obvious: you need to know where you’re
going so that you can perform the necessary activities and pack the right clothing and
supplies to prepare for a successful vacation. Or do you?

Here’s how you might get ready for ‘vacation’ using the S.M.A.R.T. goals framework:

Imagine you’re in a Logistics department. Let’s create your S.M.A.R.T. goal around
“packing for vacation”:

Specific: I will pack (shorts, t-shirts, swim suit, sunscreen and flip-flops)

Measurable: I will pack in a 24” suitcase, less than 50 lbs

Achievable: I have the means and ability to accomplish this task

Relevant: We’re going on a trip so this is an important activity: packing

Timely: I will have my task completed by 10pm tonight so I’m ready for action!

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 Now you feel as if you’ve successfully achieved your S.M.A.R.T. goal – that is, if Hawaii
is the destination or outcome. But you lose because the destination is Vail, Colorado to
snowboard. You’ve packed the wrong things! Now your performance in Vail is subpar.
You’re busy running around shopping for warm clothes, snowboard equipment and the
like. You’ve also wasted a whole suitcase on beach clothes, so you now have to buy an-
other suitcase to carry your new purchases.

Now you’re wasting time AND resources.

Even though you established a “reasonable” set of S.M.A.R.T. goals – that were even
aligned with the outcome of vacation – you weren’t crystal clear about the outcome.
Leaving out one small piece – the destination – resulted in an experience that put you at
the bottom of the heap. Nevertheless, you worked just as hard and met every one of your
S.M.A.R.T. goals!

Wow. Now just imagine this happening all over your organization. Say 10, 100, 500, 5000
people on teams doing lots of activities (working hard!) that may or may not be heading in
the right direction. But they’ve achieved their S.M.A.R.T. goals! Check!

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 STEP 2:
ADOPT OUTCOME-BASED GOAL-SETTING
Outcome-based goal-setting gets everyone aligned first. This way, creating measurable
results is effective and achievable. This framework is outcome-based thinking, and gener-
ates an environment where performance is managed on a continuous basis. That means
all the time, not just at the yearly performance review meeting. Here are the 5 questions
that everyone needs to be able to answer in order to be part of a dynamic performance-
based organization:

1. What is the ultimate outcome?

2. Who is the ultimate customer?

3. What are we doing that is enabling the ultimate outcome?

4. What are we doing that’s not?

5. How will we measure success?

Ask yourself: does everyone on your team or in your organization know what ultimate
outcome you are trying to achieve? You probably won’t find it in the vision or mission
statement – which shouldn’t come as a surprise, since that’s what the people at the top
probably handed down.

To adopt outcome-based thinking and position everyone to be accountable for driving

measurable results, take your team through the following exercise.

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 TEAM EXERCISE STEP 1:
OUR ULTIMATE OUTCOME
Get the functional team together and work toward coming to consensus on the answer
to the question:

What is our ultimate outcome as an organization? Why do we exist?

Have each person write down what they think it is on a piece of paper. Some will struggle
to regurgitate the mission and others might remember the vision. All of the answers will
likely be different – maybe extremely or slightly so, but they certainly won’t be 100% alike.

CHALLENGE:

Therein lies your first (and most critical) challenge: the outcome simply isn’t a part of your
employees’ DNA. It’s not what makes people wake up in the morning raring to go... yet.

HOW TO GET TO THE ULTIMATE OUTCOME

Start with your mission statement. With the mission statement in front of everyone, ask: If
we do this, then what? (The ultimate outcome needs to be simple and compelling. People
will be proud to say it).

EXAMPLE:

Mission Statement: It is the mission of ABC Car Gadgets to provide personal vehicle
owners and enthusiasts with the vehicle-related products and knowledge that fulfill their
wants and needs at the right price. Our friendly, professional staff will help inspire, edu-
cate and problem solve for our customers.

That’s a great statement and, if true, the customer will be happy and the company will
make money. However it’s quite a mouthful and not something you can easily spew out
or rally around. Who gets up in the morning and says to themselves, “Today I’m going to
provide personal vehicle owners and enthusiasts with the vehicle-related products and
knowledge that fulfills their wants and needs at the right price... Hooray!”

Make it real by asking the question again “If we do this, then what?” Keep asking until the
outcome is distilled to its simplest form.

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 TEAM EXERCISE STEP 1:
OUR ULTIMATE OUTCOME cont...
ASK:

If we actually do what the mission states, then what?

DO:

Facilitate discussion to distill to its simplest form: The customer will be happy, because
they’ll have what they need to go places. The cars will work so people can get around.
We help people go places. I help people go places. Bingo!

Your ultimate outcome:

I (we) help people go places.

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 STEP 2:
OUR ULTIMATE CUSTOMER
Once people are supporting the broader outcome – one they remember, that excites
them – it’s time to figure out who the ultimate customer is.

And there is only one customer. Everyone else is a resource or tool to help you delight the
ultimate customer.

CHALLENGE:

Often, you will hear people say “everyone is my customer” or “I have internal and exter-
nal customers”. When you’re serving 14 different customers, the real customer becomes
lost.

HOW TO GET TO THE ULTIMATE CUSTOMER:

First, identify who’s not the customer (Think of everyone who’s not the ultimate customer
as a resource or tool that you can utilize to serve the ultimate customer).

EXAMPLE:

If you’re in Public Relations, you may say that the Wall Street Journal, TIME Maga-
zine or a particular journalist is your customer. But they’re not. They’re a resource that
you tap to communicate to your ultimate customer – perhaps about your organization’s
new product or efforts to ‘go green.’ In either case, you’re talking to the customer – and
that’s not a journalist.

So who is your ultimate customer?

Everyone in the organization must agree on who this is so that employees direct all work
activities towards delighting the one customer.

For ABC Car Gadgets, the ultimate customer is the shopper who buys parts and services
– whether in their stores or on their website.

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 STEP 2:
OUR ULTIMATE CUSTOMER cont...
SAY:

If everyone we thought was our customer is now our resource, who is our ultimate cus-
tomer?

CHALLENGE:

Some might say, “Well, that’s easy for a store clerk to figure out at ABC Car Gadgets.
They come in direct contact with the customer every day. I’m in corporate Human Re-
sources and spend my time serving what I thought were my corporate clients in the office
every day. How do I affect the ‘ultimate customer’?”

This is what every person in every position of every department needs to figure out and
connect to. Otherwise, your work activities might fit nicely into your S.M.A.R.T. goal; but
for the most part, they’ll be irrelevant.

EXAMPLE:

The Human Resources employee is responsible for corporate culture, retaining and
attracting talent, management coaching and the like. If they do their job well, then the
resources (employees) have the right foundation to do their jobs well, and this, in turn,
filters down to the ultimate customer. If they don’t do their jobs well, then engagement,
morale and productivity suffer and, in turn, these declines affect – you guessed it – the
ultimate customer.

DO:

Have each person trace how their role affects the ultimate customer. This will be a critical
piece in defining measurable goals that achieve results against the ultimate outcome.

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 STEP 3:
IDENTIFY ACTIVITIES THAT ENABLE THE
OUTCOME AND ACTIVITIES THAT DON’T
Once people are supporting the broader outcome – one they remember, that excites
them – it’s time to figure out who the ultimate customer is.

And there is only one customer. Everyone else is a resource or tool to help you delight the
ultimate customer.

CHALLENGE:

Now comes each person’s task: to figure out what they do on a daily basis that enables
the ultimate outcome, and in turn, serves the customer. It’s equally critical for them to
figure out what they do that doesn’t contribute to this at all. You’ll mostly discover that
there is a lot of wasted time – really, a lot.

DO:

Have each person work with their functional team to figure out which activities are specifi-
cally helping them drive toward the ultimate outcome and which activities are getting in
the way (i.e.,wasting time like unproductive meetings).

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 STEP 4:
MEASURE SUCCESS
CHALLENGE:

Measures must be clear and specific and most importantly, prove that the activity being
performed is relevant and defendable against the ultimate outcome and customer.

EXAMPLE:

POLICY DRIVEN/S.M.A.R.T GOAL: In order to remain cohesive as a team, everyone

needs to be in the office Tuesday, Wednesday and Thursday between 9am and 3pm (S,
M, A, T). Anyone that needs to be out of the office during these times must get
permission (S, T) so that customer needs don’t suffer. (The ‘R’ definitely seems to be
missing here – and if it’s not relevant, it’s not important.)

PERFORMANCE DRIVEN GOAL: Expanding perceived hours of operation will help us

make life fun and easy (outcome) for our guests (the customer) by meeting them where
they are.

Therefore, starting September 1st, we will make email support available 24/7 (result). We
will track sales and customer satisfaction metrics (measures), working with the Retail
Support Team to further refine measures that target the success of this
change for 90 days and then re-evaluate.

EXAMPLE:

POLICY DRIVEN/S.M.A.R.T. GOAL: When you’re working offsite, I’ll need to see a log
of activities you are completing each hour during an 8-hour period (S,M). You need to
submit this at the end of each day (T,M) that you are working offsite (A). (Again, is this
Relevant?)

PERFORMANCE DRIVEN GOAL: Conquering the backlog of applications will ensure

that the citizens of XYZ County (our customer) who require these services are living in
a safe and healthy manner (outcome). Therefore, we are going to process applications
wherever makes the most sense to get them completed at the time service is required
(result). We will measure call volume, application process time, and window wait

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 STEP 4:
Measure Success cont...
time (measures) to make sure we effectively and efficiently meet our outcome.

Don’t let S.M.A.R.T. undermine your performance The S.M.A.R.T. goal methodology is
sound. However, it’s often not effective in practice if it’s being used to drive policy – or
when the people writing the goals are not clear about the outcome they are driving to-
ward or the customer they are serving. It’s also not effective if old-fashioned, irrelevant
workplace policies are more important than the work.

Outcome-based goals are ongoing, team-driven and always relevant.

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 WHOSE JOB IS IT TO SET GOALS?
Setting results (you may have referred to your results as ‘goals’ in the past) is not solely
the job of management.

DO:

• Take everyone through the team exercise in this guide

• Have each employee look at their current goals

• Run each (current) goal through the outcome-based thinking filter

• Toss goals that are ‘rules’-based and irrelevant

• Toss goals that sound like a job description

• Toss anything that isn’t measurable

• Re-write goals that include activities and specific measures that you can defend (they
affect the ultimate outcome and customer)

• Take your new goals to your manager for discussion/feedback/coaching

IMPORTANT:

How you get to your results is an activity. You are in charge of the activities to get to your
results. Management’s role is to help employees when they get stuck and guide them if
they may be going off course. Management knocks obstacles out of the way, and acts as
a coach and support mechanism as employees work toward achieving the
measurable results both parties have agreed upon.

UTILIZING YOUR CURRENT PERFORMANCE MANAGEMENT SYSTEM

Continue to use your organization’s performance management system to track and en-
sure the results employees are driving toward are measurable and focused on affecting
the ultimate outcome. Avoid getting bogged down by listing specific activities.

Employees who utilize outcome-based goal-setting have 3-4 goals that are spot-on and
achievable.

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 WHOSE JOB IS IT TO SET GOALS?
Activities can and will change on a daily basis as you reject activities that are a waste of
time (i.e., commuting to the office to be physically present when physical presence is not
necessary to you achieving measurable results, or attending a meeting that you know will
not help you achieve your results), and refine activities that make sense and more effec-
tively help you achieve results.

In a performance-based work culture, results are fluid and flexible. Revisit agreed upon
results as often as you feel necessary. Do not let an agreed upon result hold you hostage
if it no longer makes sense.

Re-write it. Tweak it until it makes sense. Visit with your manager to get buy-in and
support.

Outcome-Based Goal-Setting Template

Use this as a guide to practice setting goals that are focused on an aligned
outcome and customer

Ultimate Outcome This is the same for everyone.

Ultimate Customer This is the same for everyone.

Goal
Write a goal (with activities) that includes a measurable tie-in to
the ultimate outcome

Goal
Write a goal (with activities) that includes a measurable tie-in to
the ultimate outcome

Goal
Write a goal (with activities) that includes a measurable tie-in to
the ultimate outcome

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