As I alluded to in the previous post, one of the changes in thinking, and in particular language, for me recently is the idea of impact. Specifically that impact is different from outcome which is itself different from output. I’ve differentiated outcome from output for some time, as have others, but I believe impact is a further step in understanding how we approach change.
To relate the three ideas to each other, I would say that:
Outputs create outcomes which have impact.
This mapping also ties in nicely to Simon Sinek’s Golden Circle model that I have referenced before.
Outputs (or sometimes activities) are the things that we do in order to achieve something. They provide the details about what gets done, such as specific practices or implementation details. In the Golden Circle, they are the WHAT.
Outcomes are the future state we hope to achieve by completing the outputs. They provide the details about what goals we hope to achieve, such as end results or behaviours. In the Golden Circle, they are the HOW.
Impacts are the tendencies or dispositions of an outcome. They give an indication of whether the future state is a positive or negative one, without limiting the scope of what that future state might be. In the Golden Circle, they are the WHY.
As Simon Sinek recommends with the Golden Circle, we should always Start with Why, and thus when implementing any process or product it is useful to know what impact we want to have. I have realised that the notions of Flow, Value and Capability that I refer to as part of Kanban Thinking are actually the primary impacts that I hope that a Kanban System will achieve.
- A positive impact on flow might be one which results in earlier and smoother delivery and might be seen in a reduction in lead time or variability.
- A positive impact in value might be one which results in a better return on investment or improved margins and might be seen in improved economic outcomes
- A positive impact in capability might be one which results in better business performance and might be seen in improved quality, throughput, or customer and employee satisfaction.
Another recent and related influence has been Geoffrey Moore’s Escape Velocity, where he talks about a hierarchy of powers.
- Category Power relates to the relative demand for a class of product.
- Company Power relates to the organisation’s relative position within a category.
- Market Power relates to the relative company power within a specific market segment.
- Offer Power relates to the relative demand for a specific product.
- Execution Power relates to the relative ability to outperform competition.
This has got me thinking about how impact might be the effect a change has on one or more of these powers. While flow is more aligned with execution power, value and capability are aligned to the other powers.
[…] Outputs create outcomes which have impact. Output is what we ‘physically’ deliver – typically that’s running tested software. The outcome is the net result our output produces – we helped customers to achieve the thing they wanted to achieve. Huzzah! Or maybe we didn’t. Bugger! Impact is the ripple effect of consequences from the outcome. Of particular note are the experiences we cause people to have – customers are ecstatic and tell their friends; we get more customers, more revenue, improved profitability. Or customers give up and look elsewhere for a solution to their problem. Another desired outcome might be certain technical debt is repaid. The impact? Perhaps an up-coming feature will now be cheaper to deliver and will carry less risk. Impact gives us reasons why. If our goal is to create a certain impact then we must consider the outcome and the output as hypotheses. […]
From a software-delivery perspective, the Outputs (what), Outcomes (how), and Impacts (why) loosely align with the key QA levels (respectively): Unit, Integration, Acceptance.
[…] Impact, outcome and output, Karl Scotland […]