Outcome vs. output in product management: understanding the difference

In product management, success hinges on understanding and balancing various critical elements. Outcomes and outputs stand out as fundamental pillars. While both are essential for measuring progress and success, their roles and impacts are distinct. 

In this article, we’ll explore how to navigate the complexities of outcomes and outputs and how mastering the nuances of each can drive your team, product, and company toward sustained growth and innovation.

Think of an outcome as your final product's impact or direct result on its end users. Alternatively, output measures the effectiveness of the product or feature itself. For many product managers, it's easier to separate the outcome as the "what" and the output as the "how" of any project.

It is important to understand the differences and how they intersect in your planning process. When product development follows a few priorities, the result is a healthy flow of goal- and customer-oriented steps that advance the success of the product and the company.

Outputs

Output-driven product managers typically focus on the core product. They'll focus more on how the final deliverable will work, its technical aspects, or how it's built to succeed. 

These might include user studies, unique features, or a new product.

Outcomes

For product managers who align more with outcome-driven success, the impact of the final deliverable matters most. These professionals often ask themselves about the problem the product intends to solve. They'll focus on user benefits and the anticipated product result. 

These might include measurements of customer pain points, innovative possibilities, or change behaviors.

Here are a few examples to deepen your understanding of how both measurements are important in product management:

The company training example

Imagine company training initiatives that involve the launch of new software training modules. 

The number of employee training sessions is a measurable output, and the improved productivity of staff is a measurable outcome.

The Agile example

Consider an Agile environment where the development process is iterative and collaborative. In this context, an output could be the release of a new software feature after each sprint. This feature represents a tangible deliverable that the development team has produced. 

However, the outcome goes beyond the feature itself—it is reflected in the improved user experience, increased efficiency in user tasks, or enhanced customer satisfaction resulting from that feature. By focusing on both the outputs (the features developed) and the outcomes (the benefits and improvements experienced by users), Agile teams can ensure they are not just building products but also delivering real value and achieving long-term success.

The hammer and nail example

To explain it more simply, consider a hammer and nail. The hammer represents the output or the physical tool used to drive a nail. The final product (outcome)—is a securely attached nail to a piece of wood.

Outcomes and outputs are both essential metrics in product management, but there is a question within the industry about whether there are benefits to prioritizing one over the other. 

Most successful project teams suggest that PMs strike a balance to achieve consistent success. 

While the outputs demonstrate a tangible process or activity result, the outcomes will assign more meaningful impacts that align with the original project goals.

Specific drawbacks demonstrate why a balance between output and outcome is critical for product success:

1. Lack of focus on customer or user needs

There’s a risk of becoming a "feature factory," where product management focuses solely on delivering features. This results in a lost connection with the big picture, i.e., the needs of your target users and customers. When you lose sight of what your customers want or need, you risk producing products and features that don't provide any direct benefits.

2. Inefficient or misplaced resource allocation

If your company had unlimited resources and budgets to create new solutions, output focus might be acceptable. However, your organization likely needs to be more precise about resource allocation, avoiding developing low-value or unnecessary features that don't lead to ROI.

3. Short-sighted vision

Focusing on outputs alone as a PM team can quickly become short-sighted. Every project you take on should produce a long-term advantage. However, without future goals in mind, results will be limited to minor, short-term gains.

4. Reduction in user satisfaction

Regardless of your industry or product, the definition of success is almost always user satisfaction. To achieve satisfaction, your team will need to understand pain points and user problems to solve, a goal that's easily lost when the team focuses entirely on output tasks.

When your product management team adopts an outcome-centric approach, you can expect several advantages:

Flexibility

Starting with the desired outcome provides greater freedom and flexibility. Reverse-engineering your efforts from the goal prevents your project from being boxed in by tasks.

Motivation

Employees are more motivated when they understand how their daily tasks contribute to the greater good. Knowing the impact of their work enhances their connection to the project.

Customer-centricity

Focusing on outcomes aligns with customer needs, driving innovation, growth, and improvement.

Additional benefits of an outcome-centric approach include:

• Alignment with business goals: Outcome-focused products build customer loyalty and drive company growth by aligning with long-term business objectives. For example, when a company prioritizes customer feedback in product development, it can enhance user satisfaction and retention.

• Innovation: Focusing on outcomes positions your company to innovate by quickly addressing unique customer problems. Companies like Apple have thrived by constantly adapting to user needs and staying ahead of competitors.

• An experience-driven marketplace: Customers value experience over affordability and quality. An outcome-driven focus ensures a high-value user experience, as seen with brands like Tesla, which prioritize user experience to drive loyalty.

• Long-term success: Outcome-centric projects lead to sustained growth and long-term success by proactively creating solutions that advance the company. For instance, Amazon's focus on long-term goals has helped it maintain its market leadership.

Product managers can shift their focus towards outcomes by prioritizing the value of successful projects. It’s about creating a product development mindset that generates meaningful results for customers, stakeholders, and the company.

How you can make mindset changes within your PM team:

• Define overarching business goals: Align every product with outcome-focused business goals. Retrofit your product development with these objectives in mind.

• Understand customer needs: Stay in tune with shifting customer preferences through research, feedback, and testing. For example, Netflix continuously gathers user data to refine its recommendation algorithms and content offerings.

• Prioritize tasks through outcome success: Allocate resources and make process decisions with outcome goals in mind, ensuring alignment with core objectives—focus on features that deliver the most value to users first.

• Review progress regularly: Keep your team's efforts aligned with long-term goals through regular pulse checks. Periodically reviewing progress helps identify areas for improvement and keeps projects on track.

• Encourage continuous improvement: Foster a culture of adaptation and growth by identifying opportunities for improved efficiency and user experience. Seek team input to support a healthy product management culture.

Understanding the difference between outcomes and outputs is crucial for effective product management. While outputs represent the tangible aspects of what you create—features or deliverables—outcomes capture the real impact and value your product brings to users and the business. 

Balancing these two elements ensures that your product performs well technically, addresses user needs, and drives meaningful results. 

Focusing on outcomes aligns projects with broader business goals, fosters innovation, and enhances customer satisfaction. Integrating both perspectives into your product management strategy will lead to more successful projects and sustained growth. 

Embrace this dual focus to propel your team and company toward long-term success and resilience in an ever-evolving marketplace.

See also: How Dovetail helps you master continuous product discovery.

Outputs will measure what has been produced or accomplished. Outcomes accurately measure customer experience success since they measure a deliverable's desired results and impacts on the target user. Remember, the customer won't necessarily care about your steps to achieve the final product. They'll care about how the product helps them, solves their problems, or simplifies tasks.

As a product manager, you can list your primary outputs as:

• Product requirements or essential features

• Marketing research that identifies personas, analyzes competitors or defines market fit

• Product vision, including demos, mock-ups, and product purpose statements

• Customer insights that verify how to measure customer experiences or product pricing

• Analytics and reporting that collects and shares performance KPIs

The deliverable is what you "do" as part of your project. You'll outline plans and tasks necessary to achieve it. Outcomes, on the other hand, are what you expect to happen once your deliverable is complete. They are the final product's result as it impacts key users or customers.

Increased sales are an example of a product outcome. The product output is a CRM software solution with new features to categorize prospects, leads, and engagements. 

The outcomes of said output are increased sales, more efficient customer communications, and more efficient sales teams.

Think of the result as a product or action's more quantifiable or immediate consequence. 

The project's outcome usually emphasizes a more long-term and broader impact on the target audience.