Measures of Success in Agile Businesses

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  • 0:04 Are We Agile Yet?
  • 0:35 Measuring Agility
  • 2:25 Output Measures &…
  • 4:02 Correlation & Cause
  • 5:02 Lesson Summary
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Lesson Transcript
Instructor: Scott Tuning

Scott has been a faculty member in higher education for over 10 years. He holds an MBA in Management, an MA in counseling, and an M.Div. in Academic Biblical Studies.

Agile organizations monitor their performance by evaluating both outputs and outcomes. This lesson explores the differences between the measures, and it provides examples of how each complements the other.

Are We Agile Yet?

Many business leaders confuse output measures with outcome measures. Output measures are concrete, technical, and fairly narrow in scope. It's often easy to spot output measures because they're highly quantifiable, and they are often identified by keywords like number, percentage, count, or average.

Outcome measures, on the other hand, are more meaningful to the agile organization. These measures are more interested in whether the organization's performance is actually accomplishing the things that it has defined to be important.

Measuring Agility

To illustrate the difference between these measures, let's consider a fictional nonprofit organization dedicated to helping men and women who have been recently released from prison reintegrate into society in a meaningful way. Viewed from a high level, our fictional nonprofit makes contact with the individuals who are soon to be released from prison and helps them find housing, jobs, and other resources to help make them successful.

For an organization with this goal, output measures could include things like:

  • Total number of individuals served
  • Number of clients placed in full-time jobs within 90 days of release
  • Number of free suits distributed for job interviews
  • Percentage of clients who re-offend or return to incarceration

Our fictional non-profit might want to measure an output like the number of free suits provided to clients before a job interview.

Each of these four indicators is an output measure. They are important ways to tell whether the organization is being successful in a specific area, but they don't really indicate whether the overall organization is accomplishing its mission. In aggregate, however, they are a powerful way to demonstrate effectiveness and agility.

Outcome measures, on the other hand, might include things like:

  • Individuals released from incarceration have established stable lives following their release.
  • Local employers understand the contributions that can be made by recently released prisoners.
  • Colleges and job training programs are key players in providing education and opportunity to recently released individuals.
  • Government agencies and elected officials take increased notice of, and establish goals for, making reentry as smooth as possible.

You can see by these two sets of criteria that the first is highly quantifiable, regardless of whether the organization is agile. In contrast, the four outcome measures provide far more meaningful data regarding the overall success of the nonprofit and its ability to carry out its mission consistent with agile principles.

Output Measures & Income Claims

Although the example used to illustrate the difference between outcome measures and output measures might lead you to believe that outcome measures are far superior, that's only true in the limited sense. Obviously, it's absolutely true that outcome measures provide better, more reliable information about whether an organization is meeting its goals and is functioning with an agile mindset. On the other hand, analyzing only outcome measures and ignoring output measures can lead to confusion or inaccurate assessments of the specific things that make an organization achieve its outcome goals.

If we return to the example of the nonprofit aiding individuals in re-entering society, it would be very difficult to make any kind of educated assessment as to whether the organization had achieved desirable outcomes without having been able to first measure outputs.

Output measures can be graphed and reported as a means of supporting claims about outcomes.

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