There has been a lot of talk of Outcome-Based Culture (OBC) over recent months as companies look at the impact of home working and how to operate most effectively. This is not a new concept though. Research done as far back as the 1970s indicated that focussing on the outcomes of work rather than the activity led to higher performance. However, there has been a limited amount of companies who have adopted this practice, perhaps because it’s such a significant shift to make. Consciously changing the culture of an organisation requires genuine buy-in from every member of the team and takes a lot of time and effort from leaders. It may in fact be one of the biggest challenges you face as a leader, but it can also be the key to your success.
For many organisations, it may be that now, following the enforced changes since March, it is actually the time to adopt a new culture. COVID-19 has resulted in a universal shift from office work to working from home. Even with lockdowns lifted, very few companies are rushing to get employees back to their desks and the ‘remote hybrid’ model, where workers are spread across office, home and other remote locations, looks like being the predominant way of working for 2021 and potentially much longer.
Many companies have adhered to a culture where the presence of employees determined the value of work. Being visible in the office was a measure of effectiveness and showed the willingness of an employee to do their job. This culture resulted in presenteeism; the practice of employees being present at work when they’re disengaged or feeling unwell and even though the employee may physically be in the office, they may not be able to perform to their best ability.
Where it was important to see employees physically in the past, the challenge of modern working is that it simply cannot be done anymore. It’s not possible for managers to be watching their employees at all times and base performance solely on attendance or visible activity. Research is highlighting the problems this is causing. A Harvard Business Review study in July which showed that 40% of supervisors and managers expressed low self-confidence in their ability to manage workers remotely. Clearly some changes are needed and an outcome-based culture can be the answer.
Foundations of an outcome-based culture
There are a few core elements that you need to have in place before making a shift to OBC.
Firstly, a high level of engagement from employees is necessary. The cultural change will naturally give more flexibility to employees, but it also places more accountability on them as it’s not OK to simply ‘show up.’ Any disengaged employees will not welcome a change like this and will struggle to adapt, so it’s important that each employee can engage and adapt to the new culture.
Secondly, it’s equally important that leaders have trust in their employees. The role of the employee will now be focused on their output and not on their presence, so it’s a matter of trusting your employees to achieve their objectives, even if they are remote working. The reality is that this lack of trust is one of the key factors that throttled the level of remote working for many companies. Fortunately, the enforced change seems to have changed the minds of most Execs who are now able to trust that people will do their best work without being watched.
The third element is having a clear purpose, vision, mission and values. When you leave people alone to get on and achieve outcomes, there is inevitably more reliance on their judgement. The framework to support them making the right calls for the organisation comes from people knowing why it exists, where it’s going and how it will get there. With everyone on board with the same goal, OBC can thrive.
How to make it work
If you’re going down this route, or are on it already, then consider these essential ways in which you need to operate.
For leaders, perhaps the most important part of the process is defining the outcomes that need to be achieved. These must be crystal clear and communicated effectively, otherwise everything fails. Once these outcomes are defined, the next step is to ensure employees have the right qualities to achieve these outcomes and are aware of the necessary steps to take to reach this success.
Resource allocation is another vital task of the process, by allocating the right talent to each task. This means maintaining a current skills map and a strong learning and development function to fill the skills gaps. It’s worth considering an ‘opportunity marketplace’ to open up how resources get matched to objectives. This is likely to be more effective than relying on managers to make every call as not having this element caused one of the most famous OBC examples, Best Buy’s ‘Results Only Work Environment’, to fail and be scrapped in 2013.
Alongside finding the right talents for employees, the role of a manager will also change in an outcome-based culture and effective training needs to be in place, so they develop the skills to operate as coaches rather than overseers. This does change the type of person who will perform best in a management role and that needs to be factored into talent development.
What to watch for; maintaining innovation and strengthening values
The result? Everyone is more productive, efficient and happier.
With this way of working, as with any other, there will always be concerns and challenges. One specific risk is that innovation can be compromised. As people are constantly focused on achieving outcomes defined by leaders, this can negate ‘blue sky’ thinking and the serendipitous creativity that comes from just hanging out together. There are ways of addressing this such as those we covered in our ‘What does the future hold for Sales?’ blog and leaders must build these factors into the way of working.
Separate to this, your organisation’s values need to underpin everything in an OBC model. Otherwise, there is a risk that as people focus on outcomes they can slip into an ‘end justifies the means’ mentality. Revisit and restate your values and build a way of assessing how people uphold these within your performance measurement of individuals.
What’s at stake?
Outcome-based cultures encourage employees to achieve well-defined outcomes in a way that works best for them. Get this right and the benefits are significant for your people and your performance. Everyone is more productive, efficient and happier.
At Future Worx, we are helping leading enterprises around the globe reimagine and deliver their workplace of the future and culture is an essential component of this. We can help you assess your current state and co-design what the optimal model for your organisation looks like for years to come. If you want to discuss how we can help your organisation, then contact us to arrange an initial discussion. We can help you, to help your people thrive.