Outcome Management: An Interview with Larry Womack

When I first started my technology company with Bobby Bradley in the ’90s, we had the great privilege of meeting with Larry Womack, business consultant and author of Outcome Management. That meeting and his book provided us with priceless insight and advice.

Larry agreed to answer some questions about his book and his consulting work. Our conversation is below. 

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Jay: The subject of your book and your counseling is on the subject of outcome management. Can you summarize how you define that for folks who haven’t read your book and/or haven’t encountered the term before? 

Larry: Dr. W. Edwards Deming, father of the quality movement, said that managers just manage outcomes. People should manage themselves. I studied with Dr. Deming and embraced his philosophy, but not all his suggested practices. Outcome management is determining a desired outcome and managing toward it. It is managing from the future instead of for it. 

Jay: You may recall having a counseling session with Bobby Bradley and me when we were launching Computer Systems Technology (CST) a number of years ago. I have shared with a lot of people how important that session was to the ultimate success we had growing CST over the years. You shared with us that day that we should never go into any meeting without first contemplating what outcome we wanted. You also advised us to have a focus on the meeting attendees’ expectations. Can you expand on that with your current advice on that subject?

Larry: Most meetings become “pooling ignorance” to achieve compromise. A meeting should have a single purpose: to inform, instruct, gather data, or celebrate. Everyone should know the purpose of the meeting beforehand (agenda), its length, and its desired outcome.

MEETING GUIDELINES

• Each meeting must have an agenda. Participants must receive the agenda before meeting. 
• The agenda should include: Warm-up, Topic list w/timeline, Purpose of topic–discussion, decision, information.
• There must be a designated facilitator, timekeeper, minute-taker.
• There must be no interruptions.
• There must be a next-action list (assignments).
• There must be an evaluation of the quality of the meeting. 
• The minute-taker will provide all attendees with handwritten, emailed, or typed copies of the minutes within two hours of the meeting’s conclusion.

Jay: In the opening sentence of your book you state that, “The book is about attitude and leadership.” You further state, “It’s about the convergence of vision, work, and accomplishment.” Can you share your thoughts on how business owners and current leaders can grasp and internalize these thoughts?

Larry: The lines between life, work, and recreation are disappearing for leaders and followers. The pace of decisions must quicken and rewards must be appropriate:

REWARD ACCOMPLISHMENT

Leaders should be rewarded for the accuracy of their predictions, the wisdom of their visions, and the quality of their empowerment⎯providing everyone with the knowledge, information, tools, and culture required to achieve the desired outcome.

Managers should be rewarded for the success of their efforts in translating the plans of leaders into meaningful work and managing those plans to fruition. 

Workers should be rewarded for the quality of their work based on predetermined expectations.  

If the operating style of the company requires collaboration, the rewards and incentives must be based on collective, not individual, performance.  

Workplace expectations regarding character, relationships, and behaviors must be clearly expressed and consequential.  The behaviors that leaders and managers allow are the behaviors they get.  To ensure appropriate behaviors:

• Provide clear instructions.
• Accept only value-added work.
• Remove undesirables.
• Punish misbehaviors.
• Correct misunderstandings.
• Recognize milestones.
• Reward accomplishments.

Managing effective outcomes requires expectations of leaders, managers, and workers and a demand for adherence to those expectations from everyone.  

Though salaries and other compensation for leaders should be based on the accuracy of predictions and the effectiveness of plans, compensation for workers is another matter. Workers have little control over the success or failure to meet goals. It should be determined in advance what value a worker must add to the final outcome. The worker should then receive compensation for what is expected of him or her.  

Performance reviews should be used only to assess past work for the purpose of improving future work. Salary increases should be based on the value that one is expected to add to the future products, not on the value added to past work. 

Outcome management is managing FROM the future instead of FOR it. Click To Tweet

Jay: You mention in the book’s preface that, “The lines that separate science, the arts, technology, emotions, and commerce are converging.” Given the stress of leading and growing a business in this competitive environment it seems business leaders would appreciate your insight into that convergence as well.

Larry: Any leader who does not embrace the convergence is already lost.

Jay: In the introduction you state that the five basic factors that affect business success are: the wants of the customer, the business ecosystem, the company’s structure, strategies, and attitude. Since business environments change over time, is that what you mean by “business ecosystem”? If so, how can we gain insight into “the business ecosystem”? Have you seen optimal “business structure” change over time and what advice would you give business leaders relative to structure now?

Larry: Form follows function. The organization is the form. The business, the function. For an organization to be successful the form must be flexible and everchanging. 

Jay: You write about “Leadership Mettle.” You state that the guiding principle for leaders in an “outcome management” environment is to: dream before you think, think before you plan, and plan before you act, and that it demands a “stamina of spirit, courage of conviction, and leadership mettle.” Do you feel that the definition of leadership mettle has changed over time or is it unchanged and basically timeless?

Larry: A manager, according to the Handbook of the American Management Association, is one whose power is derived from the position he or she holds and who is accountable for achieving organizational objectives through the actions of subordinates.

Behavioral Scientist Bernard T. Bass defines leadership as “the observed effect of one individual’s ability to change other people’s behaviors by altering their motivations.”

Leadership, therefore, is something one assumes.  Management is assigned by others or by the system. Both are important to a successful enterprise and are not mutually exclusive.

There is a popular notion being circulated through the latest business books and articles that a manager is the direct opposite of a leader. This notion suggests that managers and leaders sit at opposite ends of a continuum, with leaders at the preferred end. The manager is portrayed as the caterpillar, the leader as the more desirable butterfly.

During the past three decades, however, business in general tilted toward a preference for “manager types” to serve as CEOs of companies. In the old seller’s market (as opposed to today’s buyer’s market), success was often derived through manager behaviors like control, formality, conservation, and analysis.  The new notion suggests that managing is no longer effective and must be discarded in favor of leadership.

I’ve found that success in business requires a balance of both leadership and management. The manager is the stone and the leader, the fire.  Both elements are necessary to forge a successful business venture in the Outcome Management environment. It is our contention, however, that because many who sit in positions of authority gained their position in the old seller’s market, the notion of leadership-over-management is being overemphasized and that this overemphasis is often a turnoff to the very persons who need to hear the message.

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Larry Womack’s above conversation and points are very important for today’s business owners, leaders, and managers. What techniques have you used to gain your desired outcomes from a meeting or discussion? How do you think you might employ some of Larry’s advice? Let us know in the comments below.

(Larry Womack is an author and pro bono strategist whose book,  Outcome Management, became required reading in twenty-five university business schools once it was published in 1996. He is also an entrepreneur and has worked with numerous clients including Procter & Gamble, Lamar Alexander, and Jockey International. Read more about Larry at www.LarryWomack.com.)