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Activity vs Outcomes: Lessons from a Construction Site

As a long-time VC I could have filled every hour of every day with pitches from entrepreneurs.

calendar icon May 19, 2017

In my early 20’s I worked on a construction site building a large hotel and shopping mall. On the first morning I got right to work and quickly started to break a sweat. I wanted to show others that I was there to get stuff done. A few hours into the day one of the older workers came by to introduce himself. After some small talk, he said “Hey kid, one more thing. Don’t work me out of a job.” It didn’t take long for me to understand and see evidence of what he meant. Everyone looked busy, but in small ways they made sure that things didn’t get done too quickly. Piles of building materials would get moved back and forth, projects required extra touches here and there and work mysteriously had to be redone.

Fast forward six weeks and the site manager got fired. The message was sent down the ranks. “Get the work done or find another job”. Ever since then I’ve thought about the difference between being busy and getting stuff done, or in other words activity vs outcomes.

As a long-time VC I could have filled every hour of every day with pitches from entrepreneurs, but the reality was that I only made a few new investments each year. All those meetings would waste both my time and that of the entrepreneur. Now heading up Startgrid as CEO and Founder, I find myself focusing on this issue again. I generally ask every innovation team that we meet with how they measure success. Sometimes KPI’s are laser focused on concrete outcomes like revenue growth, developing new products and markets, cost savings and faster product cycles. But just as often KPI’s are activity-based, such as the number of startups they met with last month.

I’ve come to view responses to the KPI question as a litmus test on the maturity of an open innovation program. Early in the process of sourcing external innovation, it’s all about building relationships and a network, so KPI’s like number of meetings make sense. But as programs mature, and the expectations of executive sponsors increase, they move to outcomes-based measures.

It’s not necessarily that the more mature teams are less active. In fact, most of them have more scouts, more innovation labs and more external partnerships. They’re also no less creative or “out of the box”. It’s just that they tend to be focused on how those efforts are generating results that meet the overall goals of their enterprise. And they obsess over measuring those efforts with the right KPI’s and finding opportunities for continuous improvement.

It’s those teams that we learn the most from. And I’m pretty sure that they’re not worried about working themselves out of a job.