What is Output Management?

The general aim of businesses is to make profit. Profit arises by producing and selling a product or service. Within this framework, output management can be summarized as the process of:

  • Planning the outputs,
  • Carrying out the activities required to achieve them,
  • Producing the outputs themselves.

For example:

  • The outputs of a car manufacturer are cars and spare parts.
  • The outputs of an engineering firm are its designs.
  • The outputs of a company’s sales department are its turnover and profit.
  • The outputs of an educational institution are its graduating students.
  • The outputs of a software team are the software products they develop.

As can be seen, the purpose of all management activities is to reach some kind of output. This is the very foundation of business.

Three Common Approaches to Output Management

In practice, output management is usually carried out in three different ways:

  1. Focusing only on the quantity of current outputs,
  2. Focusing on the quantity and quality of current outputs,
  3. Focusing on the quantity, quality, and the short/medium/long-term impact of outputs.

Let’s explore these through examples.

1. Focusing on Quantity

Here, management activities emphasize the number of outputs and the speed at which they are produced.

  • How fast is the sales team selling?
  • How expensive are they able to sell?
  • How quickly can the factory produce product X?
  • How much can the factory cut costs?
  • How quickly does the engineering team complete designs?

Other parameters are often assumed to be irrelevant or implicitly considered by individuals. Don’t dismiss this as too shallow a management approach — if you’ve ever asked “How long will this take?”, you’ve already leaned toward this mindset.

2. Focusing on Quantity and Quality

This approach is more advanced, because it doesn’t stop at counting and measuring speed — it also considers quality and details.

This is the focus of ISO and similar institutions’ quality and product management standards.

Examples:

  • It’s not enough to look at how quickly or at what price the sales team sells. You also consider customer satisfaction and whether communication with customers is accurate and sufficient.
  • It’s not just about how quickly/cheaply a factory produces product X, but also whether the products are consistent and high quality.

Most medium- and large-scale firms already manage outputs at least this way. In fact, without considering quality, companies struggle to grow and scale sustainably.

3. Focusing on Quantity, Quality, and Future Impact

This approach not only considers the present but also attempts to anticipate, plan, and shape the future.

Examples:

  • A sales team’s speed and prices are important, but will this damage future customer relationships? Will market share be lost? A salesperson who sells three times more than expected may not be a hero; maybe they’ve pre-sold to future customers, or maybe buyers had urgent needs and accepted high prices they won’t accept again later.
  • A software team that delivers a project on time looks successful. But if they achieved this by working overtime and weekends, that’s a red flag. In the short/medium term, the team may burn out or dissolve, jeopardizing both the next product and the maintenance of the current one.

Very few companies manage outputs this way, because it requires not just output management, but also results and impact management.

A More Advanced Method

To address these challenges conceptually, the OECD (2002) defined:

  • Output: The direct products and/or services of an activity.
  • Outcome: The short- and medium-term effects expected from those outputs.
  • Impact: The indirect/direct expected or unexpected consequences of outputs and outcomes in the medium and long term.

Examples:

For a parcel locker manufacturer:

  • Outputs: parcel lockers, spare parts, support services.
  • Outcomes: increased efficiency of postal delivery, higher customer satisfaction, growth in e-commerce.
  • Impacts: even purchases not traditionally made through e-commerce begin to flow through parcel locker channels.

For a programming training institution:

  • Outputs: certified students, online video courses.
  • Outcomes: rising demand for training, more specialized course demand.
  • Impacts: certified professionals succeed, certification becomes a hiring requirement.

From this perspective, many managers already implicitly operate at these levels. Senior managers are often expected to manage at the impact level. Is that correct? Both yes and no.

The manager’s basic responsibility is first to define the intended impacts. Every activity will naturally generate expected and unexpected effects. But defining expected impacts clarifies the organization’s intentions, and these intentions must be communicated downward.

Example:
You said, “Design me an apple.” The team delivered a seedless apple. But you sell seed oil! You should have specified that the expected impact of the apple project was to support your seed oil business. Instead of directly describing outputs, it’s better to start with medium/long-term expected impacts and then communicate them.

Once impacts are defined, outcomes must also be specified. Otherwise, nuances in the manager’s intent may be lost further down.

Another example: An ambitious entrepreneur tells their team to design an electric car. The team delivers a well-made electric car, but they used off-the-shelf drivetrain components, with no engineering innovation. Yet the entrepreneur actually wanted R&D in those areas to leapfrog competitors in the next model. If outcomes and impacts had been clearly shared, the team would have known — or at least could have warned about costs, leading to a more feasible plan.

To Manage Outputs Effectively

To avoid being limited to short-term quantity/quality:

  • Define medium- and long-term expected impacts
  • Define short- and medium-term outcomes
  • Define outputs

The manager or management team must clearly articulate these. This way, outputs will align with the intended vision. If instead you just say “I’m the boss; I say build an electric car, the team will figure it out” — good luck!

Conclusion

One last example to emphasize the importance:

  • You’re a defense company producing missiles.
  • You give your project team a requirements list.
  • They plan, cost it, design it, and deliver your missile.
  • But: zero R&D, zero engineering gain, because they solved it using only off-the-shelf parts.

Instead:

  • You first define your medium/long-term expected impacts aligned with corporate vision.
  • Then you define your short/medium-term goals and outcomes.
  • Then you give your requirements list.
  • The team plans cost/time and reports how they’ll achieve the outcomes and impacts.
  • You review this before approving.
  • They design the missile.
  • Thanks to R&D and product development gains, your missile becomes the best in the market — or your next one will be.