Outcomes Are Overrated: Build Capabilities That Deliver Every Time

Outcomes Are the Result—Capabilities Are the Key

by Cesario Ramos.

It seems that at Toyota they say, “Improve for improvement’s sake.” The many books on Toyota TPS tell us they don’t focus on quick fixes or chasing short-term goals. Instead, they build systems and processes that get better every day, no matter what. But in my experience—this does not happen that often in most organizations…

Too many companies set arbitrary targets, chase the numbers, and celebrate short-term wins. But then, the same problems often resurface, and they’re left asking, “Why are we stuck firefighting?”

This is where Creating Agile Organizations (CAO) takes a different path.

Outcomes: The Problem With Chasing Numbers

Outcomes like “increase customer retention by 10%” or “reduce defects by 25%” look great on a quarterly report. But here’s the challenge: these numbers are temporary. They reflect symptoms of the system but don’t help fix the system itself.

You might hit your target by running a loyalty campaign or crunching your team to meet a delivery deadline. But what happens next quarter? The retention rates drop again. The defects return. You’re stuck in a causal-loop of chasing outcomes without solving the underlying issues.

Capabilities: A Better Approach

CAO takes a systemic view of improvement. Instead of asking, “What outcome do we want this quarter?” we ask: “What capabilities do we need to keep getting better over time?”

Capabilities are the skills, tools, and traits that allow teams to adapt, deliver value, and solve problems again and again. Unlike outcomes, capabilities don’t disappear once the quarter is over. They grow stronger and make your organization more resilient, more innovative, and more adaptable.

Outcomes vs. Capabilities: A Practical Example

Let’s say your organization sets an outcome: “Increase customer retention by 10% this year.”
The outcome-focused approach might roll out quick fixes—discounts, loyalty points, or aggressive marketing. Retention might improve for a while, but customers leave again as soon as the campaign ends. The underlying problems—poor product quality, long delivery times, or unclear communication—remain untouched. The CAO approach asks: “What capability will help us improve customer retention over time?”

Maybe it’s a customer insight capability: A system for gathering and acting on feedback consistently.Maybe it’s a delivery capability: Improving how quickly and reliably you meet customer needs.Or maybe it’s an experimentation capability: Testing and learning what actually drives retention.

By focusing on capabilities, you address the root causes, not the symptoms. Retention doesn’t just improve for a quarter—it gets better and stays better.

The Benefits of Capability-Driven Improvement

Building capabilities instead of chasing outcomes delivers three key benefits:

It’s Sustainable: When you improve capabilities, you improve how the work gets done, not just the results. Capabilities don’t disappear—they grow stronger over time, making your organization better equipped to handle future challenges. Also the desired capabilities change over time a strategy, market conditions and organisations challenges change. This makes developing capabilities excellent for continual improvement approach.

It’s Adaptable: Outcomes are static, but capabilities are dynamic. The same capabilities you develop to improve customer retention today might help you solve a supply chain problem tomorrow.

It Drives Real Improvement: Teams become more effective at learning, growing, and solving problems. Instead of relying on temporary fixes, they build the tools to create lasting change.