A field guide to outcome contracts
How to write a transformation contract that stays in scope and stays measurable.
Most contracts measure activity
Hours billed. Deliverables produced. Milestones reached. None of these correlate strongly with whether the customer’s P&L moved. Outcome contracts attempt to measure the thing that actually matters.
The two-line outcome
Every outcome contract opens with two lines: the metric that will move, and the window in which it will move. “Loan decisioning time will fall from N days to M minutes by Q4.” Every other clause exists to support those two lines.
Skin in the game
A meaningful portion of the fee is contingent on the metric moving. Not all of it — the engineering still has a fixed cost — but enough that both parties feel the outcome.
Joint measurement
The metric is measured by a system both parties trust. We co-instrument it from week one. Disputes about whether the metric moved are 90% prevented by transparent instrumentation.
When not to use them
Pure platform engineering. Pure infrastructure. Anything where the measurable outcome is too far downstream of the work being done. In those cases, fixed-fee with explicit deliverables is more honest.
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