Is business success intangible?
The outside world measures business success in financial terms. It’s talked about as turnover, or profit, or exit value, or personal wealth, or size of the empire that’s been created. But real success is so much more than that, isn’t it?
When we talk about someone being successful in business, I wonder whether perhaps we’re wrong. Aren’t we imposing our own value systems and sets of judgement on someone else, and actually saying that, if that were me, I’d regard myself as having been highly successful? Surely success is a highly personal matter and, unless they’ve shared their goals with you, we actually don’t know whether they’ve been successful or not?
THE MECHANICS AND DYNAMICS OF BUSINESS
At Zonata, one of the ways we look at businesses is to examine what we call Mechanics and Dynamics.
Many business owners focus on their Mechanics, which are the more tangible aspects of business such as markets, pricing, products, assets, sales, competitors, production/operations, people quality, lead generation methodologies and cash availability. These are of course essential to get right as they are the building blocks without which one’s prospects for maximising a business’s potential are severely limited.
But it’s the Dynamics, the less tangible factors such as attitudes, behaviours, culture, strategy, style, relationships, loyalty and motivation, which are also critical if a business is to be truly successful.
WHAT ARE YOU TRYING TO ACHIEVE?
In my experience, very few people go into business with a goal that’s expressed in financial terms. The vision is more likely to be about creating and delivering a product or service that provides substantial benefit, or to employ and work with some highly talented people, or to provide a level of customer service hitherto unseen in your marketplace, or to be free of managers and being told what to do.
Therefore success cannot be measured in financial terms because, if it’s one thing, success is about the achievement of goals.
THE OUTPUTS OF BUSINESS
That’s why we consider the ‘outputs’ of a business in two further dimensions.
Naturally, like the rest of the world and their bank managers, we look at financial outputs – profits, revenues, growth, return on investment, dividends, salaries and bonuses for example.
Then we look at those outputs that are not measurable in straight financial terms, yet without which, a business is not truly successful in the widest sense. These are what we call the ‘feel-good’ outputs – for example meaning, fulfilment, personal growth, social benefit, environmental impact and fun. Some people may say that’s a bit woolly, a bit wishy-washy. But I would argue to the contrary, because the opposite of fun is unhappiness, lack of enjoyment and negative stress – and there can’t be many businesses that anyone would consider to be truly successful that are like that.
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