How Do You Measure Success?
We operate in a business environment that, for the most part, is fixated on growth. One that values year over year, double and triple digit revenue increases as absolutely essential to being considered a “successful” company, to not be considered a failure.
In particular, if the organization is funded, that’s almost always a base level expectation. You aren’t being funded to simply create a going concern, you’ve been given a charter to create something transformative, huge, the next proverbial unicorn. (The more prominent the funders, the more prominent this expectation becomes.)
Of course, there’s a place for this mindset, when you’re disrupting a space, growing a nascent market, or fending off a raft of potential competitors in an area where first mover advantage plays a material role in eventual market success. Many great organizations have followed this path and achieved something truly remarkable. So I don’t have a problem with this mentality, per se.
The issue arises when, in that insatiable quest for growth, we lose sight of what the organization is and what it actually represents. When we forget the core reason why the organization was created and what goal it was designed to achieve. (Hint: it can’t be to simply “make money”.)
Because then we begin to lessen our focus on those strategies that service our core customer segment in consistent, satisfying but perhaps unremarkable (in terms of pure percentage growth) ways.
We feel compelled to add additional services and products to the mix because we need added revenue sources to continue to fuel the growth engine.
We become less willing to turn down ancillary revenue opportunities because it adds to the top line, even when they aren’t aligned with the core of who we are.
Or worst of all, in pursuing all of the above, we begin to dilute what we define as our core, in order to grab the next Dollar.
(I haven’t even touched on the broader debate of “revenue-versus-profitability tradeoffs” in this discussion, which we’ll tackle in a future post.)
To be clear, growth is important and I do believe that pursuing growth is a critical mindset to have in any business (and, just as much in life).
But the definition of growth is a relative one and will vary based on who you’re asking. And so it’s important to have your own point of view as to what is appropriate, merited and possible for your space. And that may not be to everyone’s (defined as all key stakeholders in the business) liking. And if that’s the case, that issue needs to be tackled before we do anything detrimental to the business (willingly or otherwise) in order to feed the growth machine.
What’s also clear is that the pursuit of growth must never be done at the expense of what the business is and who it is serving. Every business serves a customer and has (should have) a specific mission. When the growth imperative begins to impede or shift or dilute what the business was designed to do, we need to recognize what we’re doing and why. If it’s a prelude to a pivot, that’s one thing, but more often than not, that’s not the case. More often than not, it’s a compromise, and that’s never a good thing.
My point in all of this is that the definition of success is different depending on who you ask. And while growth is an important metric, it cannot (should not) dilute the basis of the business and who it’s designed to serve.