Measuring Success

There’s a business maxim that says “what can be measured can be managed”. I think it’s completely true and, as an accountant, I find that hard numbers are a great way to monitor success (or lack of success). Unfortunately, that business maxim falls short.

Let me tell you a story to illustrate why: This morning I met with a fairly new coaching client who can best be described as a “wannabe” serial entrepreneur. (Yes, he said it’s okay for me to share this story as long as I don’t mention any identifiable facts).

As of this morning, he is running 4 businesses – one is about 5 years old, one is two years old, and the remaining two are less than a year old. He had asked me to work with him because these businesses were sputtering along and not gaining the traction he had hoped.

Our meeting went like this: I asked him to tell me about the businesses he had going. This wasn’t our first meeting so I wasn’t looking for the basics, but rather what activities he had been doing on each one. He got part way through describing his first business when he paused and then launched into another idea he had. He spent quite some time talking about this brand new idea and the effort he had gone into researching and what his plans were to do further research. Slowly, I drew him back to talk about his current businesses but he kept revisiting that idea.

As we went through the various “assignments” I had given him in our last coaching session, it became apparent that he hadn’t done any of the work we had determined that he needed to do to make his first four businesses successful. Instead, he had spent his time managing people and doing a lot of delegatable tasks and thinking about this fifth business. Worse yet, even he admitted that in this most recent idea, he had a hard time seeing how it could be profitable, and yet here he was pursuing it instead of working on the four businesses that were already running and were weakly profitable.

So, to tie this back to that business maxim I mentioned earlier, it might be true that “what can be measured can be managed”, but I’d suggest that “what can be measured and matters can be managed” is better.

Entrepreneurs love new, thrilling challenges and the feeling of starting things is exciting. However, the things you measure in your business should not be related to how much activity you’re putting into the business or how full your schedule is, but rather it should be related to how you define success. In my client’s case, he was defining success as having a handful of profitable businesses that would secure his future. Unfortunately, he wasn’t working toward that measurement.

Related posts:

1. Business success stories
2. Success with Informational Sites – Part 3
3. Success with Informational Sites – Part 2
4. Success with Informational Sites – Part 4
5. Success with Informational Sites – Part 1