What is business without money?
Over at HarvardBusiness.org, Jeff Stibel has written an article called 7 Things This CEO Hates About Business. Near the top of his list, somewhat surprisingly, is:
2. Money. If it weren’t for all the money involved, business would be a lot more fun! Making money should be secondary. Money comes when you stop thinking about creating wealth and start thinking about creating value. We all joked when money was “secondary” during the dot-com days…then cringed during the dot-com bust. But the truth is, most of those companies that put money second did better than the ones who focused first on making money. Just compare Google, Amazon, and eBay to Lehman, Citi, and Wachovia.
But reading what he wrote, and thinking about what he seems to be saying, he’s not so much talking about money as he is about the shallow, cynical pursuit of money, which for our purposes might be called ‘anti-idealism.’
Because hey, there’s nothing wrong with money. It’s a useful way to think about success, although it is of course only one measure of success.
It’s just that it’s such a boring measure of success. It’s a single dimension. One-dimensional metrics, like revenue, orders, customers, units, and so on, are useful as far as they go, which is generally as crude barometers of overall patterns in a business. But as Stibel is saying, it’s far more interesting to think about value. Or any other more abstract measure that requires multiple inputs to calculate.
Think about how Jim Collins pointed out that the Good to Great companies all had unique KPIs that aligned with their “hedgehog concept,” or differentiated position. How much more interesting would business be if, starting today, no one was allowed to measure success by single dimension metrics anymore, but instead had to determine a metric that would reflect their company’s guiding principles and passions — and this would become the metric that shareholders would hold them accountable to, and employees would strive to influence.
How much more interesting, and how much more rewarding would business be?
Does your company know its metric? Why not set some time aside today to decide on it?
via 7 Things This CEO Hates About Business – Conversation Starter – HarvardBusiness.org.
