Beyond Profitability:
Building Sustainable Success

Another Friday, and you’re wondering where the week went. You worked hard but you’ve got a nagging feeling you may not have focused on what’s most important for your business.

What if you knew the 12–15 things most critical to your success and could get timely updates on where you stand? That’s what metrics do. They give you data to make better decisions about where to focus your time, energy and resources. Good metrics are a simple source of information—not complex, bureaucratic paperwork—on how you’re doing and how you can manage for success.

Focusing on What Matters
Understanding profitability is essential. It’s just not enough. By the time you’ve learned how much money you’ve made, you’re looking at history. You can’t change last quarter’s financial results. Profits also don’t tell you about the other key dimensions that make your business sustainable:

• Are your customers the ones you want?
• Are your operations on track?
• Is your business fitting with the other important parts of your life?
• Are you happy?

Here’s how one of my clients used a very personal metric to improve both his business and his life:

“Brad” had made a dramatic career change from corporate software engineer to massage therapist. He didn’t make as much money, but he earned more than enough to support his lifestyle and was much happier. He frequently used the word “joy” to compare his life to his engineer days, which he described as "miserable." However, when facing income dips frequently experienced by the self-employed, he’d think, “maybe I should get a ‘real’ job.”

By developing a joy index, Brad was able to maintain perspective on the ups and downs of his revenue. He wrote down his level of joy daily on a 5-point scale. When his index slipped below 4 for more than a few days, he’d do something to feel better. For Brad, joy was as important to his success as meeting customer needs and generating income.

Measuring More than Money
Your metrics should reflect what’s unique about your business and you. Think about the activities and outcomes related to customers, administration / operations and yourself that drive your success. For that success to be sustainable, you’ll also want to consider how well the business supports your values, growth and lifestyle. Here are just a few examples:

• Customers / Market – client retention, referrals, customer satisfaction, clients in your target market
• Operations / Administration – returned phone call turnaround times, ease of finding things, invoices out on time, billable time
• Financial – revenue, billable rate, costs, profits
• Yourself / Life integration – professional development, hours worked, stress levels

Getting Started with Metrics
Begin by looking at what drives the success of your business and your life. Brainstorm at least 30 ideas that you can narrow down to the 12–15 most important and meaningful. Then decide how you will measure them and set targets.

For example, let’s say you’ve chosen new clients as a critical success driver. Consider just a few of the many ways you could measure new clients:

• Number of new clients
• Number of new client projects greater than $XX
• Number of new clients from ABC networking group
• Number of new clients in the banking industry
• Number of new clients with potential to provide multiple projects

Learning from Experience
Don’t worry about making your measures perfect. You’ll be better off using a good list than waiting until you think you have a great one! You can even learn a lot quickly by picking the “wrong” ones:

Many years ago, my business partner and I were setting measures for our consulting work with large corporations. We set a target for monthly proposals, thinking that writing them was important to growing the business. After just a couple of frenzied, unproductive months, we realized that we had the wrong measure … and the wrong priority. We weren’t in the business of writing proposals nor was it our strength.

We needed to focus instead on billable work. Our sales strategy changed and our measure became “number of projects obtained without a proposal.” Tracking the “wrong” measure helped us correct our strategy sooner.

Making it Work for You
Defining measures can help you create the success you deserve. Use them to guide when you say “yes” … and “no.” You’ll be better able to maintain a balance across the various parts of your business and among the other important areas of your life.

It’s Friday again. This time you can feel confident that you spent your time focused on what’s most important to the success of your business. Have a great weekend … and a great life!