i“If you don’t know where you’re going, any road will take you there.”
— From Alice’s conversation with Cheshire Cat from Lewis Carroll’s Alice in Wonderland
For business owners intently focused on growing their private companies, it may seem like a waste of time for them to answer how they define success. They may even view it as an unhelpful distraction. But, from my own experience working with business owners, they will benefit from taking the time to respond to this question. In fact, owners who decline to consider their answer to the success question may be in for an unwelcome surprise.
Responding to the success question with off-the-cuff answers like “I just want to grow the business,” “I want to cash out for a large payday some time in the future,” or “I want to hit $50 million (or more) in revenues” fall short. If business owners want to experience satisfaction, a sense of accomplishment, and contentment, let alone happiness, answering the “what defines success” question is a great place to start. This post breaks down the success question into three elements — purpose, relationships and community — that build toward the ultimate answer.
What Is My Purpose?
“The two most important days in your life are the day you are born and the day you find out why.“
— Mark Twain
Let’s start with the elephant in the room – money. When we ask how to define success, many (perhaps most?) business owners equate success in business with money. In other words, money equals happiness, and therefore, making more money equals more happiness. There is research that bears this out… but only to a certain extent and also with an important warning. A recent article in Forbes magazine by John Jennings described this as the “money and happiness” paradox. In his article, Jennings discussed an important psychological study from 2003, which determined that although having more money is associated with happiness, seeking more money dampens life satisfaction and impairs happiness:
[T]he study found that “the greater your goal for financial success, the lower your satisfaction with family life, regardless of household income.” This paradox teaches that money boosts happiness when it is a result, not when it is a primary goal, or as Ed Diener noted in his book Happiness, “It is generally good for your happiness to have money, but toxic to your happiness to want money too much.”
Thus, the potential surprise for business owners is that pursuing success at their company with the primary goal of making a great deal of money is not just unlikely to lead to happiness, it may actually prevent it. That is the paradox noted in the Forbes article. If achieving satisfaction and some level of contentment matters, then making money needs to be the byproduct rather than the primary goal. But if making money is not the main objective, what purpose is more important?
To answer that question, renowned business author Simon Sinek would say, “Start with the why.” That is the title of his best-selling book and his TED Talk that has more than 55 million views. Sinek’s website describes the book this way:
Sinek presents a simple yet powerful idea: the most successful and influential companies and leaders start with the “why” of their business, rather than focusing solely on the “what” and “how.” By starting with purpose and beliefs, companies can create a clear and compelling message that resonates with their customers and employees.
This is the first question for the business owner to answer: Why am I doing this? Having a clear purpose means that the owner will not shy away from challenges arising in the business. The owner’s purpose is the lodestar that keeps both the owner and the company on track and able to surmount these challenges. A business owner who knows the why has purpose that drives the business, and fulfilling the owner’s purpose will help define success.
What Is the Quality of My Relationships?
This question about relationships may be less obvious than deciding on one’s purpose, but it is no less important. We are human beings. We exist in relation to other humans, which is especially true in the business world. People do not succeed or experience success in business in a vacuum. There are two types of relationships for the business owner to consider: those within the company and those that the owner has with family and friends outside the business. Both of these are important and help the business owner to define and experience success.
Inside the business, successful business owners stress the importance of building solid, meaningful relationships. Sam Kaufman, an entrepreneur and a member of the Forbes business council, expressed this powerfully in a recent editorial:
Relationships must be prioritized over results. I know, I know – this is surprising coming from a businessman and entrepreneur, but hear me out. I am not saying results do not matter. Results do matter, and they are crucial to your business’s success and growth.
That being said, do you know what else is crucial to your business’s long-term success and growth? Do you want to know how to drive results? Do you understand why some companies build great teams and others can’t keep a good employee? The answer is relationships.
. . .
Building relationships is possibly the most important skill an entrepreneur can acquire if they’re looking to grow a real company. You need to have the ability to acquire, maintain, nurture and grow relationships. Soft skills are so important and so undervalued. Soft skills like empathy, compassion, accountability and honesty are what drive a team from OK to good and on to great.
As Kaufman notes, developing internal relationships at a company is what grows a team from good to great in achieving results. In my own view, external relationships that exist outside the company are no less important to the business owner. We ask if a falling tree makes a noise in the forest if there is no one there to hear it. I would ask, is success possible for the business owner if he or she has no one with whom to share that success?
Business owners should ask themselves – for whom am I seeking to achieve success? Most owners are self-motivated and want personal satisfaction. But when the owner reaches milestones, receives accolades and wins industry recognition, with whom will the owner share these achievements? From birth, we have a basic human need to be seen and heard. We all want supporters, if not avid cheerleaders. For that support to remain present requires business owners (and everyone else) to nurture relationships outside the business. Thus, in answering the question about purpose, business owners should take stock of whether they have maintained meaningful connections with family and friends who are not working with them in the business.
What Is My Impact on My Community?
The third component touches on purpose but goes beyond it to ask the business owner whether fulfilling his or her purpose is positively impacting the company’s community. Does that matter? If the company is profitable, providing good products or services to its customers, and paying good wages to its employees, does a positive community impact have any role to play in defining purpose? I would answer emphatically that yes, community impact matters to one’s sense of success, and there does not have to be a tradeoff between achieving profits while also generating a positive community impact.
This post will not take sides in the debate regarding the ESG movement, which seeks to promote positive business policies for the environment, society and company governance. The focus here is on whether the business owner believes the company is having a positive impact in the community. A simple way to look at this is to ask whether the business owner is proud of the company and the ways that it conducts its business.
The connection between profitability and community impact is not a theoretical one. Dave Young, a senior partner with Boston Consulting Group, leads his firm’s social impact and sustainability work globally. In an interview in 2021, he said:
“Younger employees consistently rank corporate responsibility at or near the top of their criteria for working at a particular company. This means community actions are key, but not just from a talent perspective.”
When asked why companies should compare about community impact, he stated:
“It’s the connection between community and long-run company performance. That shows up in everything from what kind of brand do I build over time, to the knock-on effects of that brand, to the way my employees feel about the company, with respect to how I am engaging in community.”
— Dave Young, a senior partner with Boston Consulting Group
The point is not to suggest that business owners have to become “corporate do-gooders” to find success. But, if owners choose to disregard the impacts their companies are having on the communities in which they do business, they may find success to be an elusive goal.
Conclusion
Defining success is an individual process for business owners, who will reach different conclusions, but the process is a vital exercise to undertake. Owners who eschew the need to consider their path to success may find themselves lost or overwhelmed on an uncharted road. By undertaking the deliberative process required to define success, business owners will develop a clear sense of purpose, appreciate the important relationships in their lives and fully grasp how their company impacts the community in which it operates.
