Success is a popular idea for a reason. Feeling successful is a great feeling, whether it comes from being recognized at work with a raise, more visibility within your company, or from your partner or child telling you how much they love and appreciate you.
We can feel like our accomplishments are insignificant compared to what we hope to achieve. Sometimes, it can feel like we’re not making any progress at all, even though we are. What’s more, success is likely to mean different things at different times in our lives. For example, you may feel envy when your friends achieve certain milestones before you do, or when you see coworkers being promoted while you have been passed over.
Although success is always changing, you can stay motivated and achieve your goals by measurement success in a way that works for you. This article is about finding out what defines success, how to measure it in your personal and professional life, and what metrics can be used to help with this measurement. We’ll also talk about how you can prioritize success by using effective strategies.
How do you measure success?
There are many different metrics for success. Some people may gauge their professional success by how much their company has grown since they joined it. Others may see themselves as more successful if they have maintained or increased customer satisfaction rates. It can be measured in terms of recognition, such as being given more responsibility or being asked to lead a project. It can also be measured in terms of satisfaction, such as feeling proud of your work or enjoying increased job satisfaction. success can be measured in a number of ways including financial compensation, being given more responsibility, or increased job satisfaction. Employee satisfaction, business goals, and key performance indicators can measure the success of a business.
Performance assessment by business executives can be similar to how old-time baseball scouts gauge performance by developing a feel for which statistics are most important. Although the Oakland Athletics’ scouts used a metric to choose players that didn’t predict whether the players would score runs, as Michael Lewis describes in Moneyball, the team discovered this. They had been measuring the wrong thing, and executives may be making the same mistake. The study found that people who spend a lot of time on social media are no less happy than those who don’t.
Although EPS growth and sales growth are popular performance measures, theory and empirical research show only a weak connection between them and value creation. Executives tend to hold onto metrics that they are confident in, even if they are inaccurate. They do this because they trust their gut instinct, they misunderstand the causes of events, and they are comfortable with the status quo.
The most useful statistics reliably reveal cause and effect. The two defining characteristics of a good statistic are that it is persistent and predictive. This means that the statistic will produce similar results at different times, and that there is a causal relationship between the statistic and the desired outcome.
To select the most appropriate statistics, you must first identify the primary goal, then consider both the financial and non-financial elements that impact that objective, and finally determine which employee actions contribute to those factors. You must also regularly reevaluate your metrics. Value creation drivers change over time, so your statistics must be updated regularly.
Considering Cause and Effect
What question am I trying to answer? and What data do I have? In order to figure out which statistics would be useful, you need to consider what question you are trying to answer, and what data you have available. First, what is your objective? In sports, it is to win games. In business, it’s usually to increase shareholder value. Second, what factors will help you achieve that objective? What activities will help to increase shareholder value?
What you want are statistics that will show you what causes what. The two defining characteristics of statistics are that they are persistent and predictive. This means that statistics can be used to reliably predict the outcome of an event, based on the past behavior of similar events.
Statistics that assess activities requiring skill are persistent. If you measured the performance of a trained sprinter running 100 meters on two consecutive days, you would expect to see similar times. This would be an example of something you would expect to see. Reliable statistics that can be controlled through skill expose causal relationships.
It’s important to distinguish between skill and luck. Think of persistence as occurring on a continuum. When the outcome is based purely on skill, it is very consistent. Some success is due to hard work, but some is due to luck, so people don’t persist. The outcomes of spinning a roulette wheel are random and have no correlation to the previous or subsequent spins.
All this seems like common sense, right? However, companies frequently depend on data that is not very reliable or accurate. Since these metrics are widely used and don’t show cause and effect, they aren’t useful for coming up with a strategy or even achieving the goal of earning a return on investment.
There is a process for choosing metrics that can help you understand how your company is performing and how different factors affect it. This can help you make decisions about what to change or improve. I will explain the process in a simplified way using a retail bank as an example. This bank is based on an analysis of 115 banks by Venky Nagar of the University of Michigan and Madhav Rajan of Stanford. For the moment, forget about the metrics that you use or that Wall Street analysts or bankers say you should use. You should start with a clean slate and then follow these four steps in order.
1. Define your governing objective.
If you want your business to be successful, you need to have a clear goal in mind. This will help you decide how to best use your money. A company’s goal should be to create economic value in a free market system. Companies may choose to focus on maximizing the firm’s longevity instead of other objectives. The time horizon over which we seek to create economic value is the next five to ten years. The bank’s goal is to create economic value over the next 5-10 years.
2. Develop a theory of cause and effect to assess presumed drivers of the objective.
Three financial factors that impact value creation are sales, costs, and investments. The financial drivers that are specific to a certain company can include an increase in earnings, cash flow, and return on invested capital.
Naturally, financial metrics can’t capture all value-creating activities. Not only do you need to assess financial measures, but you also need to look at nonfinancial measures such as customer loyalty, customer satisfaction, and product quality to see if they have a direct correlation to the financial measures that create value. As we have talked about, the connection between value creation and financial and nonfinancial measures like these can be different and need to be analyzed each time.
The bank starts with the idea that customer satisfaction leads to the use of bank services, and that usage is the main factor in determining value. This theory links a nonfinancial and a financial driver. After measuring the correlations, the bank determined that satisfied customers do use more services. This allows the bank to generate more cash and create more value. Since customer satisfaction is linked to returns on assets, the bank needs to determine which employee activities impact satisfaction.
3. Identify the specific activities that employees can do to help achieve the governing objective.
The goal is to make the link between your objective and the measures that employees can control through the application of skill. This will help employees see how their work contributes to the organization’s objectives and gives them a sense of ownership and control. There should be a consistent and predictable relationship between these activities and the objective.
The bank has determined that customer satisfaction is a predictor of value. The bank needs to find find ways to make customers happy. According to the study, customer satisfaction is impacted by the interest rates charged on loans, the loan processing speed, and low teller turnover. Since these factors are controlled by employees and management, they are consistent. The bank can use this information to improve its process for reviewing and approving loans.
4. Evaluate your statistics.
You must continuously evaluate the methods you are using to connect employee behavior with the main goal. The factors that affect value change over time, so your statistics must as well. This means that the bank needs to look at how its customer base is changing and what is causing customers to be satisfied or dissatisfied. With the customer base becoming younger and more technologically savvy, the importance of teller turnover decreases, while the bank’s online interface and customer service become more important.
More and more companies are realizing that they could improve their performance if they had access to the growing torrent of statistics, but executives are still holding onto the old-fashioned and often flawed methods for choosing metrics. Companies in the past used to be able to get away with making decisions based on their gut feeling instead of looking at the right statistics because that was what everyone else was doing. Today, using them is necessary to compete. The key to gaining an advantage over competitors is to identify and exploit their weaknesses before they have a chance to do the same to you.
Strategies to measure your workplace success
Success is harder to measure when it comes to personal goals like happiness, but success at work comes with more identifiable key performance indicators. If you’re wondering how you can measure your success at work, here are a few ideas that can help you gauge your progress.
Compare your progress each day
When you’re really busy at work it can be difficult to take a step back and think about what went well and what could have been improved. You can measure your success at work by checking in with yourself every day. Identify what went better today than yesterday. Think about why you didn’t make as much progress today as you wanted to, and plan how you can change that for tomorrow.
Spend time on three annual tasks
In any job, daily deliverables must be prioritized. If you lose track of the yearly goals and achievements that need to be accomplished, it can adversely affect your ability to be successful at work. To stay on track, speak with your manager about the annual targets and allocate a specific amount of time each day to work toward these goals.
Spend time on communication
What makes for a successful conversation at work? Success in the workplace is not just about making your own points, but also about understanding what others are saying. The way your coworkers receive and process information from you is just as important as the outcome of the interaction.
Build workplace relationships
You need to be able to build rapport with your team at work if you want to be successful. If team members are approaching you on their own accord, it’s a good indication that the conversations you’re having are successful.
Do team members come to you for help when they have an issue? Essentially, are they looking to you to do the heavy lifting, or are they coming to you for help and suggestions? Do they rarely interact with you unless you initiate? Make a note of all the times you help out your colleagues at work, and make an effort to be seen as someone who is always willing to lend a hand.
Set meetings with your manager
You probably have a weekly meeting with your manager to discuss your work. It is important to set goals with your manager that are related to your overall performance and career path within the company. If you haven’t had a chance to talk to your boss about your progress in a while, take the initiative to schedule some time to chat.
Utilize peer reviews
If you manage a team, you should allow your direct reports to have a voice in the team processes and the overall dynamic. You should also consider allowing them to have a say in your management style. If your team members do not feel comfortable coming to you with feedback, they may not be able to tell you what could be done better or differently.
Giving employees the option to convey their opinions anonymously can help measure the success of current processes and procedures and help improve team dynamics.
THE PROBLEM: YOUR BUSINESS ISN’T GROWING AS FAST AS IT SHOULD!
Your sales have stagnated or decreased, and you can’t figure out why. Discover what’s holding you back from achieving predictable sales growth in your business.
If you want to grow your business, you need a proven plan and framework. That’s what you get with the 2X Your Sales Discovery Session.
Want to learn about a formula for Predictable Growth that will put your business on a 90-day path to 2X Your Sales?