Profit alone not a measure of success
“We made $1 million in profit last year”.
Great! Fantastic! Wonderful!
But … could we have made $2 million?
The essence of the question was not really whether we could have made twice as much profit as we did, or even whether we could have made more. Rather, it seeks to draw out some analysis on why that dollar figure was made, if the things we’re doing are right for our target audience, if we are doing the right things, and … whether any of that is related to our stated mission, direction and goals.
Several years ago I consulted on a project creating a system to capture reviews of medical charts of deceased patients who may have been eligible for organ donation. The information gathered was used to do a sort of post-mortem (no pun intended) analysis of the organ bank’s processes and procedures. This information was further used to determine if current processes and procedures were sufficient, or if changes to procedures could have resulted in more organ donations, and, in turn, would have benefited additional patients waiting on organ recipient lists.
From that experience I learned it wasn’t enough to speak of numbers, such as profit, revenue, etc, as the primary means of measuring success. In the organ bank example, it wasn’t enough to simply count the number of successful organ donations procured. The deeper analysis was used to measure success; whether more organ recipients could have been helped.
“We made $1 million profit last year” doesn’t necessarily speak to whether we are meeting our mission and goals as a company. It doesn’t speak to whether we are doing the right things, or whether what we’ve done is sustainable.
Such deeper analysis is critical to a company’s success, vitality and sustainability. Such information should be communicated to employees within the organization, right along with profit, revenue, etc figures, to help guide future innovations and process improvements that can ultimately translate into more dollars (and sense!) for your organization.
