A new email acquaintance asked me a fairly profound question the other day, “how do I measure success?” I found myself introspective and realizing that my answer depended on the context of course, but also realizing that my answer has changed with the years.
Recently, I find myself keeping score differently. I’m evaluating my contribution (and measuring success) over the big picture more than I have in my past. I value the movie more than the single frame snapshot. In business, this translates my valuing sustainable growth over simply ‘growth’ at any one moment in time, with the emphasis on ‘sustainable.’
Let me explain why.
I believe that productivity gains through specialization is a wonderful thing, but when things become very compartmentalized, one unintended consequence is that it can distance people from the outcome, or the downstream ramifications of their decisions. When cause and effect become too distanced, we lose track of the true cost of any one action. This, in my opinion, is a bad thing. Much of the default credit swapping that was going on prior to our recent meltdown showed how when you push risk too far from those that should care about it, bad things can happen.
While not a precise analogy, the notion that a factory could produce cheap goods while emitting a lot of pollution showcases the problem. The factory get’s rich, people who purchase the goods benefit from cheaper prices, but those that live in or around the factory bear a health cost that wasn’t fully accounted for in the profits taken by the factory. In effect, the factory has externalized a cost of doing business, making it ‘someone else problem.’ If one measured ‘success’ and only accounted for the profits of the factory, you would say the factory was successful. However, if you measured success and accounted for the factories true societal cost of doing business (bad health in and around the factory), you’d come to a different conclusion.
Fact is, when you measure success over a longer horizon, you’ll notice that it’s harder to get rich quick and not create externalities (e.g. costs) that have to be born somewhere, often times to society as a whole.
Responsible growth is growth that can be sustained.
I respect that.