“What does success look like?”
Brene Brown called it “Paint done for me.”
Jim Collins calls it a Big Hairy Audacious Goal.
John Doerr calls it Key Results in the OKR framework.
Stephen Covey calls it Begin With the End in Mind.
Agile calls it Definition of Done.
A common pattern I see among new leaders is a lack of clarity in what creates a successful outcome. Many of us lack a connection to our final destination.
Here’s the rub, though. Leaders that lack a clear vision for success tend to create bottlenecks and rely on their subjective viewpoint (their experiences, their biases, etc.) to gauge success—meaning all work must run through their brain filter for approval. And while this can work in small teams, it quickly breaks down as organizations scale up. When’s the last time you caught yourself thinking “I should have done it myself,” “Maybe this person isn’t cut out for it,” or “why can’t my team just ‘get it’”?
Without a clear definition for success, we:
- Waste our time with too much back-and-forth. We are unclear about what we want. We “know it when we see it” and rely heavily on subjective feedback that bottlenecks the organization.
- Find it difficult to drive results. We focus on all the tasks—not the outcome.
- Lose trust in our team. We think the team isn’t “focused on the big picture.”
You may not want clarity over your intended outcomes, or you may not care for a long-term vision—that’s okay too, but it comes with certain trade-offs:
- You don’t know what you want, so the company relies on you to clear up miscommunications (time intensive!).
- You may end up building the wrong thing, potentially to great dissatisfaction to your life.
- You may unintentionally mislead employees about the company you’re trying to build.
So how can we measure success? There are two main ways: 1) metrics (these are quantifiable, measurable data), and 2) conditions (qualitative, subjective criteria).
I recommend leaders choose some of the examples from this list, but not all; engage your team to refine this list down to the top 3-5 metrics or conditions for your situation.
Success defined by the customer
Is your product or service actually helping the customer solve a problem? When customers are successful, often our business becomes successful. A few ways to measure customer success:
- Customer outcomes. What are the goals of the customer? These can be called “jobs to be done.” What is the customer trying to do, and is your solution successfully helping them accomplish it?
- Acquire new users?
- Increase their Twitter followers?
- Decrease homelessness in their state?
- Organize and manage their contacts?
- Be entertained?
- Customer feedback. What are our customers saying and doing?
- Customer satisfaction score (CSAT). How satisfied are they with the product/service?
- Net promoter score (NPS). How likely are they to refer the product/service to a friend or colleague?
- Likert scales, a quantified way to gauge agreement to a statement. These are “strongly agree” to “strongly disagree” scales.
- Open-ended questions, a way to get a verbatim response in the words of the customer.
- Observable behaviors, specific behaviors you define that indicate success in your industry. On-time payments, frequency of log-ins, time on the platform, repeat order size, email opens, attendance, engagement.
Success defined by business performance
Financial performance tends to be the de facto way to measure success as business operators. Many KPIs eventually tie up to a financial metric. A few examples:
- Revenue or revenue growth, a way to measure sales and sales growth, often month-over-month, for a specific product, service, business unit, or entire company.
- Customer count or customer count growth. Could be measured daily (like daily foot traffic in your store), weekly (like weekly acquisition and onboarding of new users), monthly (like monthly net client growth), or more (like the number of companies we invested in).
- Profitability. Could be defined as unit-level profitability like gross margins, reaching a “Profit Per X” target (from Jim Collins’ Hedgehog Concept), or overall EBIDTA.
- Budget target. Are you hitting a specific budget within a tolerance range?
- Customer lifetime value (LTV). What’s the total revenue that a customer will generate before churn? This can be segmented by average transaction size, transaction frequency, etc.
Success defined by teams
Each team may define success with a more specific list of metrics and conditions. Teams may have an absolute metric they aim to maximize, and an efficiency metric they aim to optimize.
- Marketing teams. Metrics like traffic or leads generated, acquisition costs, # active channels, conversion rate, subscriber count.
- Sales teams. Metrics like number of closed deals, close rates, net new revenue, upsell rate.
- Product/customer teams. Metrics like measuring customer outcomes, engagement, DAU, support ticket volume, NPS, retention/churn.
- Operations teams: Metrics like production capacity, gross margin, CSAT, retention, billability, etc.
Success defined by our gut
With the right quantifiable indicators leading us toward success, we can now turn back to our internal compass and get a “feel” for how things are going.
- Checking in with ourselves. We can think of our own gut sense as one measure. For some, this is the only measure. For others, it’s one of many measures. For yet more, this is not a measure at all.
- Color score / stoplight. A simple report of “green yellow red” can capture self-scores. Aggregating this data across a team may indicate a simple picture of “how its going.”
Success defined by an internal process
Checklists are the quintessential definition of done. In other words, we’re not done with a project until our Definition of Done is completed. Some basic examples:
- Uses branding or style guide
- Has specific format or structure
- Uses specific language or voice
- Survey completed
- Approval received
Some tips:
- Remember, we’re choosing some of these examples, but not all. Refining to the top 3-5 most important success criteria is pivotal to create clarity. Engage your team when deciding how to define success. Your team likely holds all the relevant information to define success, so it’s imperative to rally their participation and support in this process.
- Operationalize it. (Yes, I said it.) Put this into practice by building your operations around it. Align goals and incentives to it.
- Be open-ended about the how. With a clear vision for success, we can be more open and creative with the process to create it.
If you give this a shot in your business or on your team, reply to this email to let me know! What worked well? What will you do differently next time? Don’t worry if you feel like you got something “wrong.” Change and iterate. It won’t be perfect on day one.
The goal is to help you better see what criteria are true and false to gauge success, so you can support and train others to focus on the goal.
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