From Twitter to SnapChat, many of the most recognisable corporations in the world are making virtually no profit. Square, FedEx, and Amazon aren’t just industry giants; they also weren’t able to make a dollar for five years. That hardly makes them unsuccessful businesses — rather, key success measures have changed. Organisations across all industries are finding that they need to develop their reach before moving into profitability and that, indeed, they may not be moving towards traditional monetisation schedules at all. It’s possible for an organisation to make money for shareholders without making money for itself — and it’s also possible for a business to grow dramatically without income.
Customer satisfaction and brand reputation
Customer satisfaction is one of the most critical success factors for a business — and for good reason. It takes time to build faith with your customer base, while losing faith can be accomplished overnight. Profit can be built internally, but turning around the public perception of a brand takes a good deal of outreach. A business must be focused on meeting customer needs and managing how its brand is perceived by its customers. A single, from Qantas to McDonald’s. Mitigate this potential damage by keeping track of public sentiment, and by measuring customer satisfaction following interactions.
Company culture and employee retention
Do your employees work hard for your business? Are they likely to stay with your business or do they already have one foot out the door? Employee culture and satisfaction is a key component to the longevity and sustainability of a business. Employees are more likely to achieve high productivity when they find meaning in their work, feel their contributions are valued and feel their job utilises their strengths and talents. Moreover, high employee churn ultimately leads to high costs and poor customer care.
A satisfied employee won’t just be more productive, they will also work to improve their organisation through innovation. They will go above and beyond for customers and management, and will therefore be able to improve upon the company’s overall reputation.
When it comes to a scientific study, the study itself is only as important as the accuracy of its data. Studying company success is no different. If you cannot successfully manage and analyse your data, you won’t be able to determine whether you’re moving toward or away from success. Knowledge management systems are designed to track and analyse indicator metrics, thereby making it easier for an organisation to learn about itself. Without appropriate knowledge management, a business cannot know whether or not it is truly successful.
Knowledge management comes from internal discipline, processes, and continually evolving strategies. Businesses must be willing to audit their knowledge management processes, adjusting it as they go. They must be able to utilise their performance metrics across all levels, from employees and management to logistics and shipping, and must be able to create real and actionable conclusions from their reporting.
Digital return-on-investment and customer acquisition
Twitter, Facebook, and even Uber — the key to their success isn’t measured in profitability, but rather in customer acquisition. These businesses may not be making tremendous profits, but they are scoring revenue, by managing their advertising return-on-investment and by expanding aggressively into new markets. This is quite a different world than what the C-suite may be accustomed to.
Businesses today need to consider not only their revenue streams but also their potential for supporting new growth. As they continue to expand, they also push out the competition. Sometimes breaking even is all they need to do; in fact, some businesses like Uber are willing to operate in the red for some time with the knowledge that they can outlast the competition.
This is where customer acquisition becomes important. As long as a business is acquiring customers it is building value. Customers themselves have value, as it is possible in many ways for the customer to become the product.
Social media and brand awareness
Modern businesses rise and fall based on their social media presences. A social media presence can suddenly bring a business back from the brink of death; as well, it can close the casket on a thriving business that has taken a highly visible misstep. Social media is everywhere; information about businesses can propagate like a flash fire. It’s your job to make sure that information about your business is positive, and that if anything goes viral, it’s marketing.
Brand awareness, in and of itself, is a measure of success. A highly recognisable company name has intrinsic value, even if the company has not reached profitability. Investors will look upon a business favourably if it has built out its influence in this way. There are many businesses that have been able to build their social media reach and brand awareness while still being pre-revenue.
Modern organisations are looking at a substantially different landscape than before. They must be willing to measure success differently, in a world in which businesses are often building value without building their financial performance. By exploring alternative methods of success scoring, businesses can focus on what they do best — building value for their shareholders.
TEC: The Executive Connection
Disruption is going to continue occurring, and business is going to change dramatically even in the next ten years. Mentorship and connections with colleagues can help in navigating this difficult terrain. With TEC, you can connect with like-minded individuals throughout the world, learning about trends, and growing as an executive with the advice and direction of others.