What defines success? What makes one organisation more successful than another and how has the way the business world views success changed? We asked four business leaders to offer us their definitions of success in our pandemic-dominated world and what expectations this is placing on today’s leaders. By Annie Gray.
Shaun McCarthy, the chair of Human Synergistics Australia and New Zealand, explains that success takes many forms.
“It can be long-term; it can be short-term. It can be global; it can be local. It can be financial; it can be human. It can be in the marketplace; it can be within the organisation itself. It can be quality; it can be safety. It can be customer service. It can be risk management. It can be the organisation’s culture.”
Actually, he says, today it’s all of these and more.
McCarthy says that Human Synergistics International is celebrating its 50th anniversary and back when it started, success was largely viewed in financial terms.
“ROE, ROI, NPAT, EBITDA ruled the lexicon. CEOs of commercial companies were charged with profitability, revenue growth and capital expenditure control. CEOs of non-commercial organisations were held responsible for expenditure control and process efficiency.”
He says that over time reliable metrics were developed to measure product/service quality, customer satisfaction and loyalty, employee safety, risk management, and organisational culture. These were added to the CEOs list of accountabilities.
And in recent years legislation has placed even more emphasis on some of these, he says, pointing to employee safety, and that the threat of being fined and even imprisoned for incidents, has made this top of mind for CEOs and board members.
Recent reports in the media of workplace bullying and harassment also highlight the importance of these ‘non-financial’ responsibilities.
McCarthy says that overall the most important criteria, and it is the umbrella under which all the others sit, is external adaptability.
“The ability to respond effectively to changes in the organisation’s external environment. We’ve always had change. But today’s environment is particularly volatile.”
He says that technology has driven the pace of change. Disruption, be it from disrupting market competitors or disruptive events like Covid, has become the norm.
“So, to me the number one criteria is the ability to read the context, build a resilient organisation and adapt.
“For me personally, success has been building a business that has stood the test of time. Forty three years in New Zealand and 31 years in Australia. This has meant having outstanding people, building effective client relationships and helping make a positive impact in this world of ours.”
The need for greater skills
Allan Pollard, the CEO of West Auckland Trusts, tells Management that business success measurements have changed dramatically in his 25 years of senior management. When he started his management journey it was all about profit.
“Today’s organisations have to grapple with managing and developing superior strategies for their people, the planet and profitability.
“When we just considered profit or financial success in the 1990s and early 2000s rarely did we discuss in senior management meetings the values of how we could protect the planet and how we could be an outstanding employer – in reality it was all about the dollar and how we could make more.”
He says that organisations today that can develop superior strategies on how to manage their people, the planet and profit will rise above the competition.
So what makes one organisation more successful than another?
Pollard says that outstanding organisations have good strategy that is well communicated and understood by all stakeholders including measurements and timelines so that success is clearly understood.
“Understanding what it takes to be an exceptional employer who builds and retains outstanding and productive teams is also very important for success and developing good sustainability strategies to protect our planet will improve brand reputation and customer loyalty.”
Asked whether the way the corporate world views success today is different than it was in the past Pollard says very much so.
“In the bad old days it was all about extrapolating as much profit from your business model, at all costs, and usually with little thought about people or the planet.
“Today’s managers must now contend with financial stability strategies, social strategy including managing much greater compliance legislation and environmental and sustainability strategies for the protection of our planet.”
He says today’s managers must develop greater skills, be multifaceted and consider how to develop strong organisations for the future built on their companies social, environmental and economic impact.
“Gone are the days of profitability being the only measure of success. Looking back measuring success was much more straightforward than it is for today’s leaders.”
As to what has driven these fundamental changes, Pollard says that society has driven change.
“It really is as simple as that, the need to consider more than just profit is now very real.
“The upside of this is that companies have greater opportunities to develop competitive advantages built on social and environmental strategies, done well this will improve brand equity and customer loyalty, both areas that are important for the development of long-term financial stability.”
Pollard also noted that Covid has highlighted some interesting initiatives from business especially around the areas of innovation and how companies can pivot through a crisis which he has found to be very inspiring.
“As we move forward, our people, our planet and our profitability working together to create long term value will be what separates a good company from a great one,” he says.
Understand your risk profile
Simon Whyte is the chair of ChildFund New Zealand, which for 30 years has been helping children and youth to thrive in communities around the world that are impacted by poverty.
He says that while defining today’s business or organisational success overall is a complex question, “ultimately success reflects what is valued by a business or organisation. There is a saying, ‘you measure what you value’.
“Business or organisational success is not just defined by measuring its outcomes against primary financial, business or social metrics over a given timeframe, for example, gross, net profit and ROE or, for a NFP like ChildFund, its social impact.”
He says as these metrics are generally only two-dimensional. He thinks success also needs to take into account the strategic and other financial or operating challenges that were overcome to achieve those metrics.
“Increasingly, some stakeholders judge success against other social or environmental impact measures crafted around or aligned to the Sustainable Development Goals, 17 global goals developed by the United Nations in 2015, including input from ChildFund, aimed at combating extreme poverty, climate change, inequalities and injustices.”
Social, environmental or SDG impact measures may include monitoring supply chain integrity and measures for environmental conservation and protection (e.g. carbon neutrality, water quality) and labour practices like inclusivity, pay equity, child labour or modern-day slavery.
“Also in the local New Zealand context, adherence to the principles of Te Tiriti o Waitangi is important.”
Whyte says an organisation or business needs to understand its risk profile in determining how its success will be judged against a range of measures, and then determine how it will manage its operations and performance against those expectations.
“It’s not easy but it’s important to realise that the audience judging success is often broader than we think it is and care needs to be taken to ensure the organisation chooses to measure and manage the right things.”
As to what makes one organisation more successful than another, Whyte says an organisation that sustains its performance in its primary metrics, while successfully also managing broader expectations of stakeholders, is in his view more successful than organisations that don’t.
So is the way the world views success today different than it was in the past? Whyte says definitely.
“The increasing speed of societal, environmental, technological, generational, and geopolitical change and more recently the impact of the pandemic on travel, labour and supply chains, has made it increasingly difficult for any organisation to meet its stakeholders’ expectations of what they see as ‘success’.”
Asked what has driven these fundamental changes, Whyte says that regardless of an individual’s view, the societal and generational changes that have occurred over recent times have resulted in new expectations on the role of business and organisations and how they behave in society.
“As a result, the metrics by which ‘success’ is judged have broadened and made it more complex…”
As well as being chair of ChildFund New Zealand, Whyte also chairs the board of the global ChildFund Alliance, a network of 12 development organisations operating across 70 countries.
“Through this, I regularly see that the relative weight of these measures may vary between different regions of the world.”
Whyte adds that the changes for businesses and organisations are for the better and reflect a reality that is directly linked to sustainability in its widest sense.
“Despite the scale and complexity of meeting these new expectations, these are good things to do and ultimately to have a good brand you need to do good business. Additionally, any ongoing failure to meet the new expectations will likely result in the organisation’s sustainability or ‘social licence to operate’ being challenged, and that is not good business.”
He points to some significant changes for ChildFund saying it has expanded from simply being a charity that helps children, “to being an international community development organisation that delivers impact leading to intergeneration change. Ultimately our mission of helping children remains the same but the way we do it has changed.”
Whyte says part of this has also been changing the way it operates in New Zealand, including a move to smaller office space in a more dynamic environment; accepting cryptocurrency for donations; strengthening and increasing partnerships and the recent appointment of new board members who bring diverse experience and insights across multiple disciplines.
He says ChildFund’s impact in the field is strengthening too.
In Batticaloa in Sri Lanka, ChildFund is working on a new co-design planning process which puts the community and community partners firmly in the driver’s seat to forge the way ahead to community self-sufficiency.
It’s also undertaking an agricultural project, with the help of MFAT and New Zealand supporters, to build sustainable family incomes in Emali, Kenya, through dairy and crop farming
A broader perception of success
Ray Dunn is executive general manager and New Zealand country president at Schneider Electric, with more than 20 years’ leadership experience.
Asked how he defines business/organisational success today, he told Management that for him the number one measure is your people.
“They represent your organisational values in everything they do, and that flows through to your end-to-end customer experience. If your people are passionate, empowered, innovative and customer-focused, then that will roll through your entire organisation.”
As to what makes one organisation more successful than another Dunn points to four key things:
• Looking after your customers is the first priority. They are why you are in business in the first place.
• Having a clear strategy and SMART goals and ensuring your team is clear on what those are, and believe that they can make a difference to the organisation.
• The ability to be open and ready for change in all its forms, whether that is looking at diversity and inclusion in your organisation, sustainability, digital transformation or other challenges we have as business leaders. It’s about having a team around you who has diversity of thought and a customer-focused lens, so you can see challenges from all angles and have open and robust discussions considering different perspectives. Then you can take considered and appropriate action based on all the information and insight you have.
• Have some fun doing what you do – my colleagues and kids will probably tell you all about my terrible dad jokes. You want people to enjoy coming to work and creating an environment where your team feel comfortable, trusted and respected.
So does the world view success today differently than it did so in the past? Dunn says we are broader in our perception of what success looks like.
“I believe we have a much more balanced approach to success overall, in terms of finding a sense of achievement in our work life, while also able to have meaningful time with family/friends, and time to pursue passions outside of work. We know that achieving that balance is better for everyone in the long run. In my eyes success is not measured by the hours of work you do in a week, rather how efficient and effective you are with those hours to prioritise what is important and that is going to have a material and measurable impact on the organisation you work for.
As to what has driven these fundamental changes, he says we have more insight now around what drives well-being, and with digital adoption the lines can get blurry between work and home life, where it used to be easy to have that natural separation.
“Twenty years ago you left the office, walked out the door and that was the end of the day. Now it is not so simple and easy to disconnect. You have to prioritise and focus on it, and we are working hard with our people to find the best way to operate in an increasingly open and digital world,” he says.