4 Ways To Define Winning That Will Transform Your Business Organizations can't succeed if they don't know what success means
By Andrea Olson Edited by Micah Zimmerman
Opinions expressed by Entrepreneur contributors are their own.
Businesses gauge their performance typically with dozens of goals and metrics. But you can't do everything at once. The challenge is to get people focused on the one thing that's most important right now. If it moved in the right direction, it would eliminate a weakness (or capitalize on an opportunity) and improve financial outcomes. You improve that, and you win.
However, not every company clearly defines winning. A catalog of goals can pull the organization in multiple directions and stretch finite resources. Numerous goals can inherently be at odds, working against each other and for conflicting purposes. For example, a cost reduction goal might undermine an innovation goal requiring a significant investment.
Alternatively, goals can be disconnected from what directly influences the organization's ability to win. Consider a company that aims to increase sales by 10% by the end of the year. If the team achieves it, is that a win? It depends. What if the sales team (to reach the goal) focused on pushing low-margin products, resulting in high sales but low profit? What if the team surpassed the target, exacerbating profit losses?
While it's arguable this might be a poorly designed goal, is increasing sales the best, most impactful way for the organization to win? The potential for failure lies in this chasm between defining goals and defining winning. When goals conflict or overwhelm, it sends the message that 'everything is the priority.' This leaves the definition of winning unknown. Without a singular focus, the organization is fundamentally serving multiple masters with their own agendas. Success then becomes an abstract concept, open to individual interpretation.
Related: The 8 Essential Steps to Building a Winning Company Culture
Having a north star
Companies frequently get consumed by all the things they want to improve. Often the response is that there's no way to focus on just one thing. However, by defining winning, you define the organization's proverbial north star. Defining what winning looks like for your organization ensures complete alignment around what matters and, more importantly, what directly affects the company's success.
For example, a restaurant could define winning as controlling the cost of goods, trying to get the cost down to 26% of revenue without compromising quality. This definition of winning can drive the design of a new menu to save on food costs and which dishes servers should recommend. It can prompt a new process of pre-portioning, reducing waste. Using this single north star, everyone in the organization can focus on ways to contribute to reducing the cost of goods.
These actions would generate faster, more consistent dishes — keeping customers happy. Happy customers drive more revenue, which in turn, makes it easier to keep costs down. With reduced costs, the restaurant can compete more effectively against the competition, have more runway to experiment with new items and have more cash on hand to upgrade facilities or hire additional staff.
Related: Why Making Money Shouldn't Be Your Only Goal in Life
In short, your winning definition should be the only thing currently that will catapult your company to the next level. It should also be measurable, strengthen competitiveness, grow the organization and be available to everyone.
Here are four considerations as you work to define winning for your organization:
1. Winning should be modified as circumstances change
It isn't reasonable to gauge company performance for all time by just one metric. The point is to identify something that's key to compelling results now and then get everyone tracking it. As the results are achieved over time, a new definition of winning can emerge to address the new business landscape.
While unforeseen influences such as regulatory changes or the emergence of a new competitor may arise, these can be quickly addressed by modifying that winning definition.
2. Winning can be defined beyond finances
Even though defining winning often is rooted in a financial metric, winning can be designed around non-numerical targets. Consider how a definition of winning could focus on brand, technology, customers or even employees. For instance, it could concentrate on customer retention or talent attraction.
The purpose is to utilize your winning definition as a driver of organizational performance — ensuring every employee is hyper-focused on the one metric that matters. The question for the team becomes, "how can I help us reach that metric?" rather than jockeying for pet projects or becoming distracted by other financial measures.
Related: 5 Tips for a Winning Presentation
3. Winning can come in phases
As the organization moves towards achieving its winning outcome, there will be both progress and regression. It is critical to keep employees motivated by reinforcing that progress towards winning. When the organization begins to slide back or lose sight of the north star, leadership needs to intervene, reiterating the winning definition, underpinning its importance and addressing barriers or obstacles to achieving it.
Employees should also clearly understand that winning will be achieved over time. Building key milestones can help sustain the team's momentum and motivation. It is helpful to celebrate notable team achievements, whether a new idea to accelerate winning or a superior winning performance embodies it.
4. Winning should be seen and owned by everyone
Your winning definition is better understood when everyone learns the business and sees how their everyday actions affect results. This requires helping everyone in the organization to learn to think like a business owner. Consider sharing a simplified income statement every week or putting up a big scoreboard somewhere. Pay people a bonus if you hit your winning target.
The key is to involve everyone in the organization, top to bottom, with the winning metric. Empowering everyone to contribute and tying the metric directly to organizational success illustrates a purpose and path to achieving it. Address questions early, often and frequently. The winning definition should be something every single employee understands and can articulate when asked.
By moving beyond the litany of convoluted goals and objectives, and instead defining winning, your organization can focus on what directly matters to company success today. As many organizations unintentionally pull employees in a variety of often competing directions, it is critical to establish that north star which everyone can align with. Otherwise, you'll continue to fight to justify every initiative which supports growth, whether it's helping growth or not.
