In the last article I wrote about the three most important measures of business success: profit, impact, and joy.
Which of the three comes first? If you can only tackle one at a time, where should you start?
The answer? It depends. (Did you know I practiced law for 10 years? Some habits die hard.)
It depends based on the current state of your business. Of the three—profit, impact, and joy—which is most lacking in your business at the moment? Where is the biggest gap? Start there.
If you’re profitable and are making an impact, but are miserable, you need to start asking why. Why are you unhappy in the business? Is it the long hours? Is it frustration caused by inefficiency? Is it people problems? Is there a misalignment somewhere in the business that is causing the lack of joy? Maybe a disconnect between your personal values and the values of the business? Or is it something else?
Or maybe you’re super happy running the business, you’re making the impact you want, but struggling with profitability. Again, time to start asking questions. Is the poor profitability a result of poor sales, poor expense control, poor systems, inefficiency, or something else? Resist the temptation to blame market forces—some businesses in your industry will succeed in any market.
If the problem stems from poor sales, you need to revisit your impact. Are you really making the impact you want? Because if you are making an impact, you’re creating value for your customers, and they will buy from you. So maybe the impact you’re trying to make isn’t the impact your customers actually want.
Then there’s the scenario where you’re happy and you’re profitable, but you’re lacking in impact. But wait, you say. You just said that if you’re making an impact and creating value, profitability will follow. So how do you create profit without impact?
So here’s the thing. If you haven’t figured it out yet…you need to understand that profit, impact, and joy are inextricably linked. They are all levers that affect the other. A win in one area is usually a win in all three.
Making an impact creates value and leads to profit. And the meaning that derives from the impact is a key element of joy. You tend to be happier when you are making a difference. And let’s face it, all things being equal (which, granted, is a big assumption) most people are happier making more money than less. Profitability can lead to more joy.
Profitability can also lead to more impact. Profit means you get to stay in business and have a fighting chance to create the impact you want. More profit can also amplify your impact, by giving you more options and a broader reach.
And if you and your team members are happy pursuing the mission and vision of the business, you and they are naturally going to be more invested in the business and driven to create the desired impact, which in turn can lead to more profit.
And so on and so on and so on. That’s why the image at the top of the article shows the continuous cycle of impact leading to profit, leading to joy, leading to impact, leading to…you get the picture.
There is, however, a cautionary principle related to this concept. It’s called the Be-Do-Have mindset, and I will dig into that in the next article.