Measuring Success

On this site, we have asserted that the four purposes for business are Products, Passions, Profits and Philanthropy. God created business, we believe, to provide a way for us, as a society, to provide products and services that enable the community to prosper. We also believe that business was created to give people a structured way to express their individual passions and creative talents, both working alone and in collaboration with others. These creative talents result in products and services which enable the community to flourish. We believe that money is a convenient way to transfer wealth (rather than always bartering goods and services) and that when the transfer of wealth is voluntary, both parties profit from this exchange. When business is profitable, sustainability of the other three purposes for business is achieved. And finally, we believe that beyond a certain point, profits are to be given away so that the community has very little, if any, poverty and that the basic needs of everyone in the community are met through the philanthropic giving by businesses to the community – which also enables to the community to flourish.

I believe most business owners need a way to measure success. If we define “success” in terms of fulfilling these four principles, then we need method(s) of measurement that will help us understand if we are being successful or not. It’s impossible to give precise definitions and benchmarks on how success is measured for each principle, but in this post, I’d like to offer some ideas for you to consider as you incorporate these four principles into your business model.

Measuring profit

When it comes to measuring profit, there are a plethora of tools that enable us to do this. The most common tools are the core financial reports: income statement, cash flow statement and the balance sheet. When read in light of current events, these three reports can information a person about the profitability of a business. Remember, without profits, a business cannot sustain its fulfillment of the other three purposes. So measuring profit on a persistent basis is essential to achieving fulfillment of the other three purposes that God has given us for running a business his way. The Christian business owner will unashamedly embrace profits as a core purpose for his or her business and will always keep an eye on this ball.

Measuring products

Our purpose as Christian business owners is to create products and services that allow the community to flourish. Most of the time, the creation of these products and services are achieved through other people that we employ. These products and services will take numerous different forms.

Generally speaking, businesses that engage in sinful activities will degrade their communities and will not fulfill this purpose. For example businesses that engage in the selling of sex, or the marketing of addictive drugs that are likely to destroy an individual’s life, or the selling of get-rich-quick schemes that are closer to gambling then they are true investments, or enabling people to have disagreed affairs and cheat on their spouses – all of these (and more) are businesses that might be profitable but they don’t enable the community to flourish. While it’s impossible to write down the exact rules that differentiate between products and services that achieve this purpose and those that don’t, I’d like to offer a few principles against which you can measure your business to ensure that the products and services you’re offering fulfill this principle:

  • If the development or the providing of the product or service requires people to sin, it is not a product or service that will enable the community to flourish
  • A product or service that asks people to violate their values is not a product or service that will enable the community to flourish
  • A product or service that destroys relationships that are key to a community thriving is not one that will enable the community to flourish
  • A product or service that has addictive qualities to it such that the people lose voluntary choice in future transactions is not a product or service that will allow the community to flourish
  • A product or service that asks people to violate the laws of the community is a product or service that does not enable the community to flourish
  • A product or service that enables one group or individual to win at the expense of another group or individual when the transaction is not fully voluntary by both parties is a product or service that does not allow the community to flourish
  • When the product or service relies on the force of government to achieve adoption of that product or service is not one that will allow the community to flourish

I realize there are inherent dangers with these principles, especially in the last two. It could be argued that capitalism is inherently a win-lose economic system. I would not agree with those arguments because I believe that when people voluntarily barter goods and services or monies for goods and services, that this is a win for both parties. It does not really matter if other people outside the transaction view it as a win or not. If the two people involved in the transaction voluntarily enter into that transaction, both parties win (assuming there is no fraud in the transaction).

Obviously we need laws against fraud and regulations to ensure that people deal in an honest fashion with each other. It doesn’t take a starburst of insight to realize that given our sinful nature, we are likely to lie to others cheat and essentially steal from them money or goods and services if possible. This is why our fraud laws and other laws ensure that people engage in economic transactions voluntarily and with full disclosure from the other parties.

The larger point here is that these principles can be used as a starting point from which to develop solid ways to measure success on how we are doing as Christian business owners are providing products and services that enable the community to flourish. I invite discussion on these principles – that you would post here at the end of this blog article your thoughts objections or comments about these principles.

Measuring passions

If you thought that measuring products and services that allow the community to flourish was difficult, then try measuring how well you’re doing at providing an environment in which people can express their creative passions and talents. The larger point of measurement is found in connecting the dots between what the business needs accomplished, what the job description states, and what the passions and talents are of the individual that you put into that job. The more closely you can align those three things, the more likely it is that the person will be able to fully express their God-given talents and passions. Hiring people with one set of talents and passions for job that requires a different set is tantamount to hiring the right person for the wrong job or putting the wrong person in the wrong position. Measuring this principle is not easy. But it can be done.

There are a number of human resource tools that measure job performance. I’m not recommending any one of them in particular for you to use. In measuring this principle, you simply need to have good measurements of job performance but also elicit feedback on whether or not the individuals feel like they are growing personally and professionally. The job performance of individuals in your company should be a two-way street. Not only do you measure their performance, but they should be given the chance to honestly evaluate themselves relative to what the job needs are, and have the freedom to state that perhaps they should be looking around for a different job, either within your company or somewhere else. As a Christian business owner you should not be surprised or feel insecure that some people will want to move along to another company to perform work. Instead you should be open to the notion that people moving on to other companies and other positions might be the best thing for them and for you. Having an honest assessment and evaluation will help your individuals feel like they have permission to state what they honestly think and will give them the opportunity to either grow in the position that therein or find a position that enables him to fully express their talents and passions. Working with them as they transition out of your company can bring you and your employee a great deal of satisfaction and goodwill, which is usually quite valuable down the road.

Measuring philanthropy

As a Christian business owner, you can hear directly from the Lord about how much money, products and services you should be giving back to the community. There is no doubt in my mind that businesses that do not give back to the community in one form or another are businesses that will not thrive well. Why? Because they are not fulfilling the purposes that God has given to business.

As part of your budgeting process, I would strongly urge you and your budgeting process to include giving as one of the core expenses of your business. Whether you consider them fixed or variable is up to you and is probably something that you should discuss with the Lord. But not giving out of your business should not be an option for you, the Christian business owner.

We don’t have a fixed amount that businesses should be giving. But here are a couple of principles for you to work with as you engage in fulfilling the last purpose that God has for business, which is giving back to the community:

  • Giving should not impoverish your business. You will need profits to sustain fulfillment of the other purposes. If you’re giving causes you to lose money on your income statement or causes you to not have adequate reserves for known expenses in the future, then you’re probably giving too much money away
  • Giving out of your business is not the same as tithing. Tithing is a personal matter between you and the Lord and is, I believe, composed of 10% of your gross income. If you disagree with me on this point, I’m not going to quibble with you. How much you do give out of your business, however, should be something that you derive from your conversations with the Lord. For those of you that have businesses with high net profits and low retained earnings needs, God may require much more from you: to whom much is given much is required.
  • Hoarding cash is sinful. Only the Lord can tell you at what point you cross the line between keeping enough money in reserves for future expenses and hoarding cash. But clearly the latter is condemned in Scripture and should not be characteristic of a Christian business owner.
  • Make sure that you give enough away so that you do not develop a love for your money. If you find that you can’t give the money away simply because you love it or love what it brings to you or you get scared because you view your security is in your cash and not God, then you need to give more of it away – perhaps much more.

Summary

What’s frustrating about a post like this is that many will wish there were more details – more specifics. But this is actually a good thing. When you are forced to ask God how you’re doing in fulfilling his purposes for your business, you’re going to find that you’re spending more time in prayer and allowing God to evaluate you and your business in ways that only he can do. I simply point you to the person of Jesus Christ and ask that you allow the Holy Spirit to examine you and your business as you look towards fulfilling these purposes.

Bill English
CEO, Mindsharp
Associate, The Platinum Group

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