Business measures performance and overall success based on benchmarks that have a financial outcome. Embedded within a corporation’s financial statements, are the results of customer satisfaction, employment engagement, risk management, R&D investments, and corporate responsibility. Compensation and bonuses are calculated using the profitability and sustainability of a business entity. Recently, Allison Rockwell MBA(FS) Class of 2015 and I conversed on how we may inadvertently find ourselves measuring personal success using business metrics.
In the second installment of striving for success in 2019, Dr. Rick Nason discusses the question: What benchmarks, besides financial, should be used to measure a successful career?
Dr. Rick Nason:
Two knee jerk reactions to this question. First is that a financial benchmark for a successful career (implied in the question) is a horrifically awful benchmark. The second knee-jerk reaction is that whatever I, or anyone else provides as an answer for this question will be both misleading and sad for anyone who mindlessly takes our answer(s) as the truth.
To the first point: I believe the goal of life, and of a career, is to maximize utility. Merriam-Webster online dictionary defines utility as “fitness for some purpose or worth to some end”.[1] Happiness is an end of worth to me. In fact, I generally equate utility with happiness, but I see the linguists starting to compose angry tweets against me, so I will move forward quickly. Love and friendship are also ends of worth to me. Laughter is an end of great worth to me. Having good food (which may or may not be fancy and expensive) with friends is an end of great worth to me. Having shelter, clothing, food and financial flexibility is also of worth to me, but not great worth. Being able to provide shelter, clothing, food and financial flexibility for my family is of much greater worth and utility to me than those things are to me personally.
To continue with this thought you need to realize one fact: economists (and by extension finance profs) are extremely lazy intellectually. We build our theories on maximization of “utility”, but immediately take an intellectual shortcut to state the aim is to maximize “utility of wealth”. We then go to second order laziness and shorten “maximize utility of wealth” and think we are becoming efficient by simply eliminating two words: “of wealth”. To those students, lay people, media, and political pundits who are lazy and do not bother to actually read and understand the concept of utility it is all the same. (Sadly, to most economists and finance profs it is also all the same.)
The important point is that “utility” is not fungible with “utility of wealth”. If you give me $20MM dollars but take away my ability to see and hear my children laugh, then I will have “utility of wealth”, but I will be bankrupt of “utility”. Trading $20MM for never seeing and hearing my girls laugh again is a trade I will never make (and neither should anyone else although I am afraid that a lot of people implicitly and unconsciously do make that sad trade).
Success, like utility, is a function of the individual. You should celebrate the fact that what gives you utility (happiness) is as unique to you as your thumbprint or your DNA. This unnerves economists as the uniqueness of everyone’s utility function means that economists cannot create a general theory of economic maximization (and thus formulaically answer your question). This uniqueness, and inability to mathematically deal with this uniqueness, is one of the excuses that economists give for focusing on “utility of wealth” rather than the more appropriate “utility”.
Unfortunately, we spend a lot of time focusing on some arbitrary (and sometimes downright silly) relative measures of success as we have been trained to think in terms of objective scorecards. If only the world was so simply complicated, instead of having all of this wonderful complexity that we humans bring to it, then we would have a giant formula we could operate by, and soon, some company would be offering us a personal robot and algorithm and there would be no need for us to individually exist at all.
The benchmarks for success are what you as an individual determine them to be. They should not be my benchmarks, nor should they be anyone else’s. They should not be adapted from a tweeted blog titled something like “9 Factors of Success”, nor should they be based on subliminal elements from advertising. They should be developed by you though careful and thoughtful consideration. By the way, it is quite likely that your benchmarks for success will change dramatically through time and through your experience.
I believe that success is a journey. Sadly (or fortunately) we can never consider ourselves a success and then call it a day. If we do, then entropy will quickly kick in. We will be unable to recognize the many opportunities that are available to those who continue to strive in a complex environment.
Whatever measure(s) of success you come up with you, comparison should not be part of the process. Regardless of the measure (unless it is laughably low), you may fall short compared to someone else. However, success is not a zero-sum game; or a game at all for that matter. Success is relative, and you need to make the difficult calculations of the most useful level of relativeness to you.
As for me, every day when I set off into the world, I say a little prayer that the world will be a “little better place because I existed”. Some days I clearly fail in that goal. I may say something politically incorrect, my hair gets in someone’s face, my exam questions are too long or too difficult etc. etc. etc. However, success for me is in the trying. Failure is still success if you are trying to increase your utility (and for me, the utility of others).
Are you still actually reading this!? Get out there and be successful!