How Should a Business Measure Success?
Most businesses measure success by profit and growth, so they get more of both, whatever it costs. Here are five measures a business can actually keep, and what changes when it does.
Ask almost any business how it is doing and the answer comes in three numbers: revenue, profit, growth. Those are the numbers boards review, investors reward and managers are paid on. And we get more of what we measure.
This is not an argument against profit. A business that loses money can’t last, and can’t help anyone. The question is narrower: what is profit actually a measure of, and is it the right measure of success?
This may sound naive about competition. A business that measures usefulness while its rivals chase profit alone may simply lose. That risk is real, and we don’t wave it away. But a measure that can’t tell a useful business from an exploitative one is a risk too, and we already live with its results.
What profit measures, and what it doesn’t
Madhyasth Darshan defines profit (लाभ) bluntly: taking more while giving less. It is a hard definition, and plenty of businesses earn their profit by being genuinely useful. But look at what the number itself records. It is the gap between what a business takes in and what it gives out.
A measure that rewards the gap rewards it however it is made. A better product widens it. So does a lower wage, a hidden fee, a supplier paid late, or a river that nobody charges for. The number can’t tell these apart. It goes up either way.
The darshan has a word for what happens when that number becomes the purpose: लाभोन्माद, a compulsion for profit, in which getting away with taking more is mistaken for success. Few people in business set out to exploit anyone. They only have to keep score with a measure that can’t see the difference.
What a business is for
Madhyasth Darshan describes production (उत्पादन) as applying human labour to the wealth of nature to create things that are useful and beautiful: food, homes, clothing, the means to travel, to communicate and to see beyond where we stand. That is what a business is for. It turns nature and labour into usefulness.
If that is the purpose, then success is how well a business does it, and what it leaves behind. That can be measured. (For how to choose what to make in the first place, see How to Decide What to Produce.)
“A measure that rewards the gap rewards it however it is made.”
Five measures
Each measure comes with a question, and with something the business can actually count.
1. Usefulness. If we stopped tomorrow, what real need would go unmet? Count how much of what you sell is actually used, and how much is returned, thrown away or forgotten. Notice whether customers come back because they need you, or because they find it hard to leave.
2. Enough for every family in it. Does every family that depends on this business have enough? Not the average family: the one with the lowest pay. Set the lowest wage against what a family actually needs for a year, worked out the way we describe in How to Calculate Enough for a Family. The gap, if there is one, is the number to close.
3. Trust. Is anyone here afraid? Staff of their managers, customers of the fine print, suppliers of being paid late. Count how many days suppliers wait for payment. Count the terms in your contracts a customer would be upset to read. Notice whether people speak up in meetings, or only afterwards.
4. What returns to nature. Does what we take from the earth come back in some form? Count, in physical units rather than money, the materials, water and energy taken in, and the waste sent out. Then ask whether the land, water and air the business depends on are able to renew, year after year.
5. Where the surplus goes. When we produce more than we need, who is it for? A healthy business produces more than it consumes. Madhyasth Darshan calls this production beyond need (उत्पादन सुलभता), and treats it as the basis of prosperity. Count how the surplus is shared: with the families who work in the business, with suppliers, with the community and the land around it, and with a reserve that has a number. A surplus that flows only one way, without limit, is the old gap under a new name.
Profit doesn’t disappear from this list. It becomes a check that the business is producing more than it uses up. A sign of health, not the purpose.
How to start
Begin with one page: the five questions, and a sentence or a number for each. Keep it next to the financial accounts and review it as often.
Then widen who answers. Leaders tend to answer kindly. Ask staff, customers and suppliers the same questions, and compare. Where their answers differ from yours is where the work is. Let staff answer without being identified, especially about fear and about whether their family has enough: a manager asking face to face won’t always hear the truth, and matching answers don’t prove it either.
Here is what a first one-page report might look like for a small workshop of twenty people. The business and every figure in it are made up, to show the shape. These measures are proposals we are still developing, including in Earth & Us, not validated indicators.
| Measure | How it is counted | Starting point |
|---|---|---|
| Usefulness | Share of customers who say, three months later, that the product is still in use | 7 in 10 |
| Enough | Families in the business who say, in an anonymous survey, that they have enough | 14 of 20 |
| Trust | Average days a supplier waits to be paid | 48 days |
| Nature | Share of offcuts and waste reused or returned, by weight | 35% |
| Surplus | How last year’s surplus was shared: staff, suppliers, reserve, community | Written down |
Each line gets a starting point, a date to look again (every six months is enough to start) and one person responsible for gathering it, which can rotate. The numbers only matter in comparison with themselves: is supplier waiting going down, are more families saying they have enough? Keep the answers about families and fear anonymous, and report them only in totals.
Don’t try to move all five at once. Pick the one where the gap is clearest, often the lowest wage against a family’s enough, and work on that for a year.
What changes when you measure this
Decisions get a second test. A plan that raises profit by quietly lowering one of the five measures now has to be argued for in the open. It becomes easier to say no to money that would cost too much. People inside the business start to trust that what they are told is what is measured. And a business that knows what enough is for itself can stop chasing growth for its own sake.
Helping organisations look at themselves this way, their understanding as well as their conduct and its consequences, is what Earth & Us is being developed to do. It is still in development, and it is one of the places we intend to test these measures.
And the planet?
Most of what humanity takes from the earth is taken by businesses, on our behalf. So the way businesses keep score decides much of what happens to forests, rivers and soil. While success is counted only in profit and growth, taking more will keep looking like success.
Measures 4 and 5 change that directly. A business that counts what returns to nature, and sends its surplus somewhere other than more extraction, has a reason to take less. If many did, the economy would begin to measure progress the way we suggest in How Do We Measure Progress?, and the route from happy people to a sustainable planet, set out in One question, not two, would run through the workplace too.
A protocol to try
If you work in a business of any size, answer five questions about your own workplace this week, in one sentence each: What real need would go unmet if we stopped? Does every family that depends on the business have enough? Is anyone afraid? Does what we take from the earth come back? Who is the surplus for? Don’t soften them.
Then ask one colleague to do the same, privately and without showing them yours. Where your answers match, you have a starting point worth checking. Where they don’t, you have found the conversation it most needs.
Limitations
- Competition is real. A business that takes on these measures alone may carry costs its competitors avoid, at least for a while.
- Usefulness and trust are harder to count than profit. Badly designed versions of these measures could become one more box to tick.
- Madhyasth Darshan’s definition of profit is a hard one, and many people in business will feel it is unfair to them. Plenty of profit is earned by being genuinely useful.
- Small businesses and large ones face very different pressures. These measures have not yet been tested across many businesses of either kind. If you try them, tell us what breaks.
References
- Madhyasth Darshan Paribhasha Sanhita, लाभ (profit) and लाभोन्माद (compulsion for profit), p. 163
- Madhyasth Darshan Paribhasha Sanhita, उत्पादन (production) and उत्पादन सुलभता (production beyond need), p. 46
- Madhyasth Darshan Paribhasha Sanhita, मानव लक्ष्य (the human goal), p. 148
