How We Define Business Success

Generally speaking, event professionals are efficiency experts. They focus on managing the many logistical details that go into planning and executing successful events.

By contrast, business professionals are effectiveness experts. They focus on the “big picture” and managing or allocating resources in order to maximize the business impact of events and achieve a competitive advantage.

For event professionals – the efficiency experts – to develop a greater appreciation for event effectiveness, they’re going to have to develop a greater understand of how business professionals think and act in order to achieve a competitive advantage.

Event professionals must run events more like a business.

Defining business success

How do we determine if a business is successful?

Every business, no matter how small or how large always begins by defining their overarching goals and objectives. These are specific, clearly-defined business goals they’re trying to accomplish – whether it’s to deliver a product or provide a service – that meet a particular customer need. Business objectives are aligned with and support the overarching goals.

If these goals and objectives are not specific enough, or communicated clearly enough, the risk of failure increases exponentially. And the landscape is littered with businesses that failed to specify, or communicate clearly enough, their goals and objectives.

Once a business has defined its goals and objectives, it needs to translate those into metrics (general units of measure) that it can track. Metrics that represent crucial areas of performance are called Key Performance Indicators or KPIs. While there may be some standard business KPIs, every business is unique in some way so they ultimately have to determine the KPIs that work best for them.

These metrics have to be collected in some type of system so they can be easily accessed by business professionals. These measurement systems can be as simple as a spreadsheet or complex as a SQL database or a comprehensive data warehouse.

Finally, once a business has defined its goals and objectives, translated those into metrics, stored those in a data repository, it can begin to analyze the data, looking for meaningful trends or patterns, and interpret those trends and patterns to make more informed business decisions.

Just as every business does this for the business at-large, each functional area within the business (like sales or marketing) must do the same. This is how everyone understands what areas of the business are performing successfully (i.e., aligned with the overall business goals and objectives) and which may need more attention.

This is how businesses determine if they are successful. It’s how business professionals keep “score”.

How Amazon keeps score

In a 2019 letter to shareholders, one of Amazon’s stated goals is to be hyper-focused on customers and less focused on competitors and what they’re doing. This led Amazon to pursue a number of new initiatives centered around selection, price, and convenience for both their online and physical locations.

Regarding their physical locations, Amazon launched Amazon Bookstores (17 in the U.S. and counting). In addition to books, highly rated devices, games and toys are available for shoppers to experience.

Amazon Go is another brick-and-mortar store without cashiers or checkout lines. Offering ultra-convenience, Amazon Go sells grocery items and prepared foods.

Finally, Amazon acquired Whole Foods Market offering discounts to shoppers who have an Amazon Prime membership and even sell Amazon devices inside the stores. Future plans call for additional, larger Whole Foods stores with space for more items and online order pickup services.

Now Amazon’s not known for discussing its metrics, much less its KPIs, but you can imagine that they collect a lot of each. Some of the more important metrics/KPIs might include:

• Product category sales by the second, minute, hour, and time of day, compared to the prior week, month, and year. They probably track the margins for these sales, too.
• Number of transactions and average order size by category.
• Number of new PRIME members per day.
• Inventory, inventory, inventory…likely several time per day. They are probably checking turnover rates and other related inventory metrics.

Of course, all this data ends up in massive repositories. Amazon collects so much data that it uses machine learning and Artificial Intelligence (AI) to help them analyze and interpret it all. In fact, AI is helping Amazon expand their business in ways their leadership never could have imagined.

This is just an example of how Amazon determines business success. In addition to these metrics, they also collect data on a number of other business functions like market performance, operations, financial matters, personnel, etc.

Summary: Business professionals rely on data to make the most informed decisions about where to invest, how to allocate resources, etc., all designed to gain and maintain a competitive advantage. The most meaningful data is derived from the businesses overarching goals and objectives, translated into sensible metrics or KPIs, stored in a repository where it can be properly analyzed and interpreted and turned into meaningful insights for a competitive advantage.