"Business for good" is bubbling. It needs to boil.
After a career in tech, working at Google, HubSpot, and in VC, yanno what I finally realized?
Growth is the problem, not the solution.
Okay, okay, I need to qualify that. It’s not that growing a business is, itself, a problem. The real issue is how we treat growth. We treat it as a goal — as the goal.
Just one problem.
"Growth" is not a goal. It's a measure.
Really, it's just one way to measure progress towards a real goal. And while each of our respective goals might sound different to say out loud, they’re all just variations of one overarching idea: make a difference for those you aim to serve: your team, your customers, and your community. Do that well, and you'll grow. Some really good signs that you’re doing this well include the attention and trust you earn from the right people, the actions they take on your behalf, and the numbers going up.
However, serious problems arise when “make the numbers go up” becomes the goal.
An idea called Goodhart’s Law warns us against this problem, this common trap of conflating goals and measures, and of trying to force the numbers to increase instead of building things that create a natural kind of growth.
Goodhart’s Law says, essentially, when a measure becomes a goal, it ceases to be a good measure.
Worse, and as we’ve seen too often, when growth becomes the goal, it does a lot of damage — to teams, communities, the globe, and yes, even to the very cause people think is the entire point of business: the desire to grow.
When a measure becomes a goal, it ceases to be a good measure.
Growth is not a goal. It’s a measure. When it becomes the goal, it’s no longer a good measure.
When you tell yourself or others that any flavor of growth — any “measure” — is the goal, it incentivizes at-all-costs behavior. We lose our ability to know something is actually working, because we try to force it to work, and because we rely on a faulty approach to measurement. We lose our ability to make things better and to make better things. (Isn’t that why we measure stuff anyway? Not to show others it worked, but to find ways to keep improving. Good measurement isn’t about proving something. It’s about improving something.)
When growth becomes the goal, rather than a form of measurement, we start identifying false positives and negatives and game systems to generate more “positives.”
Growth Gone Wrong
As a middle manager at a fast-scaling tech company early in my career, I saw just how damaging this could be, My team knew that their goal from our executives was to drive X-thousand leads per month. Even though they didn’t consciously make this choice, I watched as they stopped doing the actual job of a team of writers at a software company (investigating our audience’s problems and publishing content to teach and inspire them) and began focusing on “driving leads” instead. What happened as a result hurt the team, the audience, and even our growth goals.
With that big number of leads planted firmly in mind as the “goal,” the team mastered the ability to trick people to fill out a form on the website. We weren’t great at earning the trust and love of an audience necessary for that audience to say, “Yes, I’d like to learn more about your product.” Instead, we became great at getting names into a database — through whatever means necessary.
I remember one particularly terrible week where we published the “Ultimate Collection of Social Media Graphic Templates.” The website page made the PowerPoint deck of customizable images seem so tantalizing, thousands eagerly filled out a form to unlock it. They were rewarded with a bunch of designs my toddler could have done by slapping her hands on the keyboard.
Oh — and they were built solely for Facebook, not “social media.”
But boy, oh boy, did we “hit our goal!” All those names in the database? We blew past our goal that month. Too bad the goal was really a measure. And what did I do as the team lead? Nothing. I was complicit. Sometimes, when I questioned the work, I wondered if something was wrong with me. Most times, I just thought, “This is how the system works, and if I want to succeed here, I have to get good at this system.”
Blah.
As you might guess, months later, the company discovered an existential crisis: less than 1% of all these names and emails were from people who had any genuine interest in interacting with us ever again. Less than 1% wound up as a “qualified” lead … never mind a customer.
For months, we kept hitting our goals. We grew our traffic and our leads. But did we actually serve the audience better? Not a chance. The goal remained “X-thousand leads per month.” The work remained a process of gaming systems. The real goal should have been, “Create the most helpful blog for marketers on the planet,” or, “Teach marketers solve THIS problem or get better at THIS skill.” If those were the goals, then one way to measure our progress towards it would have been the number of people who decided, “Damn, this is so helpful, I will happily subscribe for more. I would love to hear about your product. I might even buy.”
Wish I knew about Goodhart’s Law back then.
Gaming Google
Growth as the goal doesn’t just hurt teams that are obviously focused on external, traditionally growth-focused jobs (like marketing). My first job was in sales at Google, but to become a sales rep, you first needed to work in customer support to learn. Turns out, growth as religion can hurt that kind of job, too.
For eight months, a few hours per day, I answered phone calls and sat through chat support shifts. Being the great honor-roll student I was in school, this felt familiar. A repeatable system, with periodic check-ins to review performance? Sounds like school! The muscles of being a student in an education system built in the industrial age kicked in. I figured out the system well enough that I could game it, I could “get the A” — without actually learning anything or helping anyone.
You see, Google wanted us to talk to a higher volume of customers per shift. That’s how “growth” manifested in customer support at the company. The goal, they said, was N calls per shift. So what did I do? I ran a little experiment. How quickly could I get customers OFF my calls? How good could I get at hyping just how magnificent Google’s online help center was? How soon could I persuade the customer on a call or in a chat that reading an article would solve the problem better than I could? When faced with a choice of putting someone on hold and doing some research for them — or even asking a colleague what they thought — I’d almost always guess at the answer, simply to end the call and start a new one.
The real goal of customer support is to serve the customer, to teach them, to inform the business with real insights about what’s happening out in the world — to make a difference. That’s the real goal. But my stated goal was a flavor of “growth” — more calls per shift.
I gamed the system. I hit my numbers. I got promoted.
Fucking hell.
We Need Different Success Models & Success Stories
When growth becomes the goal, rather than just one way we measure progress towards the goal, it does more damage than good. This affects individual teammates and customers and entire departments or cohorts of customers. It affects communities and society, too. When growth is the goal, not a measure, it lays waste to good intentions of good people, even without them seeing it. It creates a scorched-earth philosophy driving businesses, sometimes figuratively, sometimes [gestures to the outside world] literally. WE focus on the wrong things, do worse work, or burn out, and OTHERS suffer from a system tilting radically in favor of just a few people at the top of a company or a society.
Growth is not a goal. It’s just one measure of the real goal. Don’t forget the real goal, and fight like hell to find other ways to measure progress towards it, too.
This work we do is always about the same thing: make something that makes a difference. Short-termism, system gaming, marketing and sales which annoys the many to convert a few, and other, similar behaviors are a product of a broken system. But systems are just inputs, rules that govern how inputs get processed, and outputs. To change the output, we can change what we choose to put into the system, and change the rules that govern them. We can choose to remember Goodhart’s Law and to articulate actual goals to ourselves and our teams. We can choose to work for and work with people who understand the actual goal, too.
If these ideas resonate with you, take hope: you’re far from alone. More than ever, more people want to build for-profit businesses as a force for good.
There’s a movement bubbling, and it’s about to boil. Let’s make sure it does.
PS: I hope you’ll begin to explore this movement that’s bubbling and, if you feel inspired, help it reach a boiling point. It feels like every day, I find or hear from more people who believe in building for-profit businesses as a vehicle for change and for greater good for more people, rather than as a vehicle to achieve selfish aims. For-profit companies are incredibly high-leverage vehicles, and people can make the decision to leverage them for good or not.
As I said, the movement is bubbling. For so many cultural and societal reasons, we need it to boil.
If you’d like to start learning about what’s happening, I’d suggest the following wonderful humans and resources:
Zig Zag Podcast: Manoush Zomorodi (host, TED Radio Hour and founder, Stable Genius Products) has just wrapped up a brilliant season — the show’s fifth — interviewing people who believe in a better way to build businesses. The interviews are deftly crafted, entertaining, and inspiring, and the ideas and organizations being led by the show’s guests represent the exceptions that need to become the rule.
LTSE (Long Term Stock Exchange): The quarterly gains-focused public markets contribute to extreme system gaming and short-termism, or perhaps even drive the entire mentality (which spills into private companies, too). Founded by Eric Ries of Lean Startup fame, LTSE seeks to provide a means of going public when you’re focused on longer time horizons than quarters — because, honestly, we expect anything meaningful to happen in three-month increments? And what about the truly meaningful things that take generations? Quarterly success can’t be THE success for which businesses are optimized. Stop it.
B Corporations: A way to legally form/register your company (or switch the status as you grow) that holds your business accountable to certain standards beyond just stakeholders. (Think S Corp, C Corp, or LLC, but for companies who want to formalize and measure their ability to do good in the world AND grow.)
This is the B Corp Declaration of Interdependence, and it shakes me to my core every time I read it:
We envision a global economy that uses business as a force for good.
This economy is comprised of a new type of corporation - the B Corporation -
Which is purpose-driven and creates benefit for all stakeholders, not just shareholders.
As B Corporations and leaders of this emerging economy, we believe:
That we must be the change we seek in the world.
That all business ought to be conducted as if people and place mattered.
That, through their products, practices, and profits, businesses should aspire to do no harm and benefit all.
To do so requires that we act with the understanding that we are each dependent upon another and thus responsible for each other and future generations.
Currently, a few thousand companies have registered as B Corps, including Ben & Jerry’s, Allbirds, Cabot Creamery, Stonyfield Organic, Hootsuite, and Patagonia.
Zebra’s Unite: A reaction to the startup community’s obsession with unicorns, this founder-created-and-led movement champions startups — and a startup community and culture — that are more inclusive and sustainable. This piece in Quartz from one of the group’s founders is particularly great.
Against the Grain: Selfishly, I need to include this. I’ve partnered with the B Corp software company Help Scout to create this docuseries all about a better philosophy for building businesses. If you’re tired of the winner-take-all, high-growth-everything success story in business, believe customers, craft, and community need to be put at the center of what we do, and want to replace the damaging-but-celebrated archetype of business success (e.g. blitzscaling, hypergrowth, hockey stick growth, etc.), then I hope you’ll join this journey we’re on. The series launched August 18, 2020, with Episode 1, with two more coming this year, and some other ideas and projects brewing, too. Your support is a direct signal that this series needs to continue.
I hope you’ll help us elevate better success stories to inspire more to pursue a similar approach.