We will discuss three different Rs in this article- Rewards, Results, and Returns with reference to entrepreneurship and Bhagavad Gita. I believe there are three responses we getnything that we do. We get a reward, typically short-term return, usually some material gain. There will also be a result of our actions, positive or negative, irrespective of our intent. There will also be a return, the ROI, usually long term, based on the way our actions impact the system or the environment. Most of the time, we focus on the first two, as they are easy to measure, negotiate and sign up in a contract. This is the root cause of all the problems.
Focus on rewards is materialistic. Focus on the results is being task and project driven. Focus on the returns is sustainable and gets us closer to the true essence and meaning of life. There is nothing wrong being materialistic as we all need to live, survive and grow. Families are to be taken care of along with other social obligations. The Varnashrama Dharma of Hinduism endorses earning money as a core responsibility of Gruhasthyashrama – the third phase of life where the person is expected to get married, raise a family and earn money to do the needful for the preservation of Dharma, through righteous living.
So where is the problem?
Two words lead to this confusion, rewards and results. And we confuse them with each other. Reward is what I get for my efforts and skills. This is the way we make enough to pursue our lives and good deeds. This should not be confused with results. Rewards are based on the value I deliver to the world, based on outputs. Results are the deliverables from my work, the outputs. Returns are the end impact created, the ROI, the outcomes. This is the theory of change where we are encouraged to segregate outputs from the outcomes. However, apart from the discourse on social impact and sustainability, theory of change and its concepts are ignored and absent from the lexicon.
Any task or work that I do, I must keep all these three Rs in mind. I need some reward to live a contented life. I should have clear outputs, the results, meeting the needs of my stakeholders and customers so that they see value and pay me my reward. There should be a long-term, systemic, and positive impact of my work, the Return, which leaves a legacy and delivers a long-term value to the stakeholders. Most of the time, the whole discussion is focused on rewards, driven by our perceived self-worth and market dynamics. This is usually related to the results expected to be delivered, based on the opportunity and assumed value. In this whole discussion, returns are often ignored or side-lined as they are long-term. Consequently, many programs and projects fail in the end.
How to fix this?
Disconnecting outputs and outcomes is the first steps. Why am I doing this work? What is the end objective? How would it look like when that objective is achieved? What is the impact of that achievement on myself, my family, friends, and community at large? This needs to be clearly articulated. This is very important for entrepreneurs. Unless they are driven by this vision, they are not playing a sustainable, long-term game.
The next step is to figure out what results or outcomes would help achieve the expected returns. Focusing on delivering the best outputs is not important if those outputs don’t enhance the expected returns. The pursuit of excellence always focuses on the returns, not just results. It is not the product or service being delivered by the entrepreneur but the extent to which that helps customers achieve their objectives and returns, that defines the value. This is where the value proposition goes way beyond Jobs-To-Be-Done by the customers. Why does the customer want it to be done? Is that really required? Can we eliminate, automate, or delegate it?
Now, we can talk about the rewards or the price, we want to charge for the services delivered. What are we saving the customer? Time, effort, or money? This then is mapped to the target customer segment to understand the value attached to the same by those customers. This is also linked to the nature of the need being satisfied – Blatant, Latent, Aspirational, or Critical. This would help the entrepreneur arrive at the price point or the reward he can expect from his value delivery.
This is a completely different approach to the cost-plus model of pricing. This approach helps us to articulate our short-term as well as long-term value proposition. We hear advertisers talking about our investment. But what is the ROI? This is another missed opportunity being ignored by most of the startups as they only talk about the results and not the returns.
For example, a health supplement targeting middle aged men shows the users being able to spend quality time with their family today. How about showing them being active with their grand children and link it to a current habit of taking the supplements or adopting a healthy lifestyle? Both are important, but focusing on long-term benefits can build loyal customer base and enhance the Customer Lifetime Value, dramatically reducing the cost of customer acquisition.
Linking this to the Gita, some people think it is a sacrifice not to expect rewards. Never. We only do our work as an offering to God. Because of that attitude, we try to deliver the best. That's why culturally, we have been doing daily cooking as an offering to the God and consume the food only after offering it to the God first, with obvious results. This approach needs to be adopted into businesses as well.
But how is that possible?
This is where the systemic thinking and understanding helps. When we start understanding the impact of our product or service on the people and the community, we will realize the long -term harms or benefit it would create on the society. This would prevent us from delivering inappropriate products and curbing the harm, irrespective of the financial rewards it would generate. This ignorance is the reason for all the social ills.
We must separate outputs from outcomes, and rewards from results and returns. This is where our vision and mission help- us to constantly validate and realign our products and services to the betterment of the society. As we grow, our needs reduce, and we reach the ability to do things with minimal rewards. We should be able to deliver the base product for free and charge only for the value-added services. This Freemium model is not new and is a great way to enhance customer acquisition and loyalty. This leads to Nishkama Karma- service without an intended result but a far better result driven by and caused by cosmic forces.
About the Author
Flt. Lt. Sridhar is a Startup Ecosystem Builder, Keynote Speaker, Author, Researcher, and Entrepreneur. Sridhar’s mission is to help Entrepreneurs and startups achieve incredible success through exponential growth. He brings insights and lessons from three decades of hands-on startup and business leadership experience in various verticals. Sridhar uses six different thinking processes, including systems thinking and design thinking, and helps entrepreneurs create breakthrough solutions through his unique coaching process. Sridhar launched and ran four businesses. He is a certified Startup Mentor from the Confederation of Indian Industries.