1: We get mixed up.
Means, ends, and by-products are not the same thing.
“A profound distinction is concealed among those prosaic terms,” Panera Bread Company founder Ron Shaich writes in his powerful book Know What Matters: Lessons from a Lifetime of Transformations, “one that unlocks the code to designing a business and a life of enduring value.”
Exhibit one: Ron’s friend who has type 1 diabetes.
“He wants to live a long and healthy life, like the rest of us,” he writes, “but he knows that simply focusing on that desire won’t get him there. For him, longevity is not an end he can pursue directly but, rather, a by-product.
“The critical end he must focus on is keeping his blood glucose levels between 80 and 180,” Ron explains.
“And he accomplishes that through specific means: management of insulin, sensible exercise, and eating right.
“The by-product of his efforts—living-longer,” he writes, “takes care of itself.”
2: There are some goals in life we can pursue directly. Examples include getting a college degree, landing a job we love, buying a home, running a marathon, or writing a book.
“We attain those ends by choosing the right means and following through with discipline,” Ron observes.
Other things—often the most important ones in our lives—prove to be trickier. For example, “being in love, finding happiness and contentment, feeling a sense of integrity or self-respect,” he writes.
“These are by-products,” Ron notes. “By its very nature, a by-product is a secondary result; you can’t generate a by-product by focusing on it.”
One of the challenges we face as human beings is that much of what we yearn for cannot be pursued directly.
As the great psychiatrist and philosopher Viktor Frankl writes, “happiness cannot be pursued; it must ensue.”
“Victor “understood that making happiness a target only leads one to miss it,” Ron writes. “He saw happiness as an ‘unintended side-effect’ of a life dedicated to a greater purpose.
“It is the same with success—in business and in life,” he observes. “Building a business or a life that we respect will be a by-product of the ends we focus on and the means we choose over decades.”
3: Understanding the difference between means, ends, and by-products is a valuable tool for us as we build a business. Clarifying how these concepts work together impacts how we launch a company, innovate new products, and stay competitive in rapidly changing markets.
The game-changing insight Ron has discovered? “Profits are not an end; they are a by-product. If we focus on profit as the end, we fail. We can’t really ‘make’ profit.
“Value creation, in the form of profit or stock price appreciation,” he explains, “is the by-product of our efforts.
“And when we fully appreciate that value creation is the by-product, the end we can focus on is delivering a better and more differentiated experience than our competitors.”
Does this mean profits don’t matter? Of course not! Profits are critically important.
“But they can’t be created as an end in and of themselves,” Ron writes, “and if we focus our efforts on trying to make more money or raise the stock price, we will actually lose sight of the means that create the end we seek.
“Treating profit as an end rather than a by-product is self-sabotage.”
So, if profit isn’t the end goal, what is?
“I know that sounds like abstract MBA textbook jargon,” he shares, “but remember, it simply means that we offer something our target customer wants enough that they are willing to walk past our competitors to visit our establishment.
“Pursue that end with great focus,” he predicts, and “the profits will take care of themselves.”
A quick summary of Ron’s rules for knowing our means, ends, and by-products in reverse order:
- The by-product: Value creation.
- The end: Competitive advantage.
- The means: Initiative and projects executed with discipline.
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Reflection: Am I pursuing the right goals directly, or am I mistaking by-products like profit or happiness for ends I can actually control?
Action: Clarify the difference between the goals, means, and by-products in my current projects—then focus daily effort on the discipline and initiatives that set the stage for real value.