This week, Culture Scout bets that we’ll open your eyes – instead of glazing them over – on the topic of business metrics.
There are huge changes afoot in how companies figure out how well they and their employees are performing, and these articles help explain some of those big shifts.
1. New metrics aim to speed move from shareholder to stakeholder capitalism
Last summer, the Business Roundtable rocked the corporate world by boldly asserting that companies are more than just an instrument to serve shareholders – that they must measure their success on how well they perform for all stakeholders – including employees and the community at large. Bank of America CEO and International Business Council Chair Brian Moynihan was tasked with creating metrics to measure that success. This week, Moynihan and the World Economic Forum unveiled those metrics – and showed how government regulators around the world are getting behind them.
Excerpt from the WEF article:
“Clear signals that corporations are focused on environmental, social and governance (ESG) priorities at the same time they are providing great shareholder returns is what our employees, clients, customers and society need.”
2. When someone says KPI, do you say, ‘Bye’?
If you hear the words, “Key Performance Indicator” or KPI, do you want to run for the exits? CEO Graham Kenny addresses that dread in the Harvard Business Review. He tackles the general lack of understanding around what KPIs really are, how they should flexible, and offers advice on how to stop them from being such a turn-off.
Excerpt from the HBR essay:
“As the conditions around your organization, department, or section alter, be prepared to morph your performance measures. It’s set and reset, not set and forget. As [a client and] bank CEO observed, the dynamics of your business operating environment are changing all the time in response to digital innovation, social media, and the emergence of Covid-19. It’s time to rethink how you develop your performance measures.”
3. Why building a community beats building a company
“It’s all about the soft skills,” says software CEO Alex Lutskiy in a new Forbes essay about how companies achieve, or stymie, strategic goals. Lutskiy says organizations shouldn’t turn to tech to determine how well objectives are met, but to how well “different vibrant cultures” within a company are functioning and how they are nurtured. Create a community among those cultures and it’ll spread to clients, and that’s what leads to success, he says.
Excerpt from the Forbes essay:
“To foster innovation and to disrupt, you need to invest in corporate culture and values. In order to drive positive changes, you must make a committed investment into people’s spirit, emotions and relationships. That’s exactly how you drive business success.”