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Measuring value vs. measuring values

Capturing value vs. capturing values

Have you noticed how companies (and governments) have mastered the science of capturing economic value-quantifying, measuring, predicting financial and economic yields with precision. What we haven’t mastered is the art of capturing the positive worth of values.

In a corporation, what is the worth of values-honesty, transparency, diversity, integrity, loyalty? How do we assess, motivate and reward these attributes in our employees, our contractors, our partners? How do we demonstrate these values at an organizational level? What company doesn’t have a policy or mission statement trumpeting these values. Yet, where are the systems and processes for measurement and reporting on  the positive worth of these values to the organization, the shareholders and owners, and others?

When organizations consider economic value, we first measure positive indicators:  the efficiency of a farm is assessed by assessing positive yield per acre, a manufacturing plant’s efficiency is quantified on the basis of outputs per square foot of plant, financial returns are calculated based on rate of return for every dollar invested.  With economic value, we look first to upside and positive indicators.

Conversely, when organizations evaluate the worth of values, we start with the negative: the financial consequence of a tarnished reputation; the cost of a blockade by angry communities; the sales lost by a boycotting public; the legal cost to defend against a discrimination lawsuit launched by a disgruntled employee; the loss of business triggered by an allegation of bribery or corruption.  With values, we first look to downside and negative indicators. Rarely do corporations have systems and processes in place to capture the positive worth of values.

What would happen if we looked at corporate values from a positive, rather than negative, perspective? What could this look like:

  • If the value of transparency is achieved, annual reports and statements to shareholders, potential investors and the marketplace in general would have an enriched economic value. Investors would believe in the written and verbal messages.
  • If the value of diversity is achieved, individual employees in a company would be more fully engaged in the company’s business and would contribute 100% effort, every day, yielding enthusiasm, passion, and innovation.
  • If the value of trust is achieved, citizens in communities where companies operate would appreciate the full value of every dollar voluntarily invested in that community by corporations…with the potential even for a premium on dollars invested.

The SAP network includes the global icons of systems thinkers. Imagine the potential for corporate values if the network could design systems that captured the upside of values. Human resource systems that could track the upside potential of employee and contractor loyalty. Community investment systems that measured the worth of trust. Reputation management systems that reflected back the value of a positive reputation with consumers, communities, even advocates. The paradigm shift in thinking about the worth of values could be revolutionary. This shift could change the way we look at organizational values…and value.

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  • The value of values…an addendum. The 2007 Harris Interactive Reputation Quotient study released today is worth a look.

    Of course, it is interesting to check out the winners and losers. But, it is really interesting to see how companies, like Google, who spend nothing on advertising can still end up on the top of the reputation ladder.

    Harris Interactive’s spokesperson, Robert Fronk, explains the results: “For Americans to hold a company in high regards today, clearly more than just profits are needed – companies need to focus on overall corporate social responsibility and how their employees are treated in order to build trust with today’s consumers.”

    The research company also points out that Google ranked No. 2 on the social responsibility dimension, but does not even make the top five of companies based on its support of good causes, the environment or communities. “Google received a top-ranking for social responsibility primarily due to their workplace environment,” Harris Interactive notes, “demonstrating that corporate responsibility, in the minds of consumers, starts with your own employees first.”