New world of work, new measures of success?

How often do businesses focus solely on financial performance to measure success? Organisational updates, company-wide communications and broadcasts, fixated almost exclusively on the growth of the company – sales, revenue, growth rates, margin, profitability. It’s a very common scenario. Yet, take a glancing look at the feedback on sites such as Glassdoor, and you will need to search hard to find reference to financial success as a key reason for joining (or staying in) a company.

There’s a major disconnect between what companies track and proclaim as 'success', and what people value (and actually delivers long-term success). Financial performance in isolation simply isn’t enough to build a durable business – hundreds of studies attest to the importance of broader factors – yet few visibly prioritise these metrics.

Don’t get me wrong, financial metrics are important, but they’re only one part of the equation. In today’s employee-centric world, there’s a need for a more holistic model to guide a company’s success. This could even help organisations to pinpoint what drives and multiplies results and the levers to pull in changing scenarios. ?

Metrics that matter

Glassdoor recently published the Top Companies to work for in 2023, based on employee reviews. The Top 10 include companies such as Bain & Company, Service Now, Boston Consulting Group, Equinix, Ocado Technology. The employee reviews cite experiences such as: “Exceptional innovation and world class service, committed to diversity, sustainability and employee welfare” (about Service Now) and “Really good culture, people-centric, progressive outlook. Hybrid work is in place, which is quite flexible” (Ocado Technology).

The metrics that matter to employees are clear – a collaborative, inclusive culture; flexibility and balance; interesting and meaningful work; opportunities to progress and grow. However, few organisations proactively track these elements. Some report on engagement surveys but there is always opportunity to massage the data, to choose what is reported (and what isn’t). Many organisations talk to these components, but dig beneath the surface and are these really measured, reported, and proactively targeted? Perhaps some genuinely do, but this is likely the exception, not the norm.

In their quest for finding workplaces offering these experiences, employees display a better instinct for what truly matters in sustainable organisations and businesses. Research has found positive relationships between purpose and company earnings; employees today demand more than pay and benefits (and they can access this in a much broader array of companies); nurturing diverse and inclusive organisations increases company profits; and people who don’t find opportunities to learn and grow their careers, will leave the company.

Imagine evaluating a company against these components:

Employee Vitality

This has to be the first. Are people healthy? Is this a long-hours, presenteeism, input over output focused culture? Are people burning out? Or does the company treat people like adults – trusting them to work in a flexible, balanced way. How connected do people feel at work? Gallup’s engagement survey item ‘I have a best friend at work’ is one of the best predictors of retention. When we feel part of something and that we belong, we feel happy, and therefore more likely to work harder and stay at a company.

Culture Health

Culture is often described simply as ‘how things are done around here’ and yet a positive or negative experience can have far-reaching impact. Having some regular tracking of culture is so important. Elements such as diversity (how representative the workforce is and how this changes over time); who gets promoted and who doesn’t? The extent to which collaboration, learning and growth happens across the organisation as a whole (or only in pockets); and taking a measure of psychological safety – do employees feel they can say what they really think and not get shot down for it? With thought and proactive data collation, objective, data-led views on culture experience can be gathered and monitored to inform action.

Purpose & Impact

Meaningful and impactful work is increasingly prioritised as a top driver (amongst knowledge workers) and is often why people take on side-projects or take time out to pursue new adventures. McKinsey research even found links between purpose and life expectancy. As an employer, building and maintaining a galvanising purpose is critical as it can help drive and align workforces. Tracking the strength and position of this, therefore, feels like a no-brainer.

Company performance, today

Understanding the performance of the company today is critical. This might include metrics such as financial growth (sales, revenue) as well as profitability (margins, EBITDA, etc.) but should also reference things such as productivity (are we working smarter, not harder?) and the longevity of the business (do we have a model that will last? E.g. are new customers signing up, buying more? How quickly do innovations arrive and how successful are they?) Of course, this section is intricately related to, and driven by, those previously outlined.

Transformational potential, tomorrow

A final component, often overlooked, is the potential of the organisation and its people to evolve and remain relevant in the world, tomorrow. This is where aspects such as constant learning in the flow of work (skill mastery, new tools adoption, etc.) and the ability to deliver change (whether programmatic or through re-configuring organisational design and enabling internal talent mobility) can be key indicators of future durability. In addition, measuring objectively potential within the workforce, e.g. for leadership and to develop new and emerging skills to deliver future needs, provides critical insight too.

Start small and build

It’s certainly not easy to measure and track all these elements but start small and build from there. Look at the data sources you have available today, e.g., engagement surveys – can the questions themselves be used to provide insight into different components? HR systems such as applicant tracking, psychometric tools and assessments, learning and development platforms, skills portals and talent marketplaces could also provide great data sources. Activity streams such as Microsoft Viva (tracking collaboration, time spent working, etc.) and even Organisational Network Analysis tools (ONA) showing how information flows around the organisation, could offer some fascinating insights.

Make it manageable, practical and insightful and quickly extend your view beyond financial metrics. Reporting on these will help people understand the company better (and vice-versa); it will help attract even more talented people (from a diverse range of backgrounds); and it can help identify the action required to drive continuous improvement and future agility.

Financial metrics provide a snapshot of an organisation’s position today. Understand and tell the broader story about the journey, how this can be sustained, and what's needed to build readiness for tomorrow.