The Only Way to Improve Something is to Measure It
Every company knows that in order to grow and improve, they need to be effective at managing the cycle of setting goals, reaching those objectives, measuring results, and then adjusting and acting again.
Many companies now see that measuring the impact of more responsible resource practices – such as improving supply chain accountability, waste reuse, and minimizing environmental damage – produces greater customer satisfaction, and ultimately enhances company performance and value. This has been a long time coming, and is very needed.
For over a decade, the corporate concern has been that doing something good or right may have a significant economic cost to the bottom line. That ideology is losing out fast. Customers today are intelligent. They care more about who they buy from, and what they consume. They appreciate companies that approach the world’s resources and people as if they matter. McKinsey has just completed a thorough report that underscores this point.
You Can’t Manage What You Can’t Measure
The more educated people become, the smarter they consume. It is imperative we have a measuring system to track how companies are growing that is not just rooted in financial data. Designing such a system is not easy, because many of the metrics seem subjective. But this hasn’t stopped several companies from developing and implementing metrics to gauge impact: GRESB, IRIS, GRI, SASB, and even the United Nations PRI have successfully deployed such frameworks, and many more are building a following.
I believe the financial world will settle into a system that measures what matters and will use that metric as a leading indicator of long term success. What we measure we can improve!