As Future of Work and business modernization imperatives continue to reshape the landscape, another concept is becoming top of mind for every leader…
The need for new and more progressive business KPIs
In my previous blog, we examined just how much businesses are shifting their approach to measurement; consider there are now novel ways to measure Employee Engagement that use “Happiness” as a barometer! What was once viewed as “squishy” or immeasurable CAN in fact now be measured. At SQA Group, we believe you can derive CAP metrics — countable, actionable and predictable — for anything.
More on that here.
What I hear from leaders is that current and previous metrics are rapidly and, unintentionally, becoming lagging (not predictive) indicators and are therefore incomplete when it comes to serving as a compass for course correction. What leaders really want is strategy metric 360-degree visibility and alignment. Data that informs strategy effectiveness in real time and then an ability to drive decisions that adjust underlying processes and behaviors to achieve corporate goals.
Pressure is mounting fast for us to rethink our approach to KPIs. To paraphrase a Bill Gates quote, we tend to overestimate change that will occur over the next 2 years but underestimate the change that will occur in the next 10. And if the last 2 years have taught us anything, this statement has never had greater meaning.
The future of all things is rapidly colliding with the present, and business agility is under a microscope like never before. For example….
What is the future of economics and capitalism?
How will “work” be defined?
What is a unit of work worth?
What is a work week or work day?
Are we shifting from output to input as the driver of productivity?
Ever contemplate what the future of compensation might be?
The need for new KPIs is perhaps no more felt than when we think about how to measure the biggest pressers in business today, things like client vitality, employee experience, innovation, brand vitality, customer journey impact, and alignment to one’s mission. Traditional methods for KPI calibration — NPS, pipeline, website traffic, surveys — paint too singular and outmoded a picture. The reality is that leaders need new tools, fresh insights and novel business performance measurements that both complement existing KPI models and also add predictive insights to strategies that were previously deemed immeasurable.
Important questions must be answered especially as emerging technology ushers in KPI Intelligence – essentially smarter metrics that learn (ML), build off prior iterations and predict or act intelligently (AI). Adding to the complexity, there is no current playbook or template that truly captures business KPIs that work TODAY or prepare us for TOMORROW. Every company must now build data mapping strategies that are unique and represent philosophy and culture belief systems.
Said differently, the era of new business KPIs is here now.
And in this new era, we can truly measure anything.
Let’s take a look at this use case example….
There are several industry sectors and business model types that capture the essence of “Mission Driven,” and enjoy strategic alignment almost “out of the box.” B-corps, purpose-driven firms, and minority-owned businesses exemplify unification of people, purpose and profit “balance.” There are other examples worthy of our attention…
An index, launched in 2016 by nonprofit Just Capital, sought to “move the vision of stakeholder capitalism from rhetoric to reality.” In search of America’s most just companies, the program created an ESG-driven dialogue with Wall Street and many of the largest publicly traded companies (Russell 1000). Using data-driven research and analysis, the Just 100 annual rankings aimed to restore trust in capital markets by addressing systemic issues top of mind for investors and consumers.
The methodology included:
- Define and know your constituency. The Just 100 system was all about five unique groupings – Workers, Communities, Shareholders, Customers, Environment
- Identify the attributes that shape your vital KPIs and map the underlying behaviors. Just worked with stakeholders (the American Public) to surface the top 20 issues from the survey population (tens of thousands polled annually using quantitative measures and qualitative focus groups). These methods addressed “what does JUST business behavior look like?” Job creation, inclusivity, sustainability to name a few of the 20 issues most important to the constituents.
- Build/identify the measures and organize/align to attributes. ’22 Just rankings used 241 raw data points all aggregated against the 20 issues/KPI’s. In general, the data represented lowest possible subjectivity, clear units of measure and would be applicable to all companies in our universe, regardless of size, industry or business model.
Leaders can learn a great deal from the methodology used to build the annual Just 100 ranking system. The notion of “just” corporate behavior could easily be dismissed as a buzzword or PR stunt. Or, as a squishy and immeasurable goal.
However, what can be lost in the fog of change today, is the realization that data (structured or not) creation is literally everywhere. And technology tools are enabling data creation in ways not previously available. The Just 100 model provides a glimpse into how business leaders can reimagine their own KPI structures.
So… what do you wish you were able to measure?
Our Metrics Finder helps companies measure what’s previously been immeasurable so that you can keep your eye on what’s most important to track in this new workplace paradigm. Click here to start exploring what you could measure next.