In a Business setting, how do you measure the value obtained from intangibles such as fostering communication with junior members of the organization?

January 6, 2012 5:35 PM

In a Business setting, how do you measure intangibles such as fostering communication with junior members of the organization? For example VP holding open door meetings every month? In the end I need a metric (A number)? The problem here is that its very hard to articulate value of such things in a metrics crazy world/companies? And I need a metric!
posted by r2d2 to Work & Money (7 answers total)

We used to measure it based on senior management skip level meetings each quarter (each manager meets with the direct reports of their direct reports) and then quantify that with a yearly satisfaction survey in the department.

So one of the questions would be something like 'our management believes in open communication across the organization' and you'd have a set of benchmarks to determine if the response level meets, exceeds or does not meet the predetermined goals.

To start with you could do a survey and then look at your numbers to figure out if there are perceptions of problems in this area.
posted by winna at 5:48 PM on January 6, 2012

Well, we just had a survey at work called a "leadership and culture" survey, undertaken by an external organisation. It is supposed to rate things like how people feel about management and leadership within the organisation, how likely they are to still be in the job in a year etc etc, and scores the organisation against a range of measures (our HR department nominated the ones that they wanted the survey to answer, as being important to our organisation).

Once completed, the organisation looks at what it wants to do to improve scores, implements these activities. For example, they may decide that they need to hold more open door meetings between senior management and junior staff.

The survey is then repeated at intervals to see if the scores are changing.
posted by AnnaRat at 5:50 PM on January 6, 2012

We have the same deal as AnnaRat at our company, repeated every 4 years. The management team is sometimes scored on metrics such as increasing the score for a particular question.
posted by cabingirl at 6:00 PM on January 6, 2012

A good work environment might be helping your business in terms of less employee turnover or less shrinkage or something you can measure (compared to some sort of reference level which may not be your own firm, it could be an industry average). Being nice might lead to less management turnover also which would likely be very good for the bottom line.
posted by shothotbot at 6:49 PM on January 6, 2012

Many companies I've come across address this problem by conducting annual (or less frequent) 360-degree feedback surveys on their managers, then incorporating the results into the annual review. While it's a great way to emphasize that being a good manager and corporate citizen is an important component of someone's performance, it also presents some challenges. For instance, a disgruntled employee or even several staff members together might use the survey as a way to undercut the manager unless the company culture has evolved to a point where such petty actions are inconceivable.

If that's not your cup of tea, you can proceed along the lines suggested by shothotbot. To find out what variables you could and should measure as indirect indicators, ask yourself why fostering communication with junior members of the company is important. What difference does it make if senior managers do it and do it well? What changes as a result? The answers will point you to relevant and measurable metrics.
posted by DrGail at 7:18 PM on January 6, 2012

In my workplace I conduct a bi-annual "engagement survey." It is largely 70 or so items (representing 8 drivers) related to the work climate similar to what was outlined above by other posters. Embedded in the instrument are six items that measure a latent factor for employee engagement. We use the measure of employee engagement as a target variable for improvement (and also disaggregate it by department, level, gender etc to look for pockets of high or low scores).

Now, back in the day we took the time to build a giant structural equation model to find out how each of the 70 climate variables loaded on the engagement variable. In short, it allowed us to identify the variables where incremental improvement would result in the greatest corresponding increase in engagement. There are obviously some scores that are easier than others to increase (coffee service versus paid leave) , but years when our executive leadership is feeling smart they focus on improving those most highly correlated with increases in engagement. We can max out the score for coffee service and see no change in engagement, but if we close for three days between Christmas and New Years we feel the love. And then you can start to associate costs with your actions and the resultant increases.

So to answer your original question, when initiatives like communication, transparency, and distributed project authority are undertaken we do so because we believe that they will increase engagement -- and we track that as our meta-outcome every two years. I think that when you ask for a metric you have to keep in mind what your ultimate outcome is: you want to increase communication with junior members by 15%/2points/1 star/20 minutes ... in order to achieve ???
posted by cgk at 7:52 PM on January 6, 2012

Response by poster: Thank you everybody! Some excellent thoughts here.
posted by r2d2 at 1:25 PM on January 7, 2012