How To Measure the human side of business
Introducing The Kindness Performance Indicator (KiPI)
We are very good at working with numbers; they form the universal language that translates into business failure or success. In fact, everything of value, whether tangible or intangible, is translated into figures to enable us to gauge our business performance. It’s a straightforward method of measuring, monitoring and improving our business operations and, as we all know, what get’s measured gets done - a mantra that most leaders recognize and deploy on a daily basis.
But are we measuring the right things?
Do our increasingly connected and collaborative business networks require new ways to measure success? As knowledge and data rapidly become a powerful new business currency and social connectivity becomes the latest engagement model, it’s time for us all to focus on our most important asset – our people.
Corporate performance measurement has barely changed since the industrial revolution, when the ‘organization as a machine’ metaphor played a major role in driving improvements in efficiency and effectiveness. The result was an organizational management model based on mechanistic, command-and-control thinking, that was driven by individual assessments, financial indicators and performance-driven remuneration arrangements. Performance management improved greatly in the 1960’s with the introduction of Key Performance Indicators (KPI) – originated by McKinsey – to identify and measure those aspects of a business that determine its success. Choosing the right KPIs relies on what is important to each organization and, to date, most companies continue to focus almost exclusively on their financial KPIs.
Having a clear view of your company’s financial performance is vital, as good financial health is critical to ensuring sustainable business growth. However, a radical rethink will be required to remain successful in the future and thrive in the emerging “everything is connected” era. As disruptive technology profoundly changes the way we work and do business, the current metrics will no longer be adequate. Social business networks, remote working, mobile devices all enable us to work anytime, anywhere from any device. Gone are the days when productivity was measured by the number of hours spent in the office under direct supervision of a manager.
Introducing the Kindness Performance Indicator (KiPI).
Ever since the start of the industrial revolution, employees have been viewed as production units. The terms FTE, headcount and human resources, all reflect that ‘mechanical’, and still very industrial view. Productive workforces are essential for any organization to be successful and, historically, a lot of effort was put into ‘time and motion’ studies in order to become more efficient, cost effective and competitive. In modern business we can look to today’s Lean and Six Sigma programs to optimize processes and activities. Are they bringing us the results we are looking for? Not entirely.
Now let’s consider adding the human element, perhaps better referred to as the ‘social’ aspect. We can all acknowledge that a happy employee is generally more productive and engaged. If this sounds simple, you’re right, it is. Empathy, kindness, attention, appreciation and valuing an employee’s contribution are all ‘free’ management tools that make the difference between a bad employer and a great place to work where every employee’s wellbeing is important. We know these qualities and management principles instinctively and yet we rarely think to apply them. “I’ve no time, I’m too busy, and… it’s not on my bonus scorecard”. It seems we’ve come full circle. To incorporate these principles we need to redesign the way we measure performance and success using the established KPI model.
So let’s look at introducing a Kindness Performance Indicator (KiPI) - a method of measuring and improving the wellbeing and happiness of employees within an enterprise. Consider it as a way of placing the human side of our businesses at the forefront of our business operations. After all, it is not success that drives happiness, but happiness that drives success!
In my next blog I will explain how kindness can improve happiness and wellbeing at work, resulting in a connected workforce that is more engaged and productive.
What do you think the metrics should be for the KiPI?
Wellbeing@work – the human side of business.