Savvy business professionals know their company’s numbers: those quantitative measurements that help to determine if we’re on track or off course in achieving our strategic goals. Most often, these metrics are based on accounting and financial data. It makes sense – dollars and units are inherently quantitative.
But is that all that we need to really measure in order to understand how our companies are performing?
In my own experience and in countless hours talking with other business professionals, the answer is a resounding “no!”
The Imbalance Toward Quantitative Data
Accounting and financial reports tend to focus on the way money flows in and out of a company. As a result, these reports are inherently quantitative.
Many companies exclusively focus on these easily obtained monetary and unit measurements. The data used for decision making arises from counts (e.g., number of calls made by a customer service rep in an hour) or self-assessment via rankings (e.g., surveys that ask participants to rank a variety of items on a scale of 1-5 ranging from “very dissatisfied” to “very satisfied”).
To create a more holistic and inclusive view of the forces that contribute to how well a company is really doing, Kaplan and Norton introduced the balanced scorecard. While financials are immensely important, so too are customer satisfaction, employee learning, and any other pertinent force that affects the company’s performance.
But we need to thoroughly understand our businesses – both internally and externally – to be able to identify the specific forces that contribute to our ultimate success or failure. In this way, we understand not only what to measure but also how to measure it. This is particularly difficult when these items are inherently NON-quantifiable or qualitative.
Including qualitative metrics in managerial reports help us to notice trends so that we can delve more deeply into what’s really behind those quantitative results. Such investigation inherently looks into qualitative measurements that reflect the “soft skills” of business.
Developing a Holistic Approach to Metrics
Ranking is commonly used to try to quantitatively measure something that is inherently qualitative. In other words, we are trying to objectively measure something that is inherently subjective.
Consider this example:
- Company X believes that employee satisfaction is low. Since they don’t know why employees are dissatisfied, they decide to use a standard, off the shelf employee satisfaction survey. Of the 22% of workers who responded to the survey, 80% stated that they were “satisfied” or “very satisfied.”
Should Company X be relieved by the overall high employee job satisfaction ranking – or should they be concerned because only 22% of workers participated in the survey? Is one metric more important than the other?
In other words, should they trust these results?
In my opinion, Company X can partially trust them – but they need to view the data as starting points for further conversations to find out:
- Why didn’t more employees participate in the survey? How does this participation rate compare with other employee surveys? If it’s lower, workers might feel that the company doesn’t really care about their responses and that nothing will be changed as a result of their feedback.
- Were the employees confident that their surveys would remain anonymous – or were they afraid that there would be repercussions for giving a lower score? This could indicate a major trust issue in the company that skewed the data.
- Did the employees simply respond in a way that they believed that management wanted them to respond? This could reveal a culture of groupthink, fear of reprisal, or even burnout.
- Finally, what specifically does “job satisfaction” mean to employees? It can be very different from management’s definition.
By delving into a more qualitative analysis of employee satisfaction, Company X can reveal actionable items that can address these issues.
What gets measured, gets done. What we focus on can prevent us from noticing other important factors affecting our performance. These are both very human characteristics. But by balancing quantitative and qualitative metrics, we have a much better chance to really see what is going on in our businesses – and make better decisions as a result.
Dr. Geri Puleo, SPHR, is the President and CEO of Change Management Solutions, Inc., an eLearning and Coaching company focused on eradicating workplace burnout through the B-DOC Model. An entrepreneur for over 25 years, keynote speaker, author, blogger, business coach, university professor, and researcher, you can see her “in action” by watching her TEDx Talk on YouTube. To contact Dr. Puleo, please go to www.gapuleo.com.