A ‘corporate currency’ as a path to sustainable success
At a time when any business can go from being relevant to being sidelined based solely on its perceived contribution to society, companies are looking to define clearly their new “corporate currency”.
Today’s stakeholders want to be associated with organisations that have strong sense of purpose and contribute to societal wellness and the common good. Importantly, an organisation’s purpose must be reinforced by its culture which, in turn, is influenced heavily by the behaviour of its leaders.
It is the company’s culture that determines the level of inclusion employees feel and directly shapes the employee experience, both of which influence the wellbeing of the workforce.
These factors then shape how customers experience the company — which has an effect on how stakeholders of all types perceive and talk about the organisation.
This is what becomes the organisation’s brand.
The strength and alignment of these factors provide a powerful and accurate proxy for any organisation’s ability to achieve sustainable success.
“A company can only achieve greatness if its purpose, culture and brand are in sync,” says Joan Amble, a former finance chief at American Express and now a board member at Zurich Insurance, radio group SiriusXM and consulting firm Booz Allen Hamilton.
“If any one of those elements is not, the corporation’s currency can be devalued instantly. Regaining that value can take years, and in some instances companies never recover. Getting this right, and having the ability to monitor the pulse of the organisation on all fronts, is an imperative that requires vigilance, constant measurement and engaged ownership by all.”
Amble’s sentiment is perhaps best summed up by Satya Nadella, chief executive of Microsoft, who at the 2017 FinTech Ideas Festival said: “Being CEO has taught me this — that two things perhaps matter the most: having a very clear sense of purpose or mission that gives the organisation real direction, and having a culture that allows you to go after that mission.”
This is reinforced in recent research by the Institute for Corporate Productivity (i4cp), a human capital research company, in partnership with Extraordinary Women on Boards, a community of female directors representing hundreds of public and private company boards.
They asked 137 women board directors to identify the workforce-related data they do not currently see but would find highly valuable. Among the most cited were data about the company’s reputation as an employer, its level of employee advocacy and the health of its culture.
“Board directors are always trying to see around corners and manage risk,” says Lisa Shalett, co-founder of Extraordinary Women on Boards. “They want to understand whether the company is doing what it says it is, what the culture really is. These kinds of data points could indicate the presence or absence of trust among key stakeholders.”
Trust is one of the primary derivatives of a strong corporate currency. Given the dramatic health and wellbeing challenges brought on by the pandemic, as well as the emergence of new work models and faster digitisation, the data relating to a company’s purpose, culture and brand are important signals to watch.
Measuring this new corporate currency can be difficult, though. Agreement on what to measure, access to different types of data, and the level of analytical sophistication will vary by company. Critical, however, is understanding the sentiment of stakeholders, especially that of the workforce.
Increasingly, company boards are waking up to the importance of governing these elements rigorously, and investors are calling for evidence of this. All of which will surely continue, given the heightened emphasis now placed on a company’s commitment to environmental, social and governance (ESG) — which often includes metrics specific to company purpose and culture.
Managing a company’s corporate currency is not just the responsibility of those at the top, says Amble. “As companies and boards think about their corporate currency, it will be important to consider whether there is a clear understanding of the role of each employee in the organisation — those in the first, second and third lines of defence — from those who set policy and procedures, to those who direct the actions and processes, and those who ensure they are operating as intended.”
Critical stakeholders realise that the new corporate currency is both a risk-mitigation tool — to prevent the organisation from being the next alarming headline — and an execution tool for future success.
Corporate currency: the data needed to come to a valuation
The new ‘corporate currency’ has three elements: an organisation’s purpose (why it does what it does); its culture (what stakeholders experience while working with it); and its brand (its reputation as a place to work, a provider of products and services, an investment vehicle and a steward of the environment). Bigger organisations use multiple methods to monitor the alignment and strength of their corporate currency.
As a minimum, organisations should track, measure and analyse the following data:
Asking employees if they “agree/disagree” with these two statements will reveal whether the organisation’s purpose resonates with them:
“This organisation cares about its impact on society as well as making money”;
“I believe what this organisation does is important and meaningful”.
Retention rate of critical talent;
Internal sentiment among employees, culled from staff surveys, internal message boards and interviews;
Inclusion — a measure that could include the percentage of women in management roles and the percentage of successor candidates selected from under-represented groups, as well as the rate of diverse talent movement across and upwards in the organisation, compared with all employees.
Sentiment posted on employer review platforms, such as Glassdoor’s ratings, or on social media platforms, such as Facebook;
Employee net promoter score (ie, employee advocacy score or percentage of current and exiting employees who would recommend the organisation as a good place to work);
Customer net promoter score (ie, customer advocacy score or assessment of customers’ overall relationship with the organisation).
Kevin Martin is chief research officer at the Institute for Corporate Productivity