Here’s are 4 simple steps to choosing the metrics that will allow you to understand the cause-and-effect relationships between employee volunteering and your company’s performance.
The True Measures of Success
Last month’s issue of HBR featured a fascinating article on “The True Measures of Success” by Michael Mauboussin. The article outlines a simple four step process for “choosing metrics that allow you to understand, track, and manage the cause-and-effect relationships that determine your company’s performance.” While the focus of the article is obviously the bottom line of corporate profitability, I believe these steps are instructive for anyone hoping to understand the real value their employee volunteering or giving program can achieve.
The first step: Define your governing objective.
The perspective from which you begin the process of designing an employee volunteer program will govern every other aspect of the project. When considering a retail bank, for example, Mauboussin suggests that “creating economic value” would be a logical governing objective. That makes sense. But when considering the governing objective of your CSR or corporate citizenship program, the choice may not be as obvious.
We suggest you start by making a short list of the business benefits that your employee volunteering and workplace giving initiatives could generate. Do you believe your programs will cultivate engagement in the workplace? What about attracting new talent from the college campus? Maybe the programs will help with sales or customer loyalty?
Unlike the straightforward process Mouboussin outlines in the HBR article to evaluate corporate performance, a community investment programs must be three dimensional. The governing objective must generate benefits for the company, the community as well as the employees. This reality can create confusion when trying to select the governing objective. And while all three dimensions matter, it is important to start with the business benefits you want to achieve.
Why? Because an effective CSR or corporate citizenship program will have a governing objective that lines up with the overall business strategy. The corporate citizenship activity must be strategic to the success of the business. Anything less is charity.
So let’s suppose you chose Brand Trust as the governing objective of your employee volunteering and workplace giving program. This would be the business benefit. The next step would be to identify the benefits you want to create for your employees and the community. All three dimensions may be considered a governing objective but remember to begin with the business benefits first. For each dimension you’ll want to work through each of the remaining three steps. But for the sake of brevity we will follow through each step looking at the governing objective for the business dimension.
(To understand how employee volunteering connects to Brand Trust be sure to read this article on how CSR leads to consumer trust, commitment and loyalty).
The second step: Make the connections
The next thing we will want to do is develop a theory of cause and effect to assess presumed drivers of the objective. Let’s go back to the example of the retail bank. The first step would be to identify all the financial and non-financial drivers that would help the bank achieve their defining objective of economic value.
If our defining objective was to strengthen the brand trust of the bank we would first want to examine the measures by which our company evaluates brand trust. These measures would probably be a combination positive media impressions, customer recommendations, a willingness to try new offerings, positive social media activity, and other indicators.
It is important to start by using indicators that your company already employs. With regards to brand trust, the marketing department is a great place to start. But you may also want to use external indicators based on other case studies or academic research. Either way, you’ll need to develop a theory that demonstrates a link between your planned program activities and how those activities achieve your governing objective.
The third step: Act for impact
Now we need to identify the specific activities that employees can do to help achieve the governing objective. Mauboussin states that the goal here is “to make the link between your objective and the measures that employees can control through the application of skill.” He further states that this relationship must be ‘persistent and predictive.’ In our case, the ‘application of skill’ refers to activities of volunteering or giving.
Using our example of increasing brand trust as the defining objective we could begin with the list of indicators already being used by the marketing department. It would then be important to identify which of these measures could be influenced by employee participation in our employee volunteering or workplace giving program.
For example, when our employees show up to build a Habitat house, does this action drive positive media impressions? For example, is there any social media activity related to the event? Making a strong case for linking employee volunteering to the cause and effect chain can be a challenge.
To meet this challenge we advocate the use of a Logic Model or Theory of Change Model. The process of developing a Logic Model forces us to consider how our resources and activities create certain outputs. But more importantly, we have to be able to connect those outputs with desired outcomes and long term results (impacts).
This is usually where employee volunteering and workplace giving programs fall far short of their potential. Often companies report only outputs such as:
- The number of hours volunteered
- The number of employees participating
- The amount of money donated
- The number of charities helped
None of these measurements, on their own, are predictive of an increase in brand trust. Just doing good is not good enough. These outputs must connect to the outcomes that generate the benefits that we tried to predict in step two. Remember, these benefits should be three dimensional and be able to address the community and the employees as well as the company. In our example, we decided to begin with the governing objective for the business. In this case then, it makes sense to measure the positive media impressions following the employee volunteering event.
The fourth step: Evaluate your statistics.
Going forward it is important to consistently assess the link between the employee activities and the governing objective. Are the activities being measured actually influencing the governing objective of the program. This is a different emphasis than measuring the success of your program. Instead, we are asking the question ‘are we measuring the right things?’
This type of measurement requires the following actions:
1. Establish a measurement process. For some great information and ideas on this topic be sure to visit True Impact’s site for a helpful blog and great free tools. Be sure to try out their Logic Model tool online – its excellent.
2. Analyze the data (but get help). As our colleague Bea Boccolandro notes in the workbook she created for Boston College “A Step-by-Step Presentation of the Framework for Measuring the Business Impact of Community Involvement” measurement is “a technical discipline that is best left to those on the measurement team with technical expertise”. Building a team with these expertise is a must.
We can help!
The Realized Worth Global Team has extensive experience with benchmarking and measurement. Our strategic partnership with Corporate Citizenship enables us to offer the skill and experience you need.
Realized Worth works with companies to engage employees in their citizenship programs. Give us a call if you’d like to hear more about it – 855.926.4678. Or email us at contact@realizedworth.com.