Personal Wellbeing, A leading indicator of organizational performance

by | Feb 3, 2021

By now, it’s probably old news that COVID-19 has changed what it means to go to work and that this seismic shift in understanding the modern workplace has led to the advent of a new era in workplace data analysis.

More than ever before, people are working remotely, from as many diverse settings as there are diverse personal stories. At the same time, leaders are using data to understand their team’s current reality better. Gone are the days of the water-cooler being the gathering place of our corporate tribe. Knowing the office’s pulse is no longer as easy as buying a box of donuts and waiting for your intrepid team to meander on by for a catch-me-up. Gone is all of that. Today, the average person will spend more than five hours looking into a camera, reflecting upon team members on screens scattered across the city and around the globe.

To understand key business metrics such as productivity and engagement, the technologies we use to understand our teams have rapidly evolved along with the technologies we use to connect to them. But perhaps the metrics themselves deserve the same shift. What if the things we measure to understand our team’s performance are no longer the things we should be measuring? What if understanding what it means to understand has irreparably changed too?

I think it’s fair to assume that leading up to the COVID-19 pandemic, the primary metrics CEOs paid attention to were based on performance – revenue, gross margin, net profit, downtime, uptime, order fulfillment cycle time, or progress towards targets.

None of these KPIs are necessarily related to people in a definable way.

People metrics are for human resources. Right?

In a knowledge-based economy, most of the value of a company is in its human resources – its people. And C-level leaders learned painfully and quickly that performance-based metrics were, in reality, lagging indicators of company performance. When your office shuts down overnight, and your 10-year plan to make your company more remote-work friendly got jammed into a 3-week period without asking you permission, it turned out that the health and wellbeing of your people was a much more accurate leading indicator of corporate performance.

And this is an excellent thing, for one big reason: Lagging indicators are like reading the newspaper. There’s nothing you can do about what you’re reading; it’s simply reporting the facts of what already happened. As an encounter with the Ghost of Christmas Past, your only option is to change future results.

What if, instead, we looked at the root causes of what used to be our favourite KPIs? For example, instead of looking at net profit, we looked at job predictability because the predictability of one’s job means a lack of uncertainty and ambiguity and comes from good communication up and down the line. What if an organizational job predictability score consistently above 70% meant a 97% likelihood of hitting quarterly net profit targets? Wouldn’t you want to know what your job predictability score was today? Wouldn’t you want to know what it will be a month from now?

By tracking the health and wellbeing of our people and seeing that as a leading indicator of organizational performance, we can take action to ensure organizational performance now, instead of waiting to find out what our organizational performance was three months ago with the hope of affecting enough change to see an improvement three months from now. We don’t have that kind of time. Measure what matters.