Are we measuring what really matters in organizations? ROI, market share, profit margin, cost savings, EPS, P/E ratio, EBITDA, and employee job satisfaction are common measures in business organizations today. While these are relatively easy to measure, the question we should be asking ourselves is, “Is this what we want to know?” Are we measuring these indicators because we can or because they truly measure what matters? A relevant quote attributed (probably erroneously) to Albert Einstein is, “Not everything that counts can be counted, and not everything that can be counted counts."
What if what really counts is “happiness”? Before you write me off as just another old hippie, hear me out. Chip Conley, CEO of the boutique hotel company “Joie de Vivre” and author of Peak: How Great Companies Get Their Mojo from Maslow and a TED presenter, argues that companies should measure the intangibles, more specifically, “transformation”. On a global level, he says that we should be measuring Gross National Happiness rather than GNP. He uses the country of Butan as an example of a government that shifted from a focus on GNP to a focus on GNH. They began asking citizens questions such as, “How do you feel about how you spend your time each day?’
Nic Marks, from the New Economics Foundation, in a TED presentation says that rather than measuring how much stuff we have, we should be measuring how much happiness we have. He presents economic data to make his case. He quotes Robert Kennedy: “…the GNP measures everything, in short, except that http://video.ted.com/assets/player/swf/EmbedPlayer.swf which makes life worthwhile.” Marks cautions us that resources used to achieve global, national, or corporate happiness have to be balanced against ecological costs of creating that happiness. According to the Happy Planet Index, Costa Rica has the best ratio of happiness vs. use of natural resources. In other words, we shouldn’t deplete the earth’s resources in order to achieve happiness. That would be counter-productive. He goes on to say that what matters most to each person’s happiness are five things:
- Being connected to other people
- Being physically active
- Taking notice of the world around you
- Learning throughout life
- Giving to others
I’m not saying that we should drop all of the other indicators of success and start measuring these indicators of “happiness”. However, I am saying that we should first decide what we want to achieve in our organizations (for-profit and nonprofit) and then develop measures of factors that indicate progress towards those goals. If we continue to measure what is easy or convenient or conventional, we will continue to be like the man who looked for his lost key under the streetlamp because that’s where there was light.