As we have all learned in today’s precarious economy, measuring a company’s value only in dollars is not enough. Instead, look at the company Steve Jobs left behind. By concentrating on creativity, innovation, aesthetics and customer loyalty, Apple is now worth more than Microsoft, though reaching today’s revenue levels took many years of putting value ahead of profits. Still, it remains very tempting for companies to focus solely on quarterly returns and financial gains and other numbers as the sole barometers of success. Obviously, these are all important metrics, but reliance on those barometers alone can steer companies towards short-term wins at the expense of a long-term increase in value. Focus instead on building the value of your enterprise by knowing your principles and following them consistently, particularly when setting employee incentives.
With end-of-the-year incentives right around the corner, is your company pinning employee evaluation on how much cash comes in during the next 90 days? Or are you taking a longer view and giving your employees incentive to put not only money, but real value, into your company, through better relationships with customers and colleagues? For instance, instead of just looking at the number of customers, success can be measured by looking at customer adoption or use of the product – if your sales team can get 40 percent of teachers in a district to use your product instead of adding more districts that only utilize at a 10 percent rate, then you have a better opportunity to solidify and expand your product offering to the district you have developed a deeper relationship with. In looking at your product, move beyond total sales to focus on quality by measuring (and rewarding) the number of service calls and product repairs. And as for the incentives themselves, think about other options (trips, charitable donations, company outings, etc.) to recognize that money is not the only motivator.
To build value in your own company, you must look at your internal culture to make sure you are motivating your employees to build value and not just profits. Through focusing on quality products and a rewarding work environment, you will build a reputation that will help you attract better people – cutting down on training costs (and increasing profits). Image in the community, how much people want to work for you and having your customers value your product are all crucial components of a company’s actual value. By looking at your incentives now, you can ensure a consistent increase in the value of your company that goes beyond the bottom line.